As we are at the beginning of a new year, joint stock corporations (each a "JSC") and limited liability partnerships (each an "LLP") must satisfy the statutory obligation of holding an ordinary general assembly ("GA") meeting in accordance with the Turkish Commercial Code1 (the "TCC") and the Regulation on the Procedures and Principles of General Assembly Meetings of Joint Stock Corporations and the Representatives of the Ministry of Customs and Trade2 (the "Regulation").
Under the TCC, the board of directors3 (the "BoD") is authorized to convene the GA by adopting a BoD resolution. The call for a GA meeting is of particular importance, as agenda items are specified in the resolution and these agenda items can be debated during the relevant GA meeting.
There are two types of GA meetings: Ordinary GA meetings and extraordinary GA meetings. Ordinary GA meetings must be held within three months following the end of each activity period. According to the TCC, extraordinary GA meetings can be convened whenever needed. At least one BoD member must attend the GA meeting. In addition, under certain circumstances, a ministry representative appointed by the Ministry of the Customs and Trade (the "Ministry") must also attend GA meetings (e.g., in GA meetings related to increasing the company's share capital).
The TCC also provides an opportunity to hold the GA meeting electronically. In order to hold an electronic GA meeting, the company must (i) have a specific provision under its articles of association (the "AoA") and (ii) register with the Central Registry Agency's Electronic General Meeting System (EGKS). According to the Regulation, companies holding GA meetings in an electronic environment must invite ministry representatives to all such meetings. In addition, these companies must establish the technical equipment required to have the GA meetings in an electronic environment4.
GA meetings can also be held abroad, provided it is expressly stipulated in the company's AoA.
The purpose of this bulletin is to provide a general overview on the process to follow for preparing for the ordinary GA meeting5.
Documents to be prepared by the BoD for Ordinary GA Meetings
i. Agenda of the GA Meeting
The BoD must prepare the agenda of the GA meeting. This agenda must contain (i) release of BoD members and election of new BoD members whose terms of office have expired; (ii) discussion and approval of financial statements and annual activity reports; (iii) determination of profit distribution rates; and (iv) discussion and adoption of resolutions on matters that are deemed necessary by the BoD. It is important to carefully determine the scope of the agenda After all, once the agenda is finalized, certain requirements must be fulfilled to include additional items to the agenda.
ii. List of Attendees
The list of attendees must be prepared by the BoD, prior to the GA meeting. The list must contain information on the shareholders' identities and addresses, total number and nominal values of shares represented by these shareholders. The list of attendees must be signed at the GA meeting by attendees, meeting chairman and -if applicable- a ministry representative.
iii. Documents for Review
In addition to the agenda and list of attendees, certain documents must be duly prepared and made physically or electronically available for review of the shareholders. These documents are as follows: (i) the AoA; (ii) share ledger; (iii) annual activity report prepared by the BoD; (iv) documents showing that the invitation to the GA meeting has been duly made; (v) independent auditor report, if applicable; (vi) financial statements; and (viii) if any, draft amendments to the AoA (and Ministry's permit letter, if applicable).
Invitation to the GA Meeting
According to the TCC and the Regulation, the BoD must adopt a resolution regarding invitation of shareholders to the GA meeting. In the event of absence of the BoD or if the BoD is permanently not able to convene or meet the required quorum for such resolution, any shareholder of the company may invite shareholders to the GA meeting upon an order duly obtained from the competent court6.
Invitation to the GA meeting must be announced on the company's web site, if applicable and in the Trade Registry Gazette, in compliance with the company's AoA at least two weeks prior to the GA meeting, excluding dates of announcement and the GA meeting. Additionally, registered shareholders or shareholders who have proved their shareholding and informed the company of their addresses must be notified through registered letters and Trade Registry Gazettes where the announcement is made or to be made.
If the invitation does not comply with the procedures set forth under the TCC and the Regulation and the company's AoA, the GA meeting and resolutions adopted may be deemed void.
GA Meeting without Invitation
The TCC and the Regulation also allow the GA meeting to be held without invitation. If all shareholders or representatives will be present, and if none of them object, the GA can be convened without invitation. In addition, if a shareholder demands to add a further item to the agenda during the GA Meeting which is held without invitation, this item can be discussed provided that (i) all shareholders are present at the GA meeting and (ii) shareholders unanimously adopt a resolution on this matter.
1 Published in the Official Gazette dated 14 February 2011 numbered 27846.
2 Published in the Official Gazette dated 28 November 2012 numbered 28481.
3 Managers for LLPs.
4 In an LLP, shareholders who are entitled to attend the GA meeting in an electronic environment must submit their demand bearing secured electronic signature to the registered e-mail account of the LLP, at least one day prior to the GA meeting. The LLP must adopt necessary measures and give necessary information to its shareholders, in order to make the GA meeting accessible for the shareholders.
5 Ordinary GA meetings of publicly held corporations are subject to further requirements and these requirements are not addressed in this e-bulletin.
6 If the company is subject to liquidation, liquidation officers are also authorized to convene the GA meeting.
© Kolcuoğlu Demirkan Koçaklı Attorneys at Law 2015
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.