Increasing Capital In Limited Liability Companies By
Contribution Of Shareholders' Mature Cash Receivables To The
According to Article 127 and 342/1 of the Turkish Commercial
Code ("TCC"), shareholders' mature
receivables from a company can be invested in that company as
In order to increase capital in limited liability companies in
such way, an application must be made to the relevant Trade
Registry with the following documents:
A simple one page petition in the form of a
cover letter, signed by the authorized signatory(ies) of the
company of which the capital will be increased.
2 notarized copies of the General Assembly
resolution (i.e. meeting minute).
The General Assembly of the company must convene and adopt a
resolution regarding the capital increase, clearly stating that the
increased capital amount is covered from the mature cash
receivables of the relevant shareholder(s) and that the existence
of such receivable is confirmed by the relevant certified public
accountant (or an independent accountant and financial advisor as
In the said General Assembly resolution, the new capital structure
(with the increased capital) must also be shown (indicating the new
capital amount, the number of shares, share value as well as the
new shareholding structure).
Shareholders can be represented by proxies in the General Assembly
Unless a higher (cannot be lower) quorum is required in the
articles of association, a capital increase decision in the General
Assembly meeting can only be adopted with at least 2/3 of the votes
that are represented in that meeting, which are cast by
shareholders who are entitled to vote and who own shares that
represent more than 1/2 of the entire capital of the company.
Report of the certified public accountant (or
independent accountant and financial advisor)
Based on the latest opinion of the Ministry of Customs and Trade
General Directorate of Domestic Trade, it is no longer required to
apply to a court to have an expert appointed to officially confirm
the existence of the receivable which will be contributed to the
capital. A report obtained from a certified public accountant (or
an independent accountant and financial advisor) in this regard
will be sufficient.
Good Standing Certificate (Activity Certificate) of the
Bank receipt showing that 4/10.000 of the
increased capital amount is deposited into the bank account of the
Turkish Competition Board.
Unlike in joint stock companies; obtaining another resolution
regarding the exercise of preemption rights of the other
shareholders is not required in limited liability companies.
As a final note; unlike in joint stock companies, it is not
required for a representative of the Ministry of Customs and Trade
to sit in the General Assembly meetings held for increasing the
capital in limited liability companies.
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.
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