A brief examination of a number of firms' specimens of
signature reveals that the authority to represent a firm is limited
with the subject matter and extent and the authority to represent
such firm in all aspects unlimitedly is not vested in the
professionals. Use of those specimen signatures which we have seen
frequently in the past though contrary to applicable legislation
shall decrease in the near future.
Pursuant to Article 321 of the former Commercial Code No. 6762,
the representation authority may be bound with the business of the
headquarters or a branch only or it may be subject to some
limitations such as individual or joint representation so that any
other limitation would not be valid towards bona fide third
This provision of the former Code takes place in Article 371,
paragraph 3 of the Turkish Commercial Code No. 6102 saying that the
representation authority can be limited in two ways.
Accordingly, the representation authority may be;
Delegated in connection with the
business of the headquarters or a branch; and
Limited with representation by an
individual signatory or joint signatories. Any other limitation
would not be valid towards bona fide third parties. In other words,
a specimen signature with representation power limited in terms of
subject matter and extent, which have been the common practice up
to date, shall not possibly be issued or those issued ignoring this
fact shall be applicable in internal relations only but not towards
For example, any authority to expend but limited up to EUR
100,000 or to transact solely for purchasing auto spare parts shall
not be valid towards third parties which means that also the firm
that has delegated the said authority shall be liable towards the
third persons involved in the transaction in case the delegated
limits are exceeded. In such a case, the firm shall not have the
right to deny being bound by the agreement on the grounds that the
person who made the transaction has overridden his/her authority
and that the authority delegated through the specimen signature is
limited with EUR 100,000 but the contract price is EUR 200,000. The
firm may, however, recourse its staff who overrides his/her
authority so delegated as a part of internal relations.
Despite the explicit provision of the Code No. 6102, Regional
Registries of Commerce have continued to register specimen
signatures limited with the subject matter and extent after 1 July
2012, the date the said Code was promulgated. In July,
Eskişehir Chamber of Commerce requested the Ministry of
Customs and Trade's General Directorate of Domestic Trade to
clarify whether such registrations would be permitted or not in
legal terms whereupon the said Directorate has issued a circular.
According to the circular, signing authority cannot be split up or
any specimen signature allowing so should not be attested by trade
HOW TO DELEGATE SIGNING AUTHORITY WITHOUT LIMITING THE SUBJECT
MATTER AND EXTENT?
A firm can no more delegate the representation authority to
third party professionals through specimen signatures but powers of
All transactions the mandatary may perform shall be listed one
by one in the power of attorney including limitation of amounts, as
the case may be.
A Board of Directors willing to delegate some responsibilities
of its members to third party professionals shall have to regulate
internal operations of the company first through a decision and
then prepare and implement an internal directive designating the
reporting order as well as the powers and responsibilities of the
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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