Turkey: Amendments Introduced By The Draft Turkish Commercial Code As Regards The Invalidity Of General Assembly Resolutions

Last Updated: 17 August 2009
Article by Riza Gumbusoglu


The Turkish Commercial Code dated June 29, 1956 and numbered 6762 (the "TCC") has been in force since January 01, 1957. Although the TCC was substantially responding to the needs of Turkey at the time it was enacted, it merely responds to the current needs of the modern world. In the second half of the twentieth century, when the TCC was applicable, incidents which can be considered important, and even extra-ordinary for a commercial code have occurred and an era having permanent consequences started. At that time, reforms in relation to commercial law in general or a specific section of the commercial law have been made throughout Europe and the world; amendments to commercial codes were made more frequently than in the past and nearly every country introduced changes to their commercial codes to some extent during this period. Moreover, new doctrines were introduced with respect to specific commercial law issues and several reports and drafts were prepared in order to amend, modify, and modernise various commercial codes partially or entirely. These modifications affected both the theory and the practice of commercial law.1

The developments which took place in Europe and the rest of the world made it inevitable that the TCC would need similar changes. The Draft Turkish Commercial Code (the "Draft Code") which has been prepared for this purpose includes not only amendments to the existing provisions, but also innovative new provisions. However, this article concerns only the changes brought by the Draft Code regarding the invalidity of general assembly resolutions. In this article, first the current legislation on the invalidity of the general assembly resolutions will be explained and then the relevant amendments introduced by the Draft Code will be analyzed.


The TCC (Articles 381-384, 361/III) only describes the circumstances under which a resolution adopted by a general assembly may be cancelled. There are no specific provisions with regard to "non-existence" and "nullity" cases which are therefore subject to general provisions.

According to Article 381 of the TCC, a court action for cancellation can be brought within three months against a general assembly resolution which is illegal or violates the articles of association or the principles of good faith. As specified in this provision, "illegality" means any condition which is against the law other than the cases of non-existence and nullity.

Pursuant to Article 381 of the TCC, the following persons can file a court action for cancellation: (i) shareholders, (ii) board of directors, and (iii) each member of the board of directors or each auditor, provided that the implementation of the resolution which is subject to cancellation action leads to the personal liability of such director or auditor. However, as concerns the rights of shareholders to file a cancellation action against a general assembly decision where unauthorised persons attend the general assembly meeting and participate in the voting, Article 361 differs from the provisions of Article 381.

Pursuant to Article 381/I (1) of the TCC, shareholders who are not present at the general assembly meeting may bring a court action for the cancellation of a resolution, on the grounds that persons who are not entitled to attend the general assembly meeting participated in the voting of such resolution. However, if a shareholder attends a general assembly meeting, the right to sue for cancellation of the resolution is possible only if his/her opposition to the resolution in question was included in the minutes of the general assembly. On the other hand, Article 361/III states that if persons who are not entitled to attend a general assembly meeting have taken part in the voting, each of the shareholders has the right to request the cancellation of the resolution from the court even if she/he has not opposed the resolution beforehand. In this respect, it is clear that Article 361/III (as opposed to Article 381/I (1)) enables a shareholder who attended the general assembly, but whose opposition to a resolution was not included in the minutes, to bring a court action for the cancellation of such resolution.

The participation by unauthorised persons in a resolution adopted at a general assembly meeting is against the law. On this basis, a lawsuit for cancellation may be filed. However, this issue is regulated differently with contradictory provisions under Articles 381/I (1) and 361/III of the TCC. Article 381 aims to specify which persons are entitled to file a lawsuit for cancellation. Article 361/III specifies a certain reason for cancellation as follows: "...the persons claiming that the persons who are not entitled to attend a general assembly have taken part in the voting...". Shareholders alleging that unauthorised people attended a general assembly meeting are permitted to bring a lawsuit for cancellation within three months as of the date of the meeting. Pursuant to Article 381, this is a reason for absolute cancellation; in other words, the defendant joint stock company cannot have the claim dismissed by proving that such participation by unauthorised people does not have any effect on the adoption of the resolution. Article 361/III does not foresee a time limit, but does entitle a joint stock company to prove that the participation in question has not affected the adoption of the resolution. This contradiction can be eliminated either by amending the Articles so that they no longer contradict, or by abolishing Article 361/III.2

Scholars have criticised this contradiction arising from the provisions of Articles 381/I (1) and 361/III. Therefore, as it will be analyzed below, the Draft Code (Article 446) addresses the issues of who can sue, and the conditions under which they may sue, in a single article. In this way, the Draft Code eliminates the contradiction between Articles 381/I (1) and 361/III under the current legislation.

Invalidity Cases in general: Non-Existence, Nullity and Cancellability

1. Non-Existence

Pursuant to the TCC, a resolution may be defined as a "general assembly resolution" when it includes two elements. The first element is that there shall be a "general meeting" at which shareholders or their proxy holders gather as a general assembly. The second element is that there shall be a resolution adopted by the shareholders or their proxy holders comprising the general assembly. If these elements do not exist, a resolution cannot be considered a "general assembly resolution" since a breach of mandatory rules on form and procedure results in non-existence of a general assembly resolution. For example, in cases where resolutions have been adopted without complying with the required meeting or decision quorum; or where no invitation has been issued by the authorized persons; or where the commissary of the Ministry of Industry and Trade has not been present and has not undersigned the minutes of the general assembly, etc. the non-existence of a general assembly resolution may be alleged.

In order to determine a general criterion for non-existence, it can be said that a breach of the mandatory rules on form and procedure results in a case of non-existence. However, if the mandatory rule aims only to protect the shareholders' interests, its violation cannot be regarded as non-existence or nullity, but instead constitutes a case of cancellability.3

The non-existence of a general assembly resolution can be claimed by everyone who has a legal interest in such allegation, without being bound by a specified time period, by way of an objection or a lawsuit. Since a non-existent general assembly resolution is deemed ineffective ab initio given the fact that the formal requirements to convene a general assembly meeting have not been fulfilled, the lawsuit related to such a matter is in the nature of a declaratory lawsuit.4

2. Nullity

The general provisions on the case of nullity are set forth under Articles 19 and 20 of the Code of Obligations numbered 818 and dated April 22, 1926 (the "TCO"). If a general assembly resolution is valid in terms of its form and procedure, however, its subject matter is against Articles 19 and 20 of the TCO, in other words if its subject matter is contrary to mandatory or moral rules, or is not viable, then such resolution shall be considered null. If these rules are breached, the cancellation of the resolution cannot be subject to a court action since in such a case, the resolution shall be considered null. The aim is to protect the public order and interest. Moreover, a resolution shall be considered null when its subject matter conflicts with a conclusive judgment.5

Similar to the case of non-existence, resolutions can be declared null by a court action, without being subject to the lapse of three months' time set forth under Article 381 of the TCC.

3. Cancellability

As explained above, the TCC regulates only cases of cancellability, whereas general provisions apply to cases of non-existence and nullity. The circumstances under which general assembly resolutions can be cancelled are set forth under Article 381 of the TCC as follows; conflict with (i) law, (ii) articles of association, and (iii) principles of good faith. The term "conflict with law" in the context of Article 381 means any breach of legal provisions which does not result in non-existence or nullity.

Unlike cases of non-existence and nullity, bringing an action for cancellation of a resolution is subject to a strict time limit. Pursuant to Article 381 of the TCC, a court action can be brought against the general assembly resolutions conflicting with law or the articles of association or, in particular, principles of good faith within the three-month time limit starting from the date of such general assembly resolution.

It is important to note that, in order to ensure legal security in cases where doubt exists, instead of considering a resolution as non-existent or null, inclination towards the cancellability of such resolution must be opted6.


Article 445 of the Draft Code sets out the cancellation reasons, Article 446 describes the persons entitled to bring a court action for cancellation and Article 447 specifies nullity conditions.

The current system of cancellation reasons under the TCC has also been adopted by the Draft Code. In this sense, Article 445 of the Draft Code states that a court action can be brought against a general assembly resolution conflicting with law or articles of association or, particularly, principles of good faith within three months' period starting from the date of such general assembly resolution.

The persons entitled to bring a court action for cancellation are stated under a single article as follows:

a) Shareholders who have been present at the general assembly meeting and voted against the resolution and had their opposition recorded in the minutes,

b) Shareholders, regardless of whether they were at the general assembly meeting or voted against the resolution; who claim that the invitation procedure has not been complied with, the agenda has not been announced properly, or that persons unauthorised to attend the general assembly meeting (or their proxies) have taken part in the general assembly meeting and the voting, or that they have unfairly been prevented from participating to the general assembly meeting and the voting, and that the above mentioned violations have affected the adoption of the resolution.

c) Board of directors,

d) Each director, if the fulfilment of the resolution gives rise to his/her personal liability.

The established Turkish legal practice has been codified and nullity conditions, in particular, have been clearly specified under Article 447 of the Draft Code which reads as follows;

"The general assembly resolutions which, in particular;

a) restrict or eliminate shareholders' rights of participation to a general assembly meeting, their rights to vote, their rights to sue, and their indefeasible rights deriving from law,

b) restrict shareholders' rights to obtain information, to inspect and control except within the limits allowed by law,

c) distort the main structure of a joint stock company or conflict with the provisions on the preservation of capital are regarded as null.

According to the reasoning of Article 447 on "nullity", in order to harmonize the Draft Code with the TCO, the Draft Code adopts the terms "nullity" and "null." The terms of "voidness" and "invalidity" are also correct, but are broader terms.

Null resolutions adopted at a general assembly meeting are deemed ineffective ab initio and they cannot be rendered effective post facto. In addition, they are taken into account ex officio by a court. They can be asserted in the form of a defense, and may also constitute the subject matter of a declaratory court action without being subject to any time limit. On the other hand, null resolutions have an important drawback relating to transaction security. Indeed, they bear the risk of being subject to a declaratory court action even years after the resolution is taken. This, in turn, leads to major concerns for shareholders, creditors and potential investors. The declaration of nullity of a general assembly resolution by a court, after a long period of time, would cause the retroactive annulment of several transactions which were established on the basis of the subject resolution. Therefore, courts should give their judgment on nullity cautiously, after assessing the case in depth and besides, it is also important that the legislator clearly draws the line between nullity and cancellability. In this context, the referenced provision, i.e. Article 706 (b) of the Swiss Code of Obligations, has been strongly criticised. It is asserted that the aforementioned provision does not draw the line clearly and does not lift the threat in question. Nevertheless, a helpful proposal has not been made concerning this matter.

It would not be correct for the Draft Code to enumerate the resolutions which are considered null in an exhaustive manner. If it did, several resolutions which may be regarded as null might fall outside the scope of the provision. That is because it is not possible that all potential nullity cases and conditions could be laid down and defined under the abovementioned provision. Thus, it is most appropriate for null resolutions to be divided into two categories; (i) resolutions which are considered null due to their form and (ii) resolutions considered null due to their subject matter. The cases and conditions of the null resolutions included in the first category should be determined by jurisprudence and doctrine. In contrast, the null resolutions covered by the latter category are specified clearly in a non-exhaustive manner by giving examples of such cases. The system established for the determination of null resolutions of the first category (form-related nullity) has been adopted with the presumption that courts will be cautious about possible drawbacks and threats and exercise due diligence in determining the null resolutions. Hence, under Article 447, null resolutions are set forth in categories. The term "in particular" in the Article indicates that null resolutions do not consist of only the resolutions which are listed under the Article; in other words, the Article is not meant to comprise an exhaustive list. In this respect, the term "in particular" provides a relative limit and the chosen resolution categories indicate that this issue is handled cautiously and in a refraining approach by the legislator. Refraining is a principle contained in the provision. The concept of "in particular" also has a restrictive function. The group of resolutions considered null due to their subject matter covers the resolutions which eliminate or restrict shareholders' rights with particular benefits, and which distort the main structure of a joint stock company, and which are contrary to the principle of preservation of capital. In determining the null resolutions other than those stated, the principle of "nullity being secondary" applies. In other words, a resolution is declared null on the basis of general legal provisions and principles, provided that the cancellation of the resolution does not constitute a sufficient sanction due to specific reasons. The principle of refraining should be considered, especially in the ascertainment of the null resolutions due to formal reasons. (deficiency and fault).


While the Draft Code has not introduced any changes with respect to the reasons of the cancellability of resolutions, it has combined two separate issues into a single article: "the persons entitled to bring a court action for cancellation" and the "cancellability reasons". In this way, the contradiction between Articles 381 and 361 of the TCC has been prevented, and a clear and coherent provision has been drafted. In addition, the nullity conditions which are not explicitly regulated under the current Code, but have been applied in the legal practice for many years, are codified and the distinction between null resolutions and cancellable resolutions has been drawn.


1. The general reasoning of the Draft Commercial Code

2. Poroy/Tekinalp/Çamoğlu; Ortaklıklar ve Kooperatif Hukuku, 10. Tıpkı Basım, p. 423 et seq.

3. Poroy/Tekinalp/Çamoğlu; ibid, p. 416

4. Moroğlu; Anonim Ortaklıkta Genel Kurul Kararlarının Hükümsüzlüğü, Dördüncü Bası, p. 124

5. Poroy/Tekinalp/Çamoğlu; ibid, p. 416; Moroğlu, age. p. 20, 21, 127 et seq.

6. Poroy/Tekinalp/Çamoğlu; ibid, p. 417

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.