Since the Capital Markets Law No. 6362 ("CML") does not include certain provisions of the former Capital Markets Law No. 2499 ("fCML") regarding the issuance of shares of public joint stock companies with the registered capital system, the issue had been raised as to when the shares of these companies are deemed to be issued. Furthermore, even though secondary regulations entered into force after the CML came into force, certain provisions of the former foresee a structure that is parallel to the regulation of the fCML, which creates a contradiction regarding the issuance of shares of public joint stock companies with the registered capital system.
This article explains the contradictions between the fCML and the CML, as well as the provisions of the secondary regulations in this area of law.
Registered Capital System under Turkish Commercial Code
As opposed to the abolished Commercial Code No. 6762 ("fCC"), Articles 456 and 460 of the Turkish Commercial Code set forth that the registered capital system may be adopted by joint stock companies that are not subjected to the CML, as well as public joint stock companies. Pursuant to the related Article 456, the board of directors' resolution regarding capital increases shall be registered within three months of the date of the decision; otherwise, the resolution would be rendered invalid.
Further, in parallel with Articles 395 and 412 of the fCC, according to Article 486 of the TCC, the share certificates to be issued before the registration of the capital increase would be rendered invalid. Therefore, it is clear that under the TCC, the shares of joint stock companies with registered capital systems issue with registration, as well as the shares of the joint stock companies with a principle capital system.
Registered Capital System under Capital Markets Law
As mentioned, above, the provisions of the fCC do not include any regulation related with the registered capital system for non-public joint stock companies, and the principles of the registered capital system were established by the fCML. On the other hand, according to Article 7 of the fCML, in joint stock companies with the registered capital systems, the shareholding rights were gained by the delivery of share certificates at the completion of the sales transaction, and the abovementioned Articles 395 and 412 of the fCC were not applicable to public joint stock companies. Consequently, the fCML excluded the provisions of the fCC, which stipulated that the shares of joint stock companies would issue upon registration for public joint stock companies with the registered capital system, and it accepts that the shares shall be deemed to have issued with the sale and provide shareholder rights to the purchaser1.
Although there are certain provisions regarding the registered capital system under the TCC, Article 456 of the law states that the provisions of the CML are reserved for public joint stock companies. The principles regarding the registered capital systems of public joint stock companies are regulated under Article 18 of the CML. However, there is no provision equivalent, or similar, to Article 7 of the fCML regulating those new shares would issue, and shareholder rights would be obtained with the sale of the shares prior to the registration. Further, different from the provisions of the fCML, the CML does not include any provision excluding the relevant articles of the TCC on invalidity of the share certificates that are issued prior to the registration of shares.
Since the fCML did not require the companies to amend their articles of association in accordance with the increased capital and register the amended version of the articles of association, it is accepted by the legal scholars that the capital increase occurs partially as the shares are sold in accordance with the ratio of the sold shares2.
In addition, considering that Article 18 of the CML aims to comply with the TCC provisions3, requires revising the articles of association in accordance with the increased capital, it does not exclude the relevant TCC provisions stating that the shares are issued upon registration and does not include a provision similar to Article 7 of the fCML, it has been argued that the shares to be issued by public joint stock companies are also issued upon registration4. With respect to this view, different from Article 7 of the fCML, and provisions of Article 456 of the Turkish Commercial Code, stating that the provisions applicable to public joint stock companies are reserved, and Article 18 of the CML, which regulates that the TCC provisions regarding the principle capital system are not applicable to the companies with registered capital systems, are related to the method of the issuance of new shares, and do not provide an exception to the provisions of the TCC regarding the moment of issuance of the shares5.
On the other hand, in parallel with the related article of the fCML, Article 3 of the CML defines issued capital as the capital of joint stock companies with a registered capital system that represents the sold shares, and referred to the sale stage of the shares, rather than to their registration, with respect to the moment of issuance.
In parallel with Article 12 of the CML, Article 31 of Communiqué on Shares No. VII-128.16 ("Communiqué on Shares") declares that without prejudice to the dematerialized system principles, the share certificates of public joint stock companies with registered capital systems shall be delivered to the buyer when the sale transaction is completed. As explained above, different from Article 7 of the fCML, the CML does not include any provision excluding the TCC provisions regarding invalidity of the share certificates issued prior to the registration of shares. However, the relevant Article of the Communique on Shares that was issued after the CML, accepts that share certificates may be validly issued prior to the registration, and it is mandatory to deliver these certificates to the purchaser at the time of sale.
With respect to the dematerialized shares, Communiqué on the Procedures and Principles for Dematerialized Capital Market Instruments No. II-13.17 ("Dematerialized Capital Market Instruments Communiqué") does not require registration of shares as a pre-requisite to record the newly issued shares to shareholders' or investors' accounts of the investors and to the shareholders in the Central Record System. On the other hand, according to Article 16 of the Dematerialized Capital Market Instruments Communiqué, the record of the newly issued shares made to the accounts of shareholders or investors prior to the registration of the shares are temporary for joint stock companies with principle capital systems, and these records will become definite with the registration of the shares. It is not clear whether this Article can be interpreted in a way to include the records for joint stock companies in the registered capital system, as well, or whether records made for these companies are certain before the registration of shares. It has been argued that the registered capital system excluded from the scope of this Article was in error, and due to the influence of Article 7 of the fCML8.
The fact that the CML does not include a specific provision regarding the time of issuance of shares, and the TCC foresees certain provisions regarding the registered capital system different from the fCC, renders a complexity in understanding which scope the TCC provisions are to apply as general rules in this area of law, to the cases not explicitly regulated within the CML, including the issuance of shares.
In this context, the CML and the secondary regulations can be interpreted in different ways on the question as to whether the shares of joint stock companies that are subject to the CML, and with a registered capital system, issue by registration, or at the completion of the sales transaction.
 Manavgat, Çağlar: Kayıtlı Sermaye Sistemindeki Halka Açık Anonim Ortaklıklarda Payın Doğumu ve Satış Sürecine Etkileri, Banka ve Ticaret Hukuku Dergisi, September 2015 - Cilt XXXI – No. 3, p. 7.
 Manavgat, p. 10.
 Moroğlu, Erdoğan: Anonim Ortaklıklarda Sermaye Artırımı, 3rd ed., İstanbul 2015, p. 365; Kırca, İsmail/ Şehirali Çelik, Feyzan Hayal/ Manavgat, Çağlar: Anonim Şirketler Hukuku, V. 1, Ankara 2013, p. 321; Manavgat, p. 11 ff.
 Manavgat, p. 11.
 OG, 22.06.2013, No. 28685.
 OG, 07.08.2014, No. 29081.
 Manavgat, p. 15.
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