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GENERALLY
Joint stock company is a type of company whose capital is certain and divided into shares and is only responsible for its assets due to its debts. Also, shareholder can be defined as the person who has shares of the capital of the joint stock company. As a result of being a shareholder in joint stock companies, a legal relationship has been established between the shareholder and the joint stock company at the time with the possession of the shares. As a result of this relationship between the shareholders and the company shareholders have certain rights and the greater the amount of shareholding of an individual member, the greater rights and powers accrued to that individual within the company. This phenomenon is defined as the principle of majority. Decisions are taken by the will of the majority shares of the company in the general assembly, which is the decision-making body of the company, and in the executive board, which is the executive body of the company. These decisions, which are taken by majority's will, also bind the shareholders who are not present or present at the meeting but who gave negative votes. For this reason, decisions taken in joint stock companies are shaped according to the will of the majority shareholders and this situation may create conflict of interests among the shareholders. In this context, Turkish Commercial Code dated 13.01.2011 and numbered 6102 ("TCC") granted certain rights to minority share groups that could not have an impact on the management of the company due to the majority rule in company management. These rights are defined as minority rights.
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DEFINITION OF MINORITY ACCORDING TO TCC
According to TCC, in non-public joint stock companies, some additional rights have been granted to the shareholders who have a certain proportion of capital, as well as the rights granted for being a shareholder. In order to be included in this group, which is referred to as "minority" and to have the rights granted to this group, it is necessary to have shares representing at least 10% of the capital in non-public joint stock companies and there is no difference was envisaged between 10% and 49% of the company's capital in terms of exercising the rights specifically granted for the minority according to TCC.
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MINORITY RIGHTS DESCRIBED BY TCC
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Right to be Represented in the Board of Directors of the Company
Minorities' right to be represented on the company's board of directors is regulated in article 360 of TCC. Accordingly, if it is stipulated in the articles of association of the company, certain share groups, shareholders and minority who constitute a certain group with their characteristics and qualifications may be entitled to be represented on the board of directors. For this purpose, members of the board of directors can be elected among the shareholders, certain share groups and minorities, which constitute a certain group, as well as the right to propose candidates for membership in the articles of association. If the candidate proposed by the General Assembly to be a member of the board of directors, or a candidate belonging to the group and minority of which the right has been granted, the proposed member shall be selected.
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Right to Invite the General Assembly for Extraordinary Meeting and Right to Add Topic to the Agenda of The General Assembly
Minority shareholders may ask for the invitation of extraordinary general assembly or if the general assembly is to be convened, they may ask for adding topics that they want to resolved on the agenda by a written statement with agenda and reasons for delay to the board of directors.
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Right to Request Postponement of Discussion of Financial Statements
In accordance with this right granted to minority shareholders in a company, the minority shareholders' group may request the postponement of discussion of the financial statements of the company and the related matters for a month from general assembly. By this request, the meeting is postponed for one month without any further decision of general assembly. For exercising hereby right, it is adequate to deliver the request to the meeting chairman and no need to give any reason.
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Right to Request Special Audit to Company
In accordance with the TCC, with the right to request special audit, in case the request of special audit is denied by general assembly minority shareholders may request the appointment of special auditor from commercial court of first instance located in the same place with company's headquarters within three months.
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Right to Request Issuance of Registered Share Certificates
Pursuant to TCC, board of directors of joint stock companies do not have an obligation to issue registered shares certificates without further request. However, if the minority within the company demands, the registered share certificates must be issued and distributed to shareholders of the company.
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Right to Dismissal and Appointment of New Auditor to Company
In joint stock companies, auditors are elected by the general assembly. If the minority shareholders request, the commercial court of first instance located at the company headquarters can appoint a new auditor if a just cause is shown by the demanding minority shareholders of the company.
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Right to Request Withdrawal of the Company with Just Cause
In case of allegation of just cause by the minority shareholders of the company to the commercial court of first instance where the company headquarters is located withdrawal of the company may be decided by over a request from minority shareholders in accordance with the TCC. Even though the concept of just cause is not specifically defined in the TCC, violations of minority rights and individual rights are shall be accepted as just cause for withdrawal of the company.
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CONCLUSION
A balance mechanism against the fundamental principle of majority that regulated in terms of managing the joint stock companies has been envisaged by providing certain rights to the minorities in TCC. Along with the rights granted to the minorities in TCC, it is ensured that the shareholders who have a share that does not give power to affect the management and decision-making points of joint-stock companies can be able to influence the management and the decision-making mechanisms of the company by reaching the 10% share rate that set forth by the Turkish Commercial Code.
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.
