The Law No. 6522 dated September 10, 2014 amended various laws in Turkey including the Turkish Commercial Code No. 6102 ("TCC").
The main amendment introduced by Law No. 6522 to the TCC is with respect to provision of limited representation rights in joint stock companies and limited liability companies.
As a result of addition of a new paragraph to Article 371 of TCC on the scope and limitations of representation in the joint stock companies, limitations to the representation power of non-executive board members and executives working under an employment contract may only be introduced if the articles of association of the joint stock company provides for issuance of internal guidelines by the Board of Directors setting forth the principles for transfer of representation power. The same principles shall also apply for limited liability companies.
Accordingly, in order for the joint stock companies and limited liability companies to grant limited representation powers (e.g. representation powers subject to monetary limitations), the following shall be required:
(1) the articles of association of the company needs to be amended to allow for issuance by the board of directors of internal guidelines on transfer of representation authority;
(2) the board of directors in joint stock companies and the general assembly of shareholders in limited liability companies need to adopt a resolution (date and number of such resolution needs to be notarized) and approve the issuance of the internal guidelines on transfer of representation authority in the form as attached to such resolution and such resolution shall be registered with the trade registry and announced in the trade registry gazette;
(3) the internal guidelines shall only reflect the principles on transfer of representation authority such as scope of authority granted to different group of signatories but the names of signatories shall not be indicated therein;
(4) signatories shall be appointed by the board of directors in joint stock companies and the general assembly of shareholders in limited liability companies by reference to the date and number of the registered internal guidelines of the company on transfer of representation power.
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.