Recent Development
The dividend distribution limitation period was extended for an additional three months pursuant to the Presidential Decision No. 2948 ("Presidential Decision") published in the Official Gazette No. 31248 on September 18, 2020.
Within the scope of governmental measures taken due to COVID-19, dividend distributions were limited and Provisional Article 13 was added to the Turkish Commercial Code ("TCC"). The Communiqué on the Procedures and Principles for the Application of Provisional Article 13 of the Turkish Commercial Code ("Communiqué") was published in the Official Gazette dated May 17, 2020 and No. 31130.
What Does the Presidential Decision Say?
The dividend distribution limitation was set to end on September 30, 2020, but was extended for an additional three months, until December 31, 2020. The Presidential Decision granted this extension based on the authorization provided by Provisional Article 13 of TCC.
Conclusion
Companies wishing to distribute dividends within the scope of the listed exceptions until the end of 2020 must take into consideration the provisions of the TCC and Communiqué regarding the principles on the limitation of dividend distributions and their exceptions.
For further information on the limitation of dividend distributions, refer to our previous Legal Alerts COVID-19: Limitations on Dividend Distributions and COVID-19: Procedures, Principles and Exceptions Defined for Limitation on Dividend Distribution
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