In recent years, situations have often occurred in which the activities of stock companies have caused losses, companies have become submerged in debt due to the mobility of the exchange rate, and as a result, companies cannot meet their debts and obligations. In particular, the foreign currency denominated debts on the company's statements are increasing due to the exchange rate increase. So these debts are reaching large amounts in Turkish Lira. In the article of the law regulating technical bankruptcy, if two-thirds of the company's capital is lost, the board of directors is obliged to apply to the court and request the technical bankruptcy of the company.

Regarding companies being under debt, article 376 of the Turkish Commercial Code No. 6102, “Notification to the court in case of going into debt” is included among the inalienable and indispensable duties of the board of directors in the Article.

Likewise, in article 324, one of the duties of the board of directors in joint stock companies and the directors in limited liability companies are regulated as the protection and supervision of the company's capital. In the law, this duty is assigned to the board of directors in joint stock companies and to managers in limited liability companies. Although in practice, the provisions of the article on joint stock company partnerships are also applied to limited liability companies. Therefore, the protection and supervision of the company's capital in stock companies are among the inalienable and indispensable duties of the board of directors.

Matters of capital and technical bankruptcy are regulated by Article 376 of the Turkish Commercial Code. The following statements are given in the article;


“(1) If it is clear in the last annual balance sheet that half of the sum of the capital and statutory reserves is unsecured due to loss, the BoD shall immediately convoke the GA and submit the remedial measures it considers appropriate.

(2) According to the last annual balance sheet, if it is clear that two-thirds of the sum of the capital and statutory reserves are unsecured due to loss, unless the GA immediately convoked decides to fully supplement the capital or to be satisfied with one-third of the capital, the company shall automatically terminate.

3) (Amended: 26/6/2012- art.6335/16) If suspicions are raised that the company's liabilities exceed its assets, the BoD shall have an interim balance sheet prepared based on the going concern value and based on liquidation value of the assets and shall give it to the auditor. The auditor shall inspect this interim balance sheet within seven business days and shall present his/her evaluation and proposals to the BoD in the form of a report. The proposals of the early detection committee regulated in Article 378 must also be taken into account in the proposals of the auditor. This shall be done provided that before the adjudication of bankruptcy, the company's creditors representing an amount sufficient to cover the company's deficit and to eliminate the indebtedness of the Company accept in writing that they will be ranked after all other creditors and that the legitimacy, authenticity and validity of this declaration or contract is verified by experts assigned by the court which shall be notified of the request for bankruptcy by the BoD. Otherwise the application made to the court for an expert inspection shall be considered as notification of bankruptcy.”

When the article is examined; It is seen that if two-thirds of the total capital and legal reserve funds remain unrequited, the general assembly should be called to a meeting immediately, and if it is not decided to settle with one-third of the capital or to complete the capital at the said meeting, it is arranged that the company will terminate naturally. However, although there is a regulation in the wording of the law that technical bankruptcy will occur naturally, companies do not go bankrupt without applying to a court. Here, even if the wording of the law states that bankruptcy will take place without applying to the court, bankruptcy does not take place without applying to the commercial court. Therefore, it is observed that the technical bankruptcy regulation is not procedurally separated from the general bankruptcy regulation. The liquidation proceedings of the company are carried out in accordance with Article 536 and the continuation of the Turkish Commercial Code.

The “Communiqué on the Procedures and Principles Regarding the Implementation of Article 376 of the Turkish Commercial Code No. 6102”, which regulates the principles regarding the implementation of Article 376 of the Law, entered into force on 15.09.2018 and was published in the Official Gazette on 26.12. With the “Communiqué on Amending the Communiqué on the Procedures and Principles Regarding the Implementation of the Article”, various changes have been made in the practices regarding insolvency and loss of capital. Detailed explanations of capital loss and going into debt have been provided in these said communiqués.

In Provisional Article 1 added to the Communiqué, it is stated that “Until 01/01/2023, the exchange rate difference losses arising from foreign currency obligations that have not yet been fulfilled may not be taken into account in the calculations regarding the loss of capital or the state of being in debt within the scope of Article 376 of the Law.” .

With the communiqué published in the Official Gazette on 26.12.2020, until 01/01/2023, within the scope of Article 376 of the Law, it is stated that “In the calculations regarding capital loss or insolvency, all of the foreign exchange losses and half of the sum of the expenses arising from the leases accrued in 2020 and 2021, depreciation and personnel expenses may not be taken into account”. However, it is not clear how to calculate the amount that will not be taken into account as a foreign exchange difference loss arising from foreign currency obligations that have not yet been fulfilled. As a matter of fact, only exchange rate losses are mentioned in the communiqué and it is seen that exchange rate revenues are not mentioned at all. For this reason, it is not clear whether all of the exchange rate losses or the loss incurred as a result of the calculation made by taking into account the revenues will be excluded from the calculation in the calculation to be made. Due to the economic problems experienced, the lack of a clear wording on calculation in this regulation poses a problem.

In addition, according to the legal regulations, if it is understood from the last annual balance sheet that two-thirds of the total of the capital and legal reserve funds remain unrequited due to losses, the general assembly may take the following decisions upon the call of the board of directors:

  1. Reduction of capital

  2. Simultaneous increase of capital after the loss is transferred out of the company

  3. Completion of capital.

If the general board does not decide on one of these preventive solutions, an application will be made to the court for the bankruptcy of the company, and the company will begin the liquidation process. For this reason, it is important to take remedial measures by deciding upon the appropriate solution in order to avoid technical bankruptcy.

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.