Correct as of 9:30 AM, 25 March 2020. This article is not being maintained.
According to the Turkish Commercial Code ("TCC"), joint-stock companies and limited liability companies should conduct ordinary general assembly meetings within three (3) months after the end of every operating cycle (faaliyet dönemi).
In general, companies prefer calendar year as the operating cycle; by doing so, the ordinary general assembly meetings should be conducted by the end of March. However, as the coronavirus outbreak poses a problem for this obligation, a statement was made by the Ministry of Commerce.
On 20 March, 2020, the Ministry of Commerce announced the measures listed below taken in this regard.
- Ordinary general assembly meetings, to which attendees were previously invited to by the governing bodies in accordance with the TCC and the articles of association, are allowed to be cancelled by a decision to be taken by the governing bodies, without waiting for the general assembly to be held for the purpose of making the decision of postponement. Thus, this decision does not refer to the postponing of all ordinary general assembly meetings but only those for which the date had been determined and a decision had been taken. These general assemblies can be postponed with the decision of the Board of Directors or the Board of Managers. The decision regarding the postponement taken by Board of Directors in joint-stock companies and Board of Managers in limited liability companies and the announcement regarding this decision are to be sent to the Directorate of the Turkish Trade Registry Gazette.Pursuant to Article 1527 of the TCC, in order to prevent the epidemic in companies, ordinary general assembly meetings can be held using the electronic general assembly system without participating in the physical environment. Since the foreseen issue is advisory, it will not be possible for companies to prevent the shareholders' physical participation in general assembly meetings.
- In practice, the public companies must have the option to conduct their meetings on the Electronic General Assembly Meeting System, and a non-public company could hold its ordinary general assembly meetings electronically by incorporating a provision in their articles of association. Within the scope of the preventive measures, the Ministry of Trade has enabled non-public companies of which do not integrate such provision to hold the planned general assembly meetings and/or board of directors meetings during this period through the "Electronic General Assembly Meeting System" and "Electronic Board of Directors System, respectively. Following the decision of the Ministry of Trade, the Central Securities Depository (Merkezi Kayıt Kuruluşu) announced that discounted fees would be applied to the electronically held meetings.
Companies should obtain support services from the Central Securities Depository, and the right holders must be able to participate in the electronic environment. The contract amendment regarding the provision which enables the meetings to be held in an electronic environment can be held at the first general meeting to be held thereafter.
Postponement of ordinary general assembly meetings will be advantageous for companies; however, there are still certain issues that may cause setbacks and uncertainty. For example, some companies may have difficulties regarding the decision-making process if the members of the Board of Directors have concluded their term on the board.
For more information about the announcement, contact your regular CMS advisor or local CMS experts: Dr. Döne Yalçın or Alaz Eker Ündar.