Law Numbered 7511 on Amendments to the Turkish Commercial Code and Certain Laws entered into force in Türkiye after publication in the Official Gazette on 29 May 2024, which includes key amendments to the Turkish Commercial Code (TCC) numbered 6102. The most important amendments to the TCC include the following:
Term of office of the chairman and vice-chairman of the board of directors
With the amendment of Article 366 of the TCC, the rule for the annual re-election of the chairman and the vice-chairman of the board of directors has been changed in order to align their term of office with the term of office of the board of directors. Thus, instead of being elected for one year, these persons will be able to serve as chairman and vice-chairman of the board of directors for the same term that members of the board of directors are elected (which is a maximum term of 3 (three) years).
Appointment of branch managers
Another amendment relates to the non-transferable duties and powers of the board of directors under Article 375 of the TCC. In order to facilitate the efficient operation of a company, the appointment and dismissal of branch managers for the company have been removed from the non-transferable and inalienable duties and powers of the board of directors. In particular, for companies with many branches and a large number of employees with signatory powers, the appointment of branch managers has been removed from the inalienable powers of the board of directors in order to ensure swift operation.
Calling the Board of Directors to a meeting upon the request of the majority of the board members
Pursuant to the Article 392 of the TCC, each member of the board of directors may request the chairman to call the board of directors for a meeting in writing. Previously, this provision was subject to the initiative of the chairman of the board of directors. In order to prevent arbitrary practices, the article is amended to the effect that the chairman is obliged to convene a meeting of the board of directors at the written request of the majority of the members. In the event that the chairman does not convene a meeting of the board of directors within this period or in the event that the chairman or the vice-chairman cannot be reached, the request for a meeting may be made directly to the board of directors by the persons calling the meeting.
Reclamation lawsuits
In reclamation lawsuits of companies that were duly removed from the trade registry, the trade registry directorates were obligatorily made a party to the lawsuit. Therefore, judicial expenses and attorney fees were awarded against them. It is now regulated that if the removal from the registry has been duly made, no judicial expenses and attorney’s fees shall be imposed against the trade registry directorate.
Increased minimum share capital amounts
Previously, with Presidential Decree Numbered 7887, published in the Official Gazette on 25 November 2023 and enacted on 1 January 2024, the minimum capital amount of joint stock and limited liability companies increased. The following details the increase in minimum capital amounts for:
- Joint stock companies, increased from TRY 50,000 to TRY 250,000;
- Limited companies, increased from TRY 10,000 to TRY 50,000; and
- Non-public joint stock companies that have adopted the registered capital system (kayıtlı sermaye sistemi) from TRY 100,000 to TRY 500,000.
With the provisional article added to the TCC, companies established before 1 January 2024 and whose minimum capital amounts do not comply with the current regulation are given a deadline until 31 December 2026. If the capital amount is not increased in accordance with the TCC within this period, these companies will be dissolved. If the capital amount is not increased to TRY 500,000 for non-public joint stock companies that have adopted the registered capital system, they will be deemed to have left this system. If it is not increased to TRY 250,000, it will be deemed to be dissolved.
Conclusion
The amendments to the TCC were made to solve implementation problems in the distribution of duties, establish the non-transferable and inalienable powers of the board of directors and the procedures for convening meetings, and ensure that the board of directors can effectively take decisions. In addition, with the amendment that has entered into force, all joint-stock and limited liability companies are obliged to increase their capital to the current minimum capital amounts. Companies are required to increase their capital to the current minimum capital amounts by 31 December 2026, and the new regulation must be considered in transactions such as capital increases and decreases.
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