Turkish Commercial Code

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ARTICLE 124- (1) Trading companies; It consists of collective, limited, joint stock, limited and cooperative companies.

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 (2) In this Law, collective and limited partnership companies; joint stock, limited liability companies and limited partnerships whose capital is divided into shares are considered as capital companies.       _cc781905-5cde-3194-bb3b3b-136bad  _cc781905-5cde-3194- ccde-3194cf13631365c5cf3b31994cbdc13653155cf -bb3b-136bad5cf58d_    

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When the continuing articles of the relevant Law are examined as a whole, it is seen that the companies were established in the manner stipulated in the law for the purpose of carrying out commercial activities, with a legal entity separate from their shareholders/shareholders, with rights and legal capacity they use through their authorized representatives, and their distinctive features are determined by law. It is possible to define them as private law persons regulated.

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Article 126 of the TCC clearly states that, without prejudice to the provisions specific to the type of companies, the general provisions of the Turkish Civil Code regarding legal persons and in cases where there is no provision in the TCC, the provisions of the Turkish Code of Obligations regarding ordinary companies will also be applied to commercial companies to the extent that they comply with the nature of the company type. . 

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In company law, it is possible to distinguish commercial companies as sole proprietorships and capital companies.  

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As a common provision in both types of companies;

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The partners have debts to invest capital in the company,

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Each partner is responsible for the company due to the capital investment debt committed in the duly drawn up and signed company contract,

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If money is agreed as capital, if there is no contrary provision in the articles of association or the articles of association, additional interest may be charged in case of delay, without prejudice to the right to compensation,

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The partner who brings the receivable from the third party to the company as capital shall be deemed to have not fulfilled its capital investment debt until the collection of this receivable,

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Provided that there is no contrary provision in the law and it is stated in the articles of association, the partners may charge interest for the capital they have invested in the company and a fee for their services,

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There is a special regulation regarding the transformation of the limited liability company into a limited liability company and the transformation of the limited liability company into a limited liability company, where they can carry out the merger, division or type change transactions by meeting the conditions. 

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It is regulated that they can form a group of companies.

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CAPITAL DEBT IN TRADING COMPANIES

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Money, receivables, valuable papers, shares of the capital company, intellectual property rights, movables, all kinds of immovables, _cc781905-5cde-3194- bb3b-136bad5cf58d_the rights of use and use of movable and immovables, their personal efforts, commercial reputations, commercial enterprises, electronic media that can be used justifiably, their fields, names and signs and other values, mining licenses and other rights with economic value, such as any transferable and cashable It is possible for them to bring in any kind of value as capital.

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However, TCC article 307/2, which regulates that the limited partner cannot put his personal effort and commercial reputation into the company as capital debt, article 342/1 of the TCC, which regulates the commitment to put capital in joint stock companies, and article 581/1 of the TCC, which regulates the commitment to put capital in limited liability companies, _cc781905-5cde-3194 -bb3b-136bad5cf58d_according to  , items of assets, including intellectual property rights and virtual environments, which do not have limited real rights, liens and measures, can be evaluated and transferred, can be put as capital in kind, but  service performance Exceptions are the provisions regarding commercial reputation and overdue receivables that cannot be capital.

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1-A- Putting the Same Capital in the Company

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• It is possible for the partners of the company to bring cash as capital to the company, as well as an in-kind value or assets as capital. In other words, the shareholders of the company can undertake the capital provision in cash and bring cash to the company, or they can be under the obligation of putting capital in the form of in-month. Values such as movable and immovable properties and rights to use and benefit from them, intellectual property rights, mining licenses, commercial enterprises, transferable electronic media that are used rightfully, fields, names and signs are considered capital in kind. (TCC article 127) It is not possible to bring personal labor and commercial reputation to joint stock and limited companies as capital in kind. In addition,  personal labor and commercial reputation of the limited partner in a limited company cannot be put as capital.

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• TCC Article 128/2- If the immovables with the values determined by the expert in the articles of association or the articles of association are annotated on the title deed, the intellectual property rights and other values, if any, are recorded in their private registers in accordance with this provision, and the movables are entrusted to a reliable person. Registration in the private register removes goodwill.

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• The provisions of the articles of association, which include the debt of immovable property as capital or a right in rem that exists or will be established on the immovable, are valid without seeking an official form.

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• In the event that an economic value other than money or a movable asset is borrowed as capital, the company can directly dispose of these as an owner, from the moment it acquires legal personality.

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• In case the ownership of immovable or other real right is invested as capital, registration in the land registry is required in order for the company to dispose of them.

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• The request for the registration of property and other real rights to the land registry and notifications regarding the registrations to be made to other registries are made ex officio and immediately by the director of the trade registry. The company reserves the right to make a unilateral request. 

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1-B- Procedure Regarding Putting Same Capital

 

• In order to determine the capital value objectively, when capital in kind is desired to be invested in the company, a valuation must be made by an expert from the Commercial Court of First Instance in the jurisdiction where the company's headquarters is located. Decisions made by Commercial Courts of First Instance are final.

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• TCC article 131/1 “The values to be determined by the expert for the months set as capital are deemed to have been accepted by the relevant persons.”

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• Article 343/1 of the TCC “The value of the businesses and real estates to be taken over during the establishment with the capital in kind is appraised by the experts appointed by the commercial court of first instance in the place where the company headquarters will be located. In the valuation report, it is stated that the valuation method applied is the most fair and appropriate choice for everyone in terms of the characteristics of the concrete case; the collectability and exact values of the receivables placed as capital, where the reality, validity and compliance with article 342 are determined; The amount of share to be allocated for each asset put in kind and the Turkish Lira equivalent are disclosed on satisfactory grounds and in accordance with the necessities of the principle of accountability. Founders (…)(1) and stakeholders may object to this report. The expert judgment approved by the court is final.”

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• The purpose of determining the real value of the real capital by means of an expert is to prevent the damage to the interests of both the company and the shareholders by determining the real value of the capital in kind.

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• Article 131/2 of the TCC “Unless otherwise agreed in the articles of association or the articles of association, the ownership of the months put in as capital belongs to the company and the rights are transferred to the company.”

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• It has been accepted that the company agreement, which stipulates the placement of the determined immovables as capital to the company, will be valid without making an official contract, regardless of the special form  ie. However, in this case, an annotation must be submitted to the relevant land registry after the conclusion of the contract. In order for the established company to dispose of the immovable, the immovables must be registered in the name of the company in the  deed registry.

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• In movable capital, it is obligatory to deliver the promised movable to a reliable person. In order for the company to dispose of the movables, it is sufficient that the articles of association have been registered and announced.

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• It is possible for the partners to put a commercial enterprise in the company as capital in kind, and the transactions regarding the transfer of the enterprise must be completed in order for the commitment to be fulfilled. Although it is not necessary to transfer the same or other capital in the transferred enterprise one by one, the capital values of the transferred enterprise should be counted one by one in the articles of association in order to determine and determine the capital value of the enterprise, and the value should be determined by an expert in the Commercial Court of First Instance.

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• While receivables from third parties can be brought to commercial companies as capital in kind, it should not be forgotten that in joint stock companies, this receivable can be put as capital if it is a "due" receivable.

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• In addition, a partner who has transferred his receivables to the company as capital cannot get rid of the capital investment debt unless the receivables are collected by the company.

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• Following the company agreement registered with the trade registry, the trade registry manager will notify the relevant registries (deed, trademark, patent, etc.) ex officio.

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1-b- State of Contrary to the Commitment to Put in Capital

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The company may demand and sue each partner to fulfill its capital investment debt, as well as seek compensation for the loss incurred due to delay in fulfillment. A notice is required for a claim for compensation. Partners can also file this lawsuit in private companies (TCC article 128/7).

 

In order to protect the rights committed by the partners to be invested as capital, precautionary measures may be requested by the founders against the partners. For lawsuits to be filed upon the measure, the period stipulated in the Code of Civil Procedure starts to run only from the date of registration and announcement of the company. (TCC article 128/8)

 

In paragraphs 7 and 8 of Article 128, the legislator has referred to the legal remedies that can be taken against the partner who does not fulfill the commitment to put in capital within the agreed period and as agreed in the contract, but also determined other ways for each company.

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However, if the capital has been decided in cash but not paid in due time, default interest will be paid as of the registration date of the company, provided that the right to claim compensation is not prejudiced due to article 128 of the TCC, and if there is no provision in the articles of association or the articles of association.

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STATUS OF FOREIGN COMMITMENTS TO THE COMPANY ORGANIZATION WITH NON-CASH CAPITAL

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• As regulated in the Foreign Direct Investment Law No. 4785, foreign investors are free to make foreign direct investments in Turkey,  domestic investors are subject to equal treatment.   

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• Therefore, foreign real and legal persons can establish a trading company in Turkey, become a partner in the established company, and engage in commercial activities as individuals if they meet certain residence time conditions.

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• It is possible for foreign real and legal persons to undertake to put in non-cash capital as company capital. 

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• However, the valuation of non-cash capital is made within the framework of the provisions of the Turkish Commercial Code.

 

• In case the securities of companies established in foreign countries are used as investment instruments, the evaluations of the authorities authorized to determine the value according to the legislation of the country of origin or experts to be determined by the courts of the country of origin or international assessment institutions are taken as basis.

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ESTABLISHMENTS OF COMPANIES

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3-1- JOINT STOCK COMPANY

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If the scope of activity of the joint stock company is not one of the fields of activity specified in the communiqué published by the Ministry of Commerce, in the articles of association, in which the founders unconditionally undertake to pay the entire capital, their signatures are notarized or signed in the presence of the trade registry director or deputy, It is established by the declaration of their will to establish a joint stock company. It must be announced in the Trade Registry where the company headquarters is located within 30 days.

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The articles of association must be made in writing and the signatures of all founders must be notarized or the articles of association must be signed in the presence of the trade registry director or his deputy.

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A joint stock company gains legal personality upon registration in the trade registry.

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3-2- LIMITED COMPANY

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The requirement that the company contract will be made in writing and signed by the founders in the presence of authorized personnel at the trade registry directorate also applies to limited liability companies.

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A limited liability company is established when the founders declare their will to establish a limited liability company in the company contract signed in the presence of authorized personnel at the trade registry directorate, in which they unconditionally undertake to pay the entire capital, which is drawn up in accordance with the law.

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A limited company gains legal personality upon registration in the trade registry.

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3-3- COLLECTIVE COMPANY

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The collective company agreement is also subject to written form, and the signatures of the partners must be approved by the notary public or the company contract must be signed in the presence of the trade registry director or his deputy.  ( TTK article 212)

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Within 15 days from the establishment of the company, it is obligatory to request that the certified copy of the company contract be registered in the trade registry where the company headquarters is located.

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The collective company gains legal personality upon registration with the Trade Registry.

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A collective company whose contract has not been made legally or one or some of the records that are obligatory to be included in the contract are incomplete or invalid, is considered an ordinary company, and the provisions of the Turkish Code of Obligations regarding ordinary companies are applied, provided that the provision of Article 216 of the TCC is reserved.

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3-4- COMMANDIT COMPANY

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The legislator has ordered that the articles pertaining to the establishment and legal personality of the collective company shall be applied exactly in the matters regarding the establishment of the company and its acquisition of legal personality.

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In a limited partnership consisting of limited and limited partners, the limited partner must be a real person.

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A joint limited liability company with no limited liability to the creditors of the company is called a limited joint limited liability company.

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It is obligatory to indicate the capital of the limited partner in the articles of association.

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GROUP OF COMPANIES

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“Group of Companies” (Konzern) entered our legal system with the Turkish Commercial Code No. 6102.

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In Article 195 of the TCC, it is regulated in which cases the legal bond between more than one company will give rise to a group of companies.

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According to the text of the article;

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If a trading company owns, directly or indirectly, the majority of the voting rights of another trading company, or

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If a trading company has the right to elect, directly or indirectly, the majority of members who can make decisions in the management body, pursuant to the articles of association of another trading company, or

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If a trading company, directly or indirectly, constitutes the majority of the voting rights of another trading company, either alone or together with other shareholders or partners, based on a contract, in addition to its own voting rights; or

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If a trading company can hold another trading company under its dominance pursuant to a contract or by any other means, and at least one of these companies has its headquarters in Turkey, the first company is the dominant company, the other is a subsidiary company, and the rules regarding the group of companies are applied. It is seen that dominance is regulated in the form of "extended control" in the provisions of the Turkish Commercial Code.

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Groups of companies are not structures that comply with the theoretical structure of company law.

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The corporate group does not have a legal personality, nor does it have a separate organizational structure or body.

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The group of companies does not have a license either. The group of companies is a legal concept that has been introduced both to increase competitiveness in commercial life and to protect the interests of the group partners in this process.

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With Article 195/5 of the TCC, the legislator stated that the judge of the group can be not only the commercial company, but also the real person, ordinary partnership, foundation, association and other persons and structures such as public legal entities, in order to prevent the provisions regarding the corporate group from being swayed.

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In Article 195 of the Trade Registry Regulation, it is stated that the group of companies will consist of at least three companies, and a draft has been prepared within the scope of the law amendment in the TCC in this regard.

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MUTUAL PARTICIPATION

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Mutual participation is when companies in the group of companies own at least twenty-five percent of each other's capital shares.

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If one of the companies dominates the other at the same time, the other is a subsidiary; If both dominate the other at the same time, both are considered both subsidiaries and controlling companies.