COMPANY LAW

12.12.2023
Öğr. Gör. Begüm Yiğit
 Business Associations

Business association = Company

Business associations are those organizations that are basically formed

by one or more persons for profit-sharing purposes.

Certain types of associations are classified as business associations

under Turkish Commercial Code.
 Business Associations

All these associations have a legal personality, which is different from

those of the persons who create them (TCC Art 125).

The personality is acquired upon registration in an officially kept

registration book (trade registry).

All business associations are considered as "merchants" and therefore,

must fulfill the obligations of merchants (TCC Art 16).
 Types of Business Associations

General Partnership (Kollektif şirket)

Limited Partnership (Komandit şirket)

Limited Partnership in which the Capital is Divided into Shares (sermayesi

paylara bölünmüş komandit şirket)

Joint Stock Company

Limited Liability Company

B.A. Where Persons Are Important

In associations where the identity of the persons who are partners is

important to those dealing with the association, the members will usually
have unlimited liability.
In such a case, the partners will generally know each other personally and
should have the confidence in each other.
Because of their unlimited liability, partners are interested in the
administration of the association personally.
 General Partnership

Example of association where persons are important

It is formed by two or more persons who enter into a written

partnership agreement.

In principle, each partner has the right and duty to participate in the
partnership's administration (TCC Art 218).

Partners have unlimited liability (TCC Art 236).

 Limited Partnership

Another type of partnership where persons are important

In such a partnership, there are 2 types of partners, those who have

unlimited liability (komandite) and those who have limited liability
(komanditer).
 B.A. Where Capital is Important

In business associations where capital rather than the identity of the association's partners is
more important factor, the members have generally limited liability.
Here, the amount of money contributed or promised by the shareholders rather than the
personal wealth and reputation of the partners, is significant.
The number of the shareholders may be large.
The administration of the association is not in the hands of the shareholders but rather of the
administrator or board of directors.
Typical examples-> Joint stock companies and limited liability companies.
 Joint Stock Companies

TCC regulates joint stock companies in detail.

Those corporations which have more than 500 shareholders or those who offer
their shares or bonds to the public are subject to Capital Market Code.
A joint stock company may be incorporated with one person and the minimum
capital of incorporation must be TRY 250,000.
The corporation acquires legal personality at the time of registration in the
commercial register (TCC Art 355).
 Organization

General Assembly
The shareholders or their attorneys constitute general assembly. The persons
who own/hold shares of the company are called as "shareholders".
In the ordinary general meeting, shareholders discuss and approve certain
matters such as the annual report and balance sheet.
They may also elect the directors and auditors, may remove them and may
authorize the distribution of dividends.
 Organization

Board of Directors

The administration of a joint stock company is carried out by the

Board of Directors.

The BoD consists of one or more persons and they are elected by the
shareholders for terms of not more than three years each.
 Board of Directors

The internal administration of a joint stock company is the

responsibility of the BoD.

They prepare the annual report and balance sheet.

They also represent the joint stock company in its dealings with others.

In principle, the signature of at least two members of the BoD is

necessary for such dealings.
 Audit

With the enactment of new TCC, the control organ of joint stock
companies (internal auditors) has been abolished.

Instead, an outside auditing system for large corporations is

introduced.

Auditing of such corporations will be performed by independent

professional auditors, based on certain standards.