The Law No. 7511 on Amendments to the Turkish Commercial Code and Certain Laws (the “Amendment”) was published in the Official Gazette dated May 29, 2024 and numbered 32560. The Amendment has made changes to the Turkish Commercial Code No. 6102 (the “TCC”) and the significant amendments are as follows:

• The obligation to elect the Chairperson and Vice-Chairperson of the Board of Directors of joint stock companies every year has been abolished.

Prior to the Amendment, the election of the Chairperson and Vice-Chairperson of the Board of Directors was held every year, even if the term of office of the Board of Directors continued.

As per the Amendment, the obligation to elect the Chairperson and Vice-Chairperson of the Board of Directors every year has been abolished. The Chairperson and Vice-Chairperson of the Board of Directors may be elected to take office during the term of office of the Board of Directors.

• The appointment of a branch manager has been removed from the non-transferable and inalienable duties and powers of the board of directors.

The Amendment aims to facilitate the operations and business processes of companies with a large branch network.  Thus, branch managers will be able to be appointed and dismissed without a board resolution.

• In cases where the Chairperson of the Board of Directors fails to call the Board of Directors for a meeting upon the written request of the majority of the members of the Board of Directors, the call may be made directly by the requesting members of the Board of Directors.

Prior to the Amendment, if the members of the Board of Directors requested the Chairperson to call the Board of Directors for a meeting, it was possible for the Chairperson of the Board of Directors not to fulfil the meeting request.

After the Amendment, upon the written request of the majority of the members of the Board of Directors, the Chairperson of the Board of Directors will be obliged to call the Board of Directors for a meeting to be held within thirty days at the latest from the date of receipt of the request. In cases where the Board of Directors is not called for a meeting within this period or the Chairperson or Vice-Chairperson of the Board of Directors cannot be reached, the call may be made directly by the requestors.

Furthermore, the Articles of Association may provide for a different procedure for calling the Board of Directors for a meeting.

• In the proceedings regarding the reinstatement of a company or a cooperative, the relevant trade registry directorate shall not be entitled to judicial expenses and attorney fees.

Pursuant to Provisional Article 7 of the TCC, in the reinstatement proceedings filed against the deregistered companies / cooperatives, since the lawsuit was filed against the trade registry directorates, the trade registry directorates could be awarded with the court’s decision on reinstatement, since they were legal adversaries in the lawsuit.

In the proceedings to be held regarding the reinstatement of the company or co-operative whose registration has been deleted in accordance with the procedure stipulated by the Amendment, the relevant trade registry directorate will not be charged with judicial expenses and attorney fees.

• Joint stock companies and limited liability companies whose share capital is below the minimum share capital amounts are obliged to increase their share capital until December 31, 2026.

According to the Presidential Decree numbered 7887 published in the Official Gazette dated November 25, 2023 and numbered 32380, the minimum share capital amounts for joint stock and limited liability companies had been amended to be valid for companies to be established after January 1, 2024.

The initial share capital amounts were increased

• from TRY 50,000 to TRY 250,000 for joint stock companies,

• from TRY 100,000 to TRY 500,000 for non-public joint stock companies that have adopted the registered share capital system, and

• from TRY 10,000 to TRY 50,000 for limited liability companies.
  
  

However, no share capital increase obligation was imposed on limited liability companies and joint stock companies with share capitals below the specified amounts.

Pursuant to the Amendment, joint stock companies and limited liability companies whose share capitals are below the minimum share capital amount are required to adjust to the new share capital amounts until December 31, 2026, and joint stock companies and limited liability companies that do not increase their share capitals by the minimum share capital amounts will be deemed to have dissolved.

Non-public joint stock companies which have accepted the registered share capital system with an issued share capital of at least TRY 250,000 will be deemed to have exited from the registered share capital system unless they increase their initial share capital and issued share capital to TRY 500,000 by the said date.

In the general assemblies to be held to increase the share capital to the prescribed amounts, no meeting quorum will be required, decisions will be taken with the majority of the votes present at the meeting, and privileges cannot be used against these decisions.

The Ministry of Trade of Türkiye may extend the adjustment period set as December 31, 2026 at most twice for one year each.