Dissolution Reasons for Joint Stock Companies in Turkey

There are several reasons why a joint stock company (JSC) in Turkey may be dissolved:

1. Expiration of Term:

• If the JSC has a predefined term specified in its articles of association, it automatically dissolves upon reaching that date, unless it continues operations and amends its articles to remove the term limitation.
  

2. Realization or Impossibility of Purpose:

• The company dissolves if it achieves its stated purpose or if achieving that purpose becomes impossible.
  

3. Provisions in Articles of Association:

• The JSC's articles of association may include specific conditions for dissolution, and the company will dissolve upon the occurrence of any such event.
  

4. Court Decision:

• A court may order the dissolution of the JSC in various situations, such as bankruptcy, inability to pay debts, or violation of laws.
  

5. Shareholder Decision:

• In certain circumstances, shareholders representing a specific percentage of the capital (usually 10% or 5% for public companies) can petition the court to dissolve the company if they have just cause.
  

Additional Points:

• Upon dissolution, the JSC enters liquidation proceedings to settle its debts, sell its assets, and distribute the remaining funds to shareholders according to their ownership stake.

• The specific procedures and requirements for dissolution may vary depending on the reason for dissolution and applicable regulations.

You can find the articles of the Turkish Commercial Code regarding the termination of joint stock companies below;

Article 529

Dissolution of a Joint Stock Company

(1) A joint stock company is dissolved in the following cases:

(a) The expiration of the period specified in the articles of association, if the company has not become indefinite by continuing its operations,

(b) The realization of the company's objective or the discovery that the realization of the objective has become impossible,

(c) The occurrence of a cause of dissolution set forth in the articles of association,

(d) The adaptation of a general assembly resolution in accordance with Article 421 (3) and (4),

(e) The adjudication of bankruptcy,

(f) The occurrence of other circumstances stipulated by law.

2. Special Cases

(a) Lack of organs

Article 530

Dissolution Lawsuit

(1) If, for a long time, one of the statutory organs of the company has been absent or the general assembly has been unable to convene; upon request of the shareholders, creditors of the company or the Ministry of Customs and Trade, the commercial court of the company's domicile shall, having heard the board, give time for the company to make the situation compliant with the law. If the failure cannot be fixed within the specified time, then the court shall decide on dissolution of the company.

(2) The lawsuit is filed, the court may order establishment of necessary measures upon request of either party.

Article 531

Dissolution Due to a Just Cause

(1) If there is a just cause, the shareholders representing at least one-tenth of the capital (in publicly held joint stock companies, at least one-twentieth of the capital) may apply to the commercial court, within whose territory the company's registered office is located, for dissolution of the company. The court may order, instead of dissolution, that the claimant shareholders be paid the real value of their respective shares (values as at the closest time to order) and expelled from the company or any other solution as appropriate and acceptable for the specific case.