JOINT STOCK COMPANY IN TURKEY

Joint stock companies (JSCs) are a popular choice for businesses in Turkey, and understanding the relevant laws is crucial for anyone considering establishing or operating one. Here's an overview of some key aspects of joint stock company law in Turkey:

Formation:

• Minimum Shareholders: Only one shareholder is required to establish a JSC.

• Minimum Capital:

• Basic Capital System: Minimum capital of ₺250,000.

• Registered Capital System: Minimum capital of ₺500,000.

• 25% of the share capital must be paid in cash before registration.

• The remaining capital can be paid within 24 months of registration.

• Registration: Requires articles of association and notarized signatures.

Key Characteristics:

• Limited Liability: Shareholders are only liable for the amount of their investment.

• Transferable Shares: Shareholders can freely transfer their shares unless restricted by the articles of association.

• Management: Board of directors manages the company and is responsible for its representation.

• Share Types: Can issue registered and bearer shares, bonds, and other debt instruments.
  

In Turkey, a joint stock company (JSC) must have two mandatory organs:

1. General Assembly (Genel Kurul):

• Represents all shareholders of the company.

• Holds supreme authority and makes crucial decisions for the company, such as:

• Amending the articles of association

• Electing the board of directors and auditors

• Approving annual reports and financial statements

• Deciding on mergers, acquisitions, and dissolution of the company

• Convenes at least once annually, with additional meetings possible if necessary.

• Voting rights are typically proportional to the number of shares held by each shareholder.

2. Board of Directors (Yönetim Kurulu):

• Responsible for the day-to-day management and representation of the company.

• Carries out decisions made by the general assembly.

• Oversees the company's operations, finances, and strategies.

• Comprised of members elected by the general assembly.

• Number of members can vary, but at least one member is required.

In Turkey, a joint stock company (JSC) requires only one shareholder to be established. This means you can form a JSC as a sole owner.

However, it's important to understand the distinction between shareholders and board members:

• Shareholders: Individuals or entities who own shares in the company and hold voting rights based on their ownership stake.

• Board members: Individuals elected by the shareholders to manage the company's day-to-day operations.

While only one shareholder is needed to form a JSC, you can have multiple board members to manage the company effectively. The number of board members can be determined by the company's articles of association, but at least one member is required by law.

Here are some key points to remember:

• Minimum Shareholders: 1

• Minimum Board Members: 1 (although having more is recommended for effective management)

Quorum for Meetings and Resolutions in Joint Stock Companies (JSCs) in Turkey

The quorum requirements for meetings and resolutions in Turkish JSCs are defined by the Turkish Commercial Code (TCC) and the company's articles of association. Here's a breakdown:

Unless a higher quorum is required by this Code or the articles of association, the general assembly shall be convened with the participation of the shareholders or their representatives representing one-fourth of the capital. This quorum must be present during the meeting. If this quorum is not present in the first meeting, no quorum shall be required for the second meeting. Resolutions shall be passed by the majority of the votes represented in the meeting.

Quorum for meeting and quorum for resolution for amendment of articles of association, Unless otherwise provided by law or the articles of association, resolutions, which require amendment of the articles of association, shall be passed by a majority of the votes represented in the meeting during which at least half of the capital must be present. If the quorum is not present in the first meeting, then a second meeting shall be held within one month at the latest. The quorum for the second meeting shall be at least one-third of the capital. Provisions of articles of association lowering the quorum or requiring relative majority shall be void.

Following resolutions, which require amendment of the articles of association, shall be passed unanimously by the shareholders or their representatives:

a) Resolutions imposing obligations and ancillary obligations on the shareholders so as to recoup the balance sheet losses.

(b) Resolutions regarding relocation of the company's registered office to another country.

Following resolutions, which require amendment of the articles of association, shall be passed by the affirmative votes of the shareholders or their representatives holding at least seventy-five percent of the capital:

a) Complete change of the company's field of activity of the company.

b) Creation of privileged shares.

c) Restrictions on the transferability of registered shares.

If the quorums provided in 2 paragraphs abovementioned could not be met in the first meeting, the same quorums shall be required in the subsequent meetings.

In order to resolve on the following matters in the companies, whose share certificates are traded in the stock exchange; the meeting quorum provided in Article 418 shall apply in their general assembly meetings unless otherwise provided in their articles of association:

a) Amendment of the articles of association, which pertains to capital increase and increase of the upper limit of the registered capital.

b) Resolutions on merger, division and conversion.

Registered shareowners, who voted against the complete change of the company's field of activity or creation of privileged shares, shall not be bound by the restrictions on the transferability of the shares for a period of six months from the announcement of the resolution in the Trade Registry Gazette of Turkey.

It's important to note that this is a simplified overview, and the specific legal requirements and procedures can be complex. For in-depth guidance and advice, it's highly recommended to consult with a Turkish lawyer specializing in commercial law.