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General assemblies and board of directors are compulsory executive organs of the joint stock companies.

I-                    GENERAL ASSEMBLY

General assembly, is a the executive organ that is constituted of shareholders and decides issues in the Turkish Commercial Code numbered 6102 (“TCC”) such as nomination, dismissal, acquittal, of board of director members, distribution of profit, revision of articles of association, increase or decrease of capital, approval of financial statements, and annual activity report of company.


Authorization and convention of assembly are set forth at Article 407 and following articles of the TCC.

i-                    Assembly Dates

Pursuant to Article 409 of the TCC general assembly can be convened ordinary or extraordinary.

Ordinary general assembly meeting shall be convened within three months as of closure of each activity period. In these assemblies, nomination of organs, financial statements, annual report of board of directors, usage of profit, distribution of profit, acquittal of board of director members and any other subjects that is related to the activity period and deemed necessary shall be discussed and resolution shall be obtained.

In case shareholders will deem necessary, general assembly can be convened extraordinary.

General assemblies shall be convened at the registered address of the company unless it is set forth at the articles of association.

ii-                   Invitation to General Assembly

Invitation is duty of board of directors. In accordance with Article 410 of the TCC even though duty period of board of directors is finalized, it is authorized to perform invitation to general assembly. In case company is in liquidation, liquidators are authorized for invitation of general assembly for discussion of the issues related to liquidators’ assignments.

In case board of directors can not convene continuously, it is not possible that quorum will be reached; one shareholder can apply to court with the request of authorization of general assembly invitation. If court will decide one shareholder to invite general assembly to convene, it will be valid and courts decision will be definite.

As per Article 414 of TCC general assembly shall be invited as it was mentioned in the articles of association, via an invitation that will be announced at companies’ web site and Turkish Commercial Register Gazette. This invitation shall be performed at least 2 weeks prior to the general assembly, excluding invitation and general assembly dates. In addition, shareholders written at the shareholders book and to shareholders that hold share certificate or submitted company any document probative of share ownership shall be invited to via registered mail.

If all shareholders or representatives will be present, in case none of them will object, general assembly can be convened without invitation performed in accordance with TCC.

iii-                 Agenda

Agenda of the general assembly shall be detected by the party that performs the invitation in accordance with Article 413 of the TCC.

As per Article 411 of the TCC shareholders that constitute at least 1/10 of the capital, or shareholders that constitute 1/20 of the capital in public companies, might request board of directors to invite general assembly for the meeting by mentioning grounds and agenda. If the general assembly will convene they might request subjects to be included in the agenda. If it is mentioned in the articles of association fewer shareholders might use invitation rights.

It is possible to include articles to agenda with unanimity in extraordinary general assemblies convened in accordance with Article 416/II of the TCC. Shareholders can not decide contrary in the articles of association.

iv-                 Authorized Persons That Can Attend General Assembly

Shareholders whose names are included in the “list of attendees” drawn up by the Board of Directors may attend general assembly meetings.

The holders of shares tied to certificates, those of temporary certificates for registered shares, and shareholders monitored in terms of records as per Article 10/A of the Capital Market Law, who are all in the list of attendees, or representatives of the aforementioned attend the General Assembly. Natural persons must represent their identity cards as representatives of the legal entities must submit power of attorney.

The holders of bearers’ shares obtain entrance badges by proving that they have such shares in their possession at least one day prior to the date of the general assembly meeting and may attend general assembly meetings by producing these badges. However, such shareholders able to prove their acquisition of bearers’ shares on a date after the issue of entrance badges may also attend general assembly.


v-                  Inalienable Powers of General Assembly

General assembly shall decide on the issues that are set forth in code and articles of association.

As per Article 408 of the TCC below mentioned Powers of general assembly are inalienable.

a) Amendment of articles of association.

b) Nomination, duty period, Powers, salaries and attendance fee, Premium and bonus, acquittal and dismissal of board of directors.

c) Nomination and dismissal of auditor with the excluding situations mentioned in the Code.

d) Obtaining resolutions regarding financial statements, annual report of board of directors, how to use annual profit, determination of profit and earning shares, reserve funds to be added to capital or profit to be distributed, and usage.

e) Termination of company in the situations mentioned in the Code.

f) Wholesale of company assets.

vi-                 Assembly and Quorum

As per Article 418 of TCC general assembly can be convened with attendance of ¼ of shareholders or their representatives, unless it is set forth in TCC or articles of association, in specific situations. This quorum shall be reached during the assembly. In case if quorum will not be reached at the first assembly date, quorum will not be seeked during the second assembly date.

Resolutions shall be obtained with votes of more than half of the present shareholders or their representatives.

If there is no contrary provision set forth in TCC or articles of association, resolutions amending articles of association, shall be obtained at least ½ of the capital, with the more than half of the present shareholder votes. In case quorum will not be reached during the first assembly, second assembly shall be convened within latest one month. Quorum shall be applied as 1/3 of the capital of the company. Provisions decreasing quorum or relative majority is invalid.

Below mentioned resolutions amending articles of association shall be obtained by shareholders that hold whole capital of the company or their representatives. :

a) Resolutions that provides obligations at first or second degree in order to cover balance sheet loss.

b) Resolutions for transfer of place of business to a foreign country.

Below mentioned resolutions amending articles of association shall be obtained by shareholders that hold at least 75/100 company or their representatives.

a) Revision of field of activity completely.

b) İssuing privileged shares.

c) Limitation of transfer of registered shares.

Resolutions obtained by general assembly shall be written in a minutes and notarized copy of this minutes shall be delivered to trade registry and announced. Minutes also shall be announced at web site of the company.


II-                  BOARD OF DIRECTORS

In joint stock companies management is performed via board of directors.


i-                    Board of Directors Members

As per Article 359 of the TCC board of directors shall be consist of one or more persons. Board of directors can be nominated from real or legal persons.

In the event a legal entity is elected as a member of the board of directors only one real person, determined by the legal entity on its behalf, shall also be registered and announced with the legal entity; in addition the registration and an announcement shall be immediately declared on the company’s Web site. Only this registered person can participate in and vote on behalf of the legal entity at the meetings.

In accordance with Article 360 of the TCC In case is stated in the articles of association, certain share

groups, shareholders consisting of a certain group in terms of their qualities and nature, and minorities can be granted the right to be represented on the board of directors. For this purpose the articles of association can stipulate that board members shall be elected from among shareholders comprising a certain group, certain share groups and minorities, or that the right to nominate a candidate for the board of directors can also be granted to them in the articles of association. It is mandatory that the candidate nominated by the general assembly as a board member or who is a member of the group and the minority to whom the right to nominate is granted shall be elected absent fair cause to oppose that candidate. The number of board members performing representation in this way cannot exceed half of the members of the board of directors in public joint stock companies. The regulations regarding independent board members remain in force.

ii-                   Duties and Authorizations of Board of Directors

As per Article 374 of the TCC, management is delegated to board of directors. Article 374 set forth limits of the authorization. The board of directors and the management, to the extent delegated to them, shall be authorized to make decision with regard to all business and transactions required to perform the company’s scope of activity, excluding those subject to the authority of the general assembly by law and the articles of association.

Pursuant to Article 375 of the TCC below mentioned duties of board of directors can not be dispensable.

a) Top-level management of the company and giving instructions in this regard.

b) Determination of the company’s management organization.

c) Establishment of the necessary required system for financial planning, and for accounting and finance audit.

d) Appointment and dismissal of managers and persons acting is similar function and authorized signatories of the company.

e) High-level supervision of whether the persons in charge of management act in accordance with the law, articles of association, internal regulations and written instructions of the board of directors.

f) Keeping the share book, board of directors resolution book and the general assembly meeting and

discussion book, preparation of the annual report and corporate governance disclosure and submission thereof to the general assembly, organization of general assembly meetings, and enforcement of general assembly resolutions.

g) Notification of the court regarding the company’s state of excess of liabilities over assets

In accordance with Article 370 of the TCC in case contrary is provided in articles of association or board of directors is consisting of one person, representation belong to board of directors and shall be used with two signatures.

Board of directors, can transfer their representation authority to one or more managing director or third parties as Manager. However it is obligatory that at least one board of director has the representation authority.

iii-                 Board of Directors Obtaining Resolution

Pursuant to Article 390 of the TCC  unless an aggravating clause set forth in the articles of association, the board of directors shall convene with the majority of all members and make its decisions with the majority of the present members.


Board of directors cannot vote to represent each other and they not allowed participating in the board of directors meetings by proxy.


In case voters are equal, the subject is postponed to next meeting. If votes will be equal in the next meeting, the issue in question is deemed rejected.


If none of the board members request a meeting, board of directors resolutions on a proposal regarding a certain matter made by one of the members can be taken by obtaining the written approval of a majority of all members. All board of directors must receive the same proposal. It is not obligatory that approvals are on the same paper; however, all papers containing approvals must be attached to the board resolution register or converted into a resolution containing the signatures of approvers and attached to the board resolution book to ensure the validity of the resolution.


The resolutions shall be valid only if they are in written form and signed.

In accordance with Article 391 of the TCC board of directors resolutions’ annulment can be requested from court especially below mentioned situations.

a) contradict equal treatment principle

b) do not comply with the basic structure of the joint stock company or do not maintain the principle of protecting the capital

c) violate rights of shareholders of the company or restrict or make these rights difficult to exercise especially untransferable rights

d) are within the non-delegable authorities of other bodies and relevant to the transfer of these authorities


Pursuant to Article 393 of the TCC board member cannot participate in discussions regarding matters which is in conflict between interests of the company and personal interests of the board member or a person of board members lineal consanguinity or his/her spouse or one of his/her blood and in-law relatives up to and including the third degree. This prohibition shall also be applied in cases if acting in good faith requires the non-participation of a board member in that specific meeting. In case of doubt will occur about the existence of such conflict, board of directors shall decide regarding the issue. Board of Director involved can not participate in this voting. Even if the conflict of interest is unknown to the board of directors, the concerned board of directors shall declare it and abide by the prohibition.

Board of Directors has right to obtain information regarding all business and transactions during resolution stage.

Article 392 of the TCC regulates board of directors right to obtain information.

Each board of directors member can request information, ask questions, and conduct an inspection regarding all business and transactions of the company. The request of a board member for any book, record, contract, correspondence or document to be brought to the board of directors meeting, inspection or discussion by the board or members, or requesting information from related manager or employee regarding the matter cannot be rejected. If request is rejected, the provision in paragraph 4 shall apply.


During board of directors meetings persons and committees in charge of company management, as well as all board members, are required to provide information. In case a member’s request regarding this matter cannot be rejected and the member’s questions must be answered.


Each board member can obtain information from people in charge of managing the company regarding the course of business and about certain individual tasks, other than board of directors meetings, in case permission of the chairman of the board is obtained, and if required to perform board of directors duty, he/she can request from the chairman of the board of directors to submit books and files of the company for examination.

In case chairman will not accept a member’s claim to obtain information, to ask questions and examination the matter shall be discussed in board of directors meeting within two days. If the board of directors does not convene or convene and rejects this request the member can apply to commercial court established at the company’s headquarters. The court can review the claim on the file and provide its decision; the court’s decision will be definite.


Chairman of the board of directors cannot obtain information and inspect company books and documents other than board of directors meetings without permission of the board. In case chairman be rejected, the chairman can apply to the court.


The board member’s obtaining information rights cannot be restricted or abolished. Members right to obtain information can be extended via articles of association and the board of directors.

Each board of directors member can request in written way the chairman to convene the board of directors.


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