Turkish Joint Stock Company - Company Limited By Shares Volume 1

Table of Contents Prolog .............................................................................................................................................. 7 Introduction ................................................................................................................................. 9 I. Classification by the number of the shareholders....................................... 10 II. Classification by the legal entity ............................................................................ 11 III. Classification by the liability of the shareholders ...................................... 12 IV. Classification by the mandatory capital requirement .............................. 14 V. Classification by the regulating law ..................................................................... 15 VI. Classification by the key figures of the company ......................................... 16 Chapter 1 I. Definition and Economic Importance ................................................................. 17 A. Definition ......................................................................................................................... 17 1. Legal Personality ...................................................................................................... 19 2. Shares and Share Capital ...................................................................................... 20 3. Exclusive liability of the company .................................................................... 21 B. Economic Importance ................................................................................................ 22 1. Limited liability......................................................................................................... 23 2. Capital vs person ...................................................................................................... 23 3. Transferability of the shares .............................................................................. 23 C. Types of CLS .................................................................................................................... 24 1. Publicly traded companies .................................................................................. 24 2. Publicly listed companies ..................................................................................... 25 3. Holding Companies ................................................................................................. 25 4. Operating companies ............................................................................................. 26 5. Companies of under CML ..................................................................................... 26 6. One-Person companies.......................................................................................... 26 D. Alternatives to the CLS .............................................................................................. 27 1. Limited liability company (Art. 573-644) .................................................... 27 2. Partnership limited by shares ........................................................................... 28 Chapter 2 I. Incorporation .................................................................................................................... 30 A. Preparation for the Establishment ....................................................................... 31 B. Establishment Stage .................................................................................................... 31 1. Founders ...................................................................................................................... 31 2. Articles of association ............................................................................................ 31 a. Mandatory content of the articles of association .................................. 33 b. Conditionally necessary content of the articles of association ....... 36 c. Optional content of the articles of association ....................................... 40 d. Amendment of the articles of association ................................................ 41 3. Subscription of the shares and payment ...................................................... 41 4. Appointing the BoD ................................................................................................ 43 II. Qualified Incorporation .............................................................................................. 43 A. Incorporation with capital in kind ........................................................................ 44 B. Incorporation with acquisition in kind ............................................................... 45 C. Take over a business/enterprise as a contribution in kind or acquisition in kind ....................................................................................................... 46 D. Special privileges for the founders or other persons ................................... 46 III. Acquiring the Legal Personality ............................................................................ 47 A. Effect of the registration............................................................................................ 48 B. Application to the trade registry ........................................................................... 49 C. Inspection by the trade registry ............................................................................ 50 D. Publication in Turkish Trade Registry Gazette ............................................... 50 E. Legal acts prior to the registration at the trade registry ............................ 51 1. Shares issued prior to registration .................................................................. 51 2. Obligations borne before the registration of the company .................. 52 F. Defective Incorporation ............................................................................................. 53 Chapter 3 Corporate Bodies I. General Remarks ............................................................................................................. 54 II. Board of Directors .......................................................................................................... 56 A. Function ............................................................................................................................ 56 B. Election, removal and resignation ........................................................................ 56 1. Election and eligibility requirements ............................................................. 56 2. Removal ....................................................................................................................... 59 3. Resignation ................................................................................................................. 60 C. Duties of the BoD .......................................................................................................... 61 1. Management ............................................................................................................... 61 2. Representation .......................................................................................................... 63 3. Inalienable (non-transferable) Duties of the BoD ..................................... 65 4. Further Duties ........................................................................................................... 68 C. BoD Meetings and Resolutions ............................................................................... 68 D. Defective Resolutions ................................................................................................. 70 E. Rights and the Duties of the BoD Members ...................................................... 71 1. Rights of the BoD members ................................................................................. 72 2. Duties (obligations) of the BoD members .................................................... 74 III. General Assembly ........................................................................................................... 80 A. Non-transferable (inalienable) Authorities ...................................................... 80 1. Amendment of the articles of association ..................................................... 81 2. Election of the members of the BoD, determination of their pecuniary rights and their release ................................................................... 81 3. The election and the removal of the auditor ............................................... 82 4. Approval of the annual accounts, as well as the resolution on the allocation of the balance sheet profit, in particular the determination of the dividend and the directors' share of profits and resolutions regarding the annual report................................................................................ 83 5. Dissolution of the company apart from the legal exceptions ............... 83 6. Wholesale of significant amount of company assets................................ 83 B. Types of General Assembly Meetings .................................................................. 84 1. Ordinary general assembly meetings ............................................................ 84 2. Extraordinary general assembly meetings .................................................. 85 3. Universal general assembly meetings ................................................................. 85 4. Special general assembly meeting of the privileged shareholders ... 86 C. Preparation for the general assembly meeting ............................................... 87 1. Convening the general assembly meeting .................................................... 87 2. Persons authorized to convene the general assembly meeting .......... 88 3. Per