On May 29, 2024, a number of amendments were made to the Turkish Commercial Code (“TCC”) by the “Law Amending the Turkish Commercial Code and Certain Laws” numbered 7511 (“Amending Law”). Main features of the Amending Law are as follows:

Minimum Share Capital Requirement

The minimum requirements for share capital were increased on November 25, 2023, (i) from 50,000 TL to 250,000 TL for joint-stock companies, (ii) from 100,000 TL to 500,000 TL for non-public joint-stock companies that have adopted the registered capital system, and (iii) from 10,000 TL to 50,000 TL for limited liability companies. As per the new Provisional Article 15, both the joint-stock companies and the limited liability companies established before such rule and whose share capital is below the minimum required amounts are now under an obligation to increase their share capital to the amounts provided above by December 31, 2026. Any failure to increase their share capital to the required amounts by the specified deadlines shall result in dissolution of the breaching companies, except for companies in the registered capital system, which shall only exit the registered capital system rather than being dissolved.

To facilitate the process, for the general assembly meetings relating to share capital increases, there is no meeting quorum requirement and the voting quorum shall be the majority of those present in the relevant general assembly meeting (as opposed to the previous voting quorum of “¼ of shareholding” and meeting quorum of “majority of the attendees”), and the privileges set forth in the articles of association cannot be used in these resolutions.

The authority to extend the “December 31, 2026” deadline is granted to T.R. Ministry of Commerce, for a maximum of two times for additional periods of one year.

Allocation of Duties of the Board Members

Article 366 of the TCC set forth that the board of directors of joint stock companies were required to allocate the duties amongst themselves for periods of one year, which created difficulties when such board members were appointed for longer terms. This rule has been abolished by the Amending Law, and the current version does not set forth a maximum term for allocation. As the maximum term of office for the board of directors is three years pursuant to Article 362 of the TCC, the board of directors will de facto allocate the duties in the board of directors, for a maximum term of three years. It should also be noted that there is no obstacle for companies to distribute duties every year.

Non-delegable Duties of the Board of Directors

Article 375 of the TCC included that “the appointment and dismissal of managers/directors and persons with similar functions and their signature authorities” was one of the non-delegable powers of the board of directors. However, this paragraph has been amended to indicate that “appointing branch managers and granting them signature authorities” is no longer a non-delegable authority.

Call for Convening the Board of Directors Meeting

Article 392 of the TCC only allowed the chairman of the board of directors to convene a board of directors meeting. This created difficulties in convening meetings in the past, and now with the amendments, any member of the board of directors shall be entitled make a written request to the chairman of the board of directors, following such request, the chairman has the discretion to call a meeting if deemed appropriate. However, if the request is made by the majority of the board members, the chairman is required to call a meeting within 30 days following receipt of such request. In case of any failure to call such meeting, the majority of the board of directors shall be entitled to call the meeting themselves. The amendment also allows joint stock companies to regulate different procedures in their articles of association.