LIABILITY FOR DEFECTS UNDER SHARE TRANSFER AGREEMENTS

ABSTRACT

Share assignment agreements, are agreements that change the shareholder structure of companies and produce significant legal and economic consequences for both the buyer and the seller. Defects, namely deficiencies in the legal or economic characteristics of the assigned shares, may lead the parties to disputes. Although the liability for defects provisions regulated under the Turkish Code of Obligations Numbered 6098, in principle, are applicable to all sales contracts, their applicability to share transfer agreements is a matter of debate in legal doctrine. In this article, the legal essence of share transfer agreements is examined first, followed by an analysis of the types of contracts to which liability for defects provisions may apply and lastly, the applicability of these provisions to share transfer agreements is evaluated alongside with a review of recent perspectives and practical examples.

Keywords: Share, Share Transfer Agreement, Company, Joint Stock Company, Liability for Defects, Share Transfer

I. INTRODUCTION

The share transfer agreement is one of the fundamental legal acts that result in changes in the distribution of shareholdings in companies and, from time to time, may lead to a shift of executive control. Through the transfer of shares, not only the possession of the share but also the economic rights, the management rights attached to the shares, and an indirect economic influence over the company are transferred. Therefore, the legal and factual attributes of the transferred shares, the financial condition of the company, and the scope of the rights conferred by the shares have significant importance for the parties.

In practice, share transfer agreements are generally treated as a sale of rights. However, depending on the scope and character of the transfer, it is acknowledged that the provisions on liability for defects may also apply in certain cases1. In this regard, the scope and conditions of application of liability for defects may differ depending on the legal essence of the agreement as well as the extent and content of the transfer. The absence of a clear statutory regulation on this matter has led to divergent interpretations in doctrine and judicial decisions, thereby creating significant uncertainty in practice.

II. LEGAL SCOPE OF USUFRUCTUARY LEASES AND THEIR APPLICATION WITH RESPECT TO COVERED COMMERCIAL PREMISES

A. Subject Matter of the Agreement

In general, the subject matter of sales agreements may consist of goods, rights, economic benefits with monetary value, or groups of goods and rights2. Since a share is regarded as a right in terms of its legal nature3, it is argued that share transfer agreements are primarily considered within the scope of a sale of rights4. In a share transfer agreement, the seller’s obligation is to transfer the company share, along with the rights arising therefrom to the buyer. Within this framework, the fact that a share confers corporate governance and property rights, constitutes part of the capital, has market value, and its assignability renders it an economic asset capable of being the subject matter of an agreement of sale.

B. Subject Matter of the Agreement

There are two main approaches regarding the legal nature of a share transfer agreement. Pursuant to the first view, a share transfer is, as a rule, the sale of a right. In these terms, with respect to liability for defects, the provisions of Articles 219 et seq. of the Turkish Code of Obligations Numbered6098 (“TCO”) on the sale of movables do not apply; instead, Articles 191- 193 of the TCO, which are exclusive to the sale of rights, should be applied5. The second view argues that the evaluation should be made depending on the scope and nature of the transfer6. In particular, where the shares assigned grant control over the company or nearly the entire company is assigned, it is accepted that the subject of the transfer is effectively the company itself, and therefore, the provisions on the sale of movables should be applied by analogy7. Finally, there are also Court of Cassation decisions defining the concept of “share” as “movable property8.” In this context, whether a share transfer can be associated with the sale of movables, and thus whether Articles 219 et seq. of the TCO are applicable, is evaluated based on the scope and nature of the transfer, and this issue continues to be a matter of debate in doctrine.

These two main approaches lead to different outcomes in terms of applicable provisions. The first view emphasizes the legal nature of the share and argues the application of the rules specific to the sale of rights, while the second view focuses on the economic and practical effects of the transfer and maintains that, under certain conditions, the provisions on liability for defects in the sale of movables should be applied by analogy. Within this framework, especially in share assigns of an executive nature, the approach adopted becomes decisive for the scope of parties’ rights and obligations and the applicability of liability for defects.

III. APPLICABILITY OF LIABILITY FOR DEFECTS TO SHARE TRANSFER AGREEMENTS

A defect is generally defined as a deviation in a negative sense from the qualities that the sold item should have or has been promised to have; in other words, a deficiency in quality. The institution of liability for defects is fundamentally based on the warranty of conformity theory; according to this theory, the absence of defects in the item sold is an inseparable part of the seller’s duty of delivery. The seller’s primary obligation is to deliver the sold item free from defects or deficiencies in quality. If the seller breaches this obligation, the provisions on liability for defects become applicable.

In this context, Articles 219–231 of the TCO regulate the seller’s obligation to deliver the item sold in accordance with the agreed terms and free from defects. For liability to arise, the item must have been delivered, the defect must be essential, it must not have been known by the buyer, it must have existed prior to delivery, it must not be an obvious defect, and liability must not have been excluded by contract. In addition, the buyer must not have accepted the item in its defective condition.

The institution of liability for defects is not limited solely to sales contracts; the legislator has introduced special provisions for some contracts and accepted the application of sales rules to others by analogy. For instance, in contracts for work, the contractor is obliged to deliver the work free from defects, and in barter contracts, liability for defects arises from the mutual obligations to deliver. Similarly, in share transfer agreements, especially where the transfer ceases to be merely a transfer of rights and effectively takes on the nature of an undertaking of a company, it is argued that Articles 219 et seq. of the TCO may be applied by analogy. Whether liability for defects is applicable to share transfer agreements depends essentially on the approach adopted concerning the legal nature and scope of the transfer. As explained above, since a share is legally characterized as a right, as a rule, Articles 191–193 of the TCO should apply to such contracts. However, if the shares transferred are sufficient to confer control over the company or comprise nearly the entire company, the transaction may be considered economically as a transfer of enterprise, and in such cases, the provisions of Articles 219 et seq. of the TCO on the sale of movables may be applied by analogy9.

Although the transfer of executive shares does not legally amount to a direct transfer of enterprise, it effectively results in decisive influence over the company’s assets, activities, and organizational structure. Since the close connection between company shares and the company’s economic existence turns the transfer of such shares into more than a mere transfer of abstract rights, it becomes an act conferring indirect management over the company as a whole. In many cases, the buyer ties the economic benefit to be gained from the shares directly to the existing or expected value of the company’s assets10. For this reason, in the transfer of executive shares, defects arising from the enterprise that disrupt the company’s economic integrity or organizational structure directly affect the value of the share and the benefit expected by the buyer.

In such cases, due to this direct relationship between the enterprise and the shares, it would be both legally consistent and equitable for the parties to treat defects in the enterprise as defects inherent in the shares themselves, thereby justifying the applicability of Articles 219 et seq. of the TCO. In conclusion, where a defect in the enterprise disrupts its economic integrity or organizational structure, it should be regarded as a defect in the share itself, and the provisions of Articles 219 et seq. of the TCO should apply to such share transfers, to the extent appropriate.

IV. ADAPTATION OF DEFECT CONDITIONS TO SHARE TRANSFER AGREEMENTS

The provisions of the TCO on liability for defects are essentially intended to apply to the sale of tangible goods, and their direct applicability to transactions involving the sale of rights is limited11. Since in share transfer agreements concerning capital companies, the subject matter is the shareholder status along with the rights and obligations attached to it, these contracts are generally considered as sales of rights. The absence of material defects in sales of rights is the main reason why the applicability of defect liability provisions to share transfer agreements is debated.

A. Types of Defects in Share Transfer Agreements

Deficiencies as the source of defects may arise in different ways12. As with tangible goods, the concept of material defect here acquires meaning through the company’s physical assets. Deficiencies, defects, or breakdowns in the company’s machinery, production facilities, or inventory that significantly reduce value may be considered material defects insofar as they directly affect the economic value represented by the share transferred.

A legal defect arises when the rights represented by the share are legally restricted or extinguished. The lack of necessary permits for the company’s activities, the invalidation of intellectual or industrial property rights, the existence of encumbrances such as pledges or usufruct rights over the share, or the share’s failure to have the attributes stated in the transfer are examples of this.

An economic defect arises in cases such as misstatements in the company’s financial statements, excessive indebtedness, liquidity shortages, or the failure to achieve promised profits. When such deficiencies directly affect the economic value of the share and the benefit expected by the buyer, the defect originating from the enterprise is considered inherent in the share itself.

Through this adaptation, although fundamentally designed for movables, Articles 219 et seq. of the TCO, can be applied by analogy to controlling share transfers, thereby clarifying the liability regime for both buyer and seller.

B. Types of Defects in Share Transfer Agreements

For Articles 219 et seq. of the TCO to apply to share transfer agreements, the conditions for liability for defects must be adapted to the subject and nature of the contract. Although the direct application of defect provisions designed for tangible goods is limited, deficiencies in a company’s assets and operations can directly affect the value of shares. Therefore, the conditions for liability for defects under the TCO may be adapted to share transfers as follows:

  1. Transfer of the share to the buyer: Liability for defects in share transfer agreements generally arises only after the transfer has been legally completed. The transfer occurs upon fulfilment of the formal requirements stipulated by law (e.g., endorsement and delivery of a registered share certificate, registration in the share ledger for uncertificated registered shares, delivery for bearer shares13). Until transfer is completed, the seller cannot be held liable for defects.
  2. Existence of a substantial defect in the transferred share: By substantial defect, it is meant that there are deficiencies in the company’s assets or in the legal status of the share that significantly eliminate or diminish the economic purpose of the transfer. Such deficiencies may include defects in the company’s physical assets (material defect), legal deficiencies in permits or intellectual rights (legal defect), or inaccuracies in financial statements (economic defect).
  3. Unawareness of the defect by the buyer: If the buyer knew of the defect at the time of transfer or could have detected it through reasonable inspection, the buyer cannot hold the seller liable. In share transfers, this often becomes evident during the due diligence14 process; deficiencies that remain undiscovered despite this process may be treated as defects.
  4. Existence of the defect prior to completion of the transfer: The defect must have existed before the transfer was completed. Deficiencies arising after the acquisition due to the buyer’s actions or external factors should not fall within the seller’s liability.
  5. The defect not being obvious: Defects that can be easily detected by simple inspection cannot be invoked against the seller if the buyer fails to notify within the legal timeframe after the transfer. For example, if the company’s concordat status has been registered in the trade registry.
  6. Liability not excluded or limited by contract: The parties may limit or exclude the seller’s liability for defects in the share transfer agreement. However, such clauses must not contravene the principle of good faith15.
  7. The buyer not having accepted the defective condition: If the buyer knowingly and explicitly or implicitly accepts the defective condition of the share, they cannot later rely on the provisions regarding defects.

In conclusion, the above elements represent the adapted application of the liability for defects provisions of Articles 219 et seq. of the TCO to the nature of share transfer agreements. Although there is no explicit statutory regulation on this matter, given the characteristics of share transfers and the balance of interests between the parties, these conditions can reasonably be interpreted and applied in this way.

V. CONCLUSION

Share transfer agreements are significant legal transactions that change the equity ownership structure in joint-stock companies and often result in a shift of executive control. The nature of these agreements, the scope of the shares transferred, and their economic effects directly influence the applicable liability regime. Particularly where the transfer ceases to be merely a sale of rights and effectively becomes a transaction conferring control over the company’s assets, activities, and organizational structure, defects affecting the economic value of the shares should not be regarded merely as abstract deficiencies in rights but as deficiencies undermining the integrity of the enterprise.

Although the provisions of the TCO on liability for defects are, as a rule, applicable to the sale of tangible goods, doctrine and case law have advanced strong arguments that these provisions may be applied by analogy in controlling share transfers. This approach is both legally consistent and equitable in terms of maintaining the balance of interests between the parties. Since the buyer often ties the benefit expected from the shares directly to the existing and anticipated value of the company’s assets. Thus, defects originating from the enterprise directly affect the value of the shares and the economic purpose of the agreement.

This study has shown that the conditions for liability for defects under Articles 219 et seq. of the TCO can be adapted and applied to share transfer agreements. Although there is no explicit statutory regulation on this matter, considering the characteristics of share transfers and the legal-economic relationship between the parties, it is possible to apply by analogy the logic underlying the defect provisions for tangible goods. Such an approach will strengthen both contractual security and the principle of commercial good faith. In conclusion, in share transfer agreements of an executive nature, deficiencies in the company’s assets and operations should be regarded as defects inherent in the shares themselves, and the provisions of Articles 219 et seq. of the TCO should be applied by analog to the extent appropriate. Clarification of this approach through future legislative regulations or consistent case law will be important for eliminating uncertainties in practice.

References

  1. Av. Dr. Başak Başar, “Şirket Pay Devir Sözleşmesinde Ayıptan Sorumluluk”, Seçkin Yayınları, 2025, p.2 ↩︎
  2. Prof. Dr. Mustafa Alper Gümüş, “Borçlar Hukuku Özel Hükümler C-I”, Vedat Kitapçılık, 2013, p.16 ↩︎
  3. Doç. Dr. Tamer Bozkurt, “Şirketler Hukuku” Yetkin Yayınları, 2020, p.391 ↩︎
  4. Prof. Dr. Vedat Buz, “Ortaklık Paylarının Devrinde Ayıba Karşı Tekeffül Hükümlerinin Uygulanabilirliği Sorunu”, Banka ve Ticaret Hukuku Dergisi, 2019, p.66 ↩︎
  5. Başar, p.181 ↩︎
  6. Buz, p.84 ↩︎
  7. Zahide Altunbaş Sancak, “Anonim Şirket Özelinde Devralma İşlemlerinde Satıcının Ayıptan Doğan Sorumluluğu”, İstanbul Bilgi Üniversitesi, 2021 p.73 ↩︎
  8. İlker Demirtaş, “Anonim Şirket Pay Devrinde Ayıptan Sorumluluk” İstanbul Bahçeşehir Üniversitesi, 2024, p.21; Yargıtay HGK, E. 2013/13-1234, K. 2015/795, T. 28.01.2015; Yargıtay 13. HD., E. 2011/13353, K. 2011/12995, T. 22.09.2011; Yargıtay 11. HD., E. 2015/3775, K. 2016/2651, T. 09.03.2017 ↩︎
  9. İdil Alaeddinoğlu, “Anonim Ortaklıkta Pay Devri Sözleşmesi”, Ankara Üniversitesi, 2022, p.117-128; Demirtaş p.40 ↩︎
  10. Alaeddinoğlu, p.78 ↩︎
  11. Av. Beyza Aka, “Satıcının Zapttan ve Ayıptan Sorumluluğuna İlişkin Türk Borçlar Kanunu Hükümlerinin Anonim Şirket Pay Satışlarına Uygulanabilirliği”, Galatasaray Üniversitesi Hukuk Fakültesi Dergisi, 2021/2, p.2136 ↩︎
  12. Bkz. Başar p.122-127 ↩︎
  13. Turkish Commercial Law No. 6102 ↩︎
  14. Alaeddinoğlu, s. 69-70, Başar, p.151 ↩︎
  15. Turkish Civil Law No. 4721 ↩︎

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PRE-JOINT STOCK COMPANY IN TURKISH LAW

ABSTRACT

The Turkish Commercial Code No. 6102 makes a dual distinction in terms of the establishment of joint-stock companies and regulates the establishment process separately as establishment and gaining legal personality. In fact, although a joint-stock company is considered to be established when the founders declare their will to establish a joint-stock company in the articles of association, the signatures of which are approved by a notary or signed in the presence of the trade registry director or his/her deputy, it gains legal personality with registration in the trade registry. In this process from the establishment of a joint-stock company to the moment it gains legal personality, the existence of a pre-joint-stock company emerges. The legal status and liability of a pre-joint-stock company are controversial in the doctrine.

In this study, the controversial legal nature of the pre-joint stock company structure that emerged during the establishment process of joint stock companies in Turkish law will be examined, and then the actual structure and legal liability of the pre-joint stock company, as well as the duration of the pre-joint stock company and the termination cases will be discussed. Finally, the possible legal regulations that need to be made on this issue in order to clarify the current legal nature of pre-joint stock companies in Turkish law will be evaluated.

Keywords: Turkish Commercial Code, Joint Stock Company, Pre-Joint Stock Company, Ordinary Partnership, Legal Nature, Legal Personality, Establishment, Registration

1. INTRODUCTION

A joint stock company, which is regulated between Articles 329 and 563 of the Turkish Commercial Code No. 6102 (“TCC1”), is deemed to have been established when the founders declare their will to establish a joint stock company in the articles of association, which is drawn up by the law, in which they have unconditionally committed to pay the entire capital, their signatures are notarized or signed in the presence of the trade registry director or his/her deputy2. However, at this stage, the company does not yet have a legal entity. In fact, the first paragraph of Article 335 of the TCC quoted above only explains the establishment phase of joint stock companies, and the phase of gaining legal personality is separated by referring to the first paragraph of Article 355 in the second paragraph of the same Article. At this point, the pre-joint stock company structure, which was introduced as a new regulation by Article 335 of the TCC, is in question. In fact, all commercial companies that are being established have the status of an ordinary partnership before they gain legal personality. However, an exception has been made to this rule for joint stock companies, and the provisions of ordinary partnerships have been excluded, and a stage called pre-partnership has been created, at least until the company gains legal personality, with the signing stage before the notary/trade registry3.

2. THE CONTROVERSIAL LEGAL NATURE OF THE PRE-JOINT STOCK COMPANY

A pre-joint stock company is established by making the articles of association of the planned joint stock company in written form and approving the signatures of all founders by a notary public or by signing the articles of association in the presence of the trade registry director or his/her deputy. The company planned to be established gains legal personality by registering the pre-joint stock company articles of association with the trade registry where the company headquarters is located.

Based on the fact that joint stock companies can gain legal personality through registration in the trade registry, it can be said that the pre-joint stock company, which is accepted to have come into existence at the stage before registration, is a “joint stock company-like” structure that does not have a legal personality and merchant status, and has the authority to carry out certain legal transactions through its organs within the framework of the articles of association, even if they are limited to the works specifically specified in the articles of association or to be carried out due to the nature of the business4.

The legal nature of the pre-joint stock company is not clearly stated in the TCC, but in the justification of Article 335 which states “The article points to the existence of the pre-joint stock company and clarifies the moment of formation of this company. The pre-joint stock company differs from the joint stock company with a legal personality. The mentioned point is emphasized by reserving the first paragraph of Article 355.”, it is emphasized that according to the prevailing view, the pre-joint stock company is not an ordinary company or an association, but a joint ownership (company). Again, the same justification includes the explanation that “The partners (founders) of the pre-joint company do not have the status of merchants, the pre-joint company ends without liquidation with the registration of the company. In a single-person joint stock company, the pre-joint company has the nature of the sole founder’s private property.”

Based on these explanations, it is understood that what the law-maker meant by the dominant view expressed in the justification was German law, and that in fact, with the provision of Article 355 of the TCC, the law-maker wanted to introduce the pre-company institution, which is valid in German law, into our law5.

However, concerning the inadequacy of the current legal regulation on this issue by stating in the justification of Article 335 that “The nature and legal status of the pre-joint-stock company in Turkish law will be clarified in the doctrine and court decisions.” this issue has been left to doctrine and precedents. In this context, no settled jurisprudence has yet been formed, and different views have emerged in the doctrine regarding the legal nature of the pre-joint-stock company.

At this point, the second paragraph of Article 620 of the Turkish Code of Obligations No. 6098 (“TCO6”) comes to the fore. The provision in question states that “If a partnership does not have the distinctive characteristics of partnerships regulated by law, it is deemed to be an ordinary partnership subject to the provisions of this section.” and in light of this article, there are also views that argue that pre-joint stock companies have the characteristics of ordinary partnerships. Indeed, Tekinalp argues that the company stated to have been established in Article 335 of the TCC is not a joint-stock partnership, because a joint-stock partnership has acquired legal personality in accordance with Article 355, and that this company cannot be described as a joint-stock partnership without legal personality, and that the company mentioned in Article 335 of the TCC is an ordinary partnership in accordance with Article 620/2 of the TCO, because according to the said paragraph, a partnership is considered an ordinary partnership if it does not have the distinctive characteristics of partnerships regulated by law7.

The application of the second paragraph of Article 620 of the TCO against Article 335 of the TCC essentially points to a conflict between the pre-company system envisaged in German law and the pre-company system valid in Swiss law. However, as can be understood from the justification of Article 335, since Turkish law refers to the model adopted in German law, it would be appropriate to explain the structure and legal nature of the pre-company, the existence of which is accepted, according to the principles valid in German law.

Moreover, during the period of the old Turkish Commercial Code No. 6762, the provision 620/2 of the TCO was decisive and valid, and in Turkish law, as in Swiss law, the formation that emerged during the process from the approval of the articles of association to registration was considered an ordinary partnership. However, instead of continuing the system of the old Turkish Commercial Code, the legislator felt the need for a new regulation with Article 335 of the TCC and referred to the principle of German law in its justification. When the necessity for this new regulation is taken into consideration, as Pulaşlı also argues, it can be said that the company up until the registration stage was not an ordinary partnership, because the founders aimed to establish a commercial company, not an ordinary partnership, with the joint-stock company agreement they signed8.

3. ACTUAL STRUCTURE OF THE PRE-JOINT STOCK COMPANY

Since the pre-joint stock company in Turkish law is of German law origin, the view adopted in German law regarding the actual structure and formation of the pre-joint stock company should also be accepted in Turkish law practice.

In German law, a pre-joint stock company is an institution with its own assets, rights, and liabilities, like a joint stock company with a legal entity, and has the organs of the company to be established (general assembly and board of directors). Therefore, in Turkish law, it can be said that the pre-joint stock company has the organs of the joint stock company being established, namely the board of directors and the general assembly, as determined by the articles of association. The board of directors or the persons determined as the organs with management and representation authority specified in the articles of association of the joint stock company being established may also conduct transactions with third parties on behalf of the company at this stage9.

4.   RESPONSIBILITY IN PRE-JOINT STOCK COMPANY

The second paragraph of Article 355 of the TCC states “Those who perform transactions and undertake commitments on behalf of the company before registration are personally and severally liable for these transactions and commitments. However, if it is clearly stated that the transactions and commitments are performed on behalf of the company to be established in the future and these commitments are accepted by the company within three months after the company is registered in the trade registry, only the company shall be liable.” and a dual distinction is made regarding the liability in the pre-joint stock company. In this context, the first issue addressed in the aforementioned article is that those who perform transactions and undertake commitments on behalf of the company before the registration of the joint-stock company to be established are personally and severally liable for these transactions and commitments. At this point, for example, if the board of directors delegates the authority to represent the company to third parties, it will be necessary to accept that these persons will also be personally and jointly and severally liable together with the directors who are bodies. In addition, if the company is not established or cannot be established, those who perform transactions during the pre-joint stock company phase and before registration will have unlimited personal and joint liability10.

In fact, in the continuation of the article mentioned above, it is regulated that only the company will be responsible if it is clearly stated that the transactions and commitments in question are made on behalf of the company to be established in the future and if these commitments are accepted by the company after the company is registered in the trade registry. Therefore, if the company is not established for any reason or if the transactions and commitments made by the authorities of the pre-joint stock company are not approved by the authorized bodies of the established joint stock company within the period specified in the article, the unlimited liability of the persons who made the transactions and commitments in question will continue.

The main difference between a pre-joint stock company and an ordinary partnership comes to the fore at this point. Because, in the pre-joint stock company, the provisions of a joint stock company are applied in internal relations. In terms of liability to third parties, the provisions of an ordinary partnership are applied, as emphasized in the second article of Article 355 of the TCC.

5. TERM AND TERMINATION OF THE PRE-JOINT STOCK COMPANY

    As we have previously stated in our article, a joint stock company is established by the founders declaring their will to establish a joint stock company in the articles of association, the signatures of which are approved by a notary or signed in the presence of the relevant trade registry office, and it gains its legal personality by being registered in the trade registry. Since the first paragraph of Article 354 of the TCC states that “The entire articles of association of the company shall be registered with the trade registry of the place where the company’s headquarters is located and announced in the Turkish Trade Registry Gazette within thirty days in joint stock companies to be established with the permission of the Ministry of Customs and Trade following the obtaining of the permission, in other companies following the establishment of the company per the first paragraph of Article 335.”, it can be said that the pre-joint stock company phase between establishment and registration is thirty (30) days as stated in the article.

    On the other hand, the second paragraph of Article 345 of the TCC has concluded that the company cannot acquire legal personality within three (3) months from the date of notary approval or the signing of the articles of association in the presence of the trade registry director or his/her deputy, as stipulated in the first paragraph of Article 335. Therefore, although there are different opinions on this issue, it is possible to say that the pre-joint stock company period can be a maximum of three (3) months.

    Once the company is registered with the trade registry and gains legal personality, the pre-joint stock company will end without liquidation, as explained in the justification of Article 335. At this point, in fact, the registration of the pre-joint stock company with the trade registry is not considered a reason for termination, on the contrary, the registration transforms the pre-joint company, which is considered a joint ownership, into a company with legal personality.

    On the other hand, if the pre-joint stock company is terminated for any reason by the will of the founders, the pre-joint stock company enters the liquidation process and the purpose of the pre-joint stock company continues limited to liquidation until the pre-joint stock company is liquidated and terminated.

    5. CONCLUSION

    The pre-joint stock company model, which has been adopted by all doctrines and high court decisions in German law and included as a new regulation in the TCC, is not an ordinary partnership or association, but rather a joint-stock company with a corporate structure, as explained in the justification of the relevant article. Since the pre-company is granted partial rights and juridical capacity, this company, which has all its organs, is managed by the board of directors and represented to the outside. Thus, a certain internally consistent system has been developed in German law regarding the pre-company. Therefore, the internal relations of the company, representation and responsibility, and the problems arising from these can be easily explained within this system11.

    The equalization obligation, although sometimes perceived as a mechanism allowing the controlling company to evade liability, actually aims to maintain power balances within the corporate group. The effective implementation of this obligation minimizes the financial losses of subsidiary companies and ensures the sustainability of the companies within the group. Ultimately, the compensation of losses resulting from the controlling company’s direction is not merely a legal requirement but should also be considered an ethical necessity within the framework of corporate governance principles. The proper and effective application of the equalization mechanism stipulated in the legislation will ensure both the healthy operation of the corporate group and the preservation of trust in commercial life.

    References

    1. Official Gazette dated 14.02.2011 and numbered 27846 ↩︎
    2. TCC Article 335/1 ↩︎
    3. Tamer Bozkurt, Şirketler Hukuku, Issue 11, Ankara 2020, p. 229 ↩︎
    4. Ömer Adil Atasoy, Berkay Ergün, Türk Hukukunda Ön Anonim Şirket, Law Faculty Journal, Year 3, Issue 2, December 2017, p. 7 ↩︎
    5. Emrullah Kervankıran, Ön Şirket ve Hukuki Niteliği, p. 366 (https://dergipark.org.tr/tr/) ↩︎
    6. Official Gazette dated 04.02.2011 and numbered 27836 ↩︎
    7. Ünal Tekinalp, Yeni Anonim ve Limited Ortaklıklar Hukuku ile Tek Kişi Ortaklığının Esasları, Issue 2, İstanbul 2012, Nr. 10-26, 10-27 ↩︎
    8. Hasan Pulaşlı, Yeni Türk Ticaret Kanununa Göre Tek Ortaklı Sermaye Şirketleri ve Buna İlişkin Bazı Özel Durumlar, Regesta Journal, 1 Issue, November 2011, p.14 (https://www.ito.org.tr/tr) ↩︎
    9. Ömer Adil Atasoy, Berkay Ergün, p. 9 ↩︎
    10. Ömer Adil Atasoy, Berkay Ergün, p. 10 ↩︎
    11. Emrullah Kervankıran, p. 366 ↩︎

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    CORPORATE GROUPS AND THE CONTROLLING COMPANY’S EQUALIZATION OBLIGATION

    ABSTRACT

    This article examines the equalization obligation of the controlling company within the framework of the concept of corporate groups. Article 195 and subsequent articles of the Turkish Commercial Code regulate the relationship between the controlling and subsidiary companies. The article analyzes the liabilities that may arise in cases of unlawful use of control and the equalization mechanism designed to eliminate such liabilities.

    Keywords: Corporate Groups, Joint Stock Company, Controlling Company, Subsidiary Company, Equalization Obligation, Liability, Turkish Commercial Code

    1. INTRODUCTION

    Corporate group is a structure formed when one company establishes direct or indirect control over other companies. With the enactment of the Turkish Commercial Code numbered 6102 (“TCC”)1, the effects of the controlling company on subsidiary companies and the limits of such influence have been legally defined. The relationships within a corporate group are significant not only from an economic or managerial perspective but also in terms of legal responsibilities.

    In this context, the question arises as to how the losses resulting from the controlling company’s actions that violate the interests of the subsidiary company will be compensated. TCC provides an equalization mechanism to ensure that losses incurred by subsidiary companies due to the controlling company’s actions are remedied.

    This study explains the equalization obligation of the controlling company over the subsidiary companies within the framework of the corporate group concept, examines the relevant legislative provisions, and presents legal evaluations on the subject.

    2. CORPORATE GROUPS

    A corporate group refers to a structure formed when one or more companies are linked to a controlling company either directly or indirectly through legal control criteria or a contractual arrangement2. This concept was not regulated under the former Turkish Commercial Code numbered 6762 but has been introduced for the first time under the new TCC in articles 195 to 209.

    While in some cases the existence of a corporate group is definitively recognized under the TCC, in others, it is identified as a presumption.

    (i) Controlling Company and Subsidiary Company

    According to Article 195 of the TCC, a) A commercial company is considered a controlling company if it directly or indirectly; i) holds the majority of voting rights in another commercial company; or ii) has the right to elect a majority of the members of the management body pursuant to the company’s articles of association; or iii) possesses, along with its own voting rights, the majority of voting rights alone or jointly with other shareholders or partners based on an agreement; b) A commercial company that maintains control over another commercial company under a contract or by other means is also considered a controlling company, with the latter being its subsidiary company. If at least one of these companies has its registered office in Türkiye, the provisions of the TCC concerning corporate groups shall apply3.

    A significant issue in the context of the corporate group concept is whether the defining element in the definition is “dominance and centralized management” or merely “control”. The reasoning of Article 195 of the TCC explains this notion as follows: “Control is a mathematically precise and therefore definitive criterion. Dominance, on the other hand, draws conclusions associated with legal presumptions. The instruments of control include capital majority, voting majority, and the majority of members in the management body. Under the control system, the actual exercise of dominance is not assessed; moreover, no legal consequences arise from proving that dominance is not exercised. The fundamental principle of this system is: Whoever holds control is presumed to be exercising dominance as well. In contrast, in a system based on dominance and centralized management, the mere presence of dominance is insufficient to conclude that it is being exercised; actual implementation of dominance must be evident and (if needed) proven.”

    As clearly stated in the first paragraph of Article 195 of the TCC, the “control” system is the basis, with only a presumption being accepted in the second paragraph. If reliance is placed on this presumption, the party challenging it bears the burden of proof.

    (ii) Presumption of Control

    The fact that a commercial company holds the majority of shares in another commercial company or possesses enough shares to make managerial decisions constitutes a presumption of the existence of a controlling company4. The ability to make management decisions, particularly in large-capital joint stock companies (especially publicly traded companies), arises when voting rights held at the general assembly allow a shareholder to form a majority despite not achieving the shareholding majority explicitly required under the TCC. Consequently, a shareholder who has not obtained majority shareholding in the company may still acquire control through the general assembly by utilizing the power vacuum resulting from dispersed shareholding5. The majority in the management body and privileged voting rights may completely neutralize capital majority. Therefore, the presumption in this context is not an irrebuttable legal assumption but one that can always be refuted.

    (iii) Indirect Control

    Indirect control occurs when a controlling company establishes control over another company through one or more subsidiary companies6. In this case, the controlling company can exercise control over other companies through the subsidiary company under its control.

    For instance, if Company A holds 60% of the shares and voting rights in Company B, and Company B, while holding only 10% of the shares in Company C, has the privilege to elect a number of board members sufficient to form a majority in Company C’s governing body, then Company A and Company B have a controlling company – subsidiary company relationship. Consequently, Company A, despite not being a shareholder in Company C, attains an indirect controlling position over Company C.

    (iv) Mutual Participation

    Companies that hold at least one-fourth of each other’s shares are considered to be in a mutual participation relationship. If one company is controlling the other, the latter is also regarded as a subsidiary company. If both companies control each other, they are both considered controlling and subsidiary companies7. The regulation introduced in the TCC aims to prevent misleading perceptions caused by mutual participation, avoid capital dilution (bubble capital)8, and eliminate concerns regarding the accuracy of balance sheets. If the shareholding ratio between companies remains below 25%, no legal mutual participation is deemed to exist. Another limitation imposed on mutual participation is the freezing of rights. A corporation that knowingly acquires shares of another corporation, thereby establishing a mutual participation status, may only exercise one-fourth of the total voting rights and other shareholder rights arising from those shares. Except for the right to acquire bonus shares, all other shareholder rights are frozen. Such shares are not considered in the calculation of quorum for meetings and decisions9. However, this limitation does not apply if the subsidiary company acquires shares of the controlling company or if both companies are controlling each other.

    3. LIABILITY

    Dominance does not grant the controlling company the right to unlawfully exercise this power over subsidiary companies. As with any unlawful use, there are legal consequences attached to such misconduct. The TCC does not provide a limited list of instances where control is exercised unlawfully. Accordingly:

    1. Certain legal transactions imposed by the controlling company on the subsidiary company (such as transfer of business, assets, profits, receivables, and liabilities) and material actions (such as failing to renew facilities without a justified reason, restricting or halting investments, making decisions or taking measures that negatively affect efficiency or operations, or refraining from taking measures that would promote development) and
    2. Transactions carried out through the exercise of control, which lack a clearly justifiable reason from the perspective of the subsidiary company (such as mergers, demergers, conversions, issuance of securities and significant amendments to the articles of association10) are also covered under this framework.

    Any transaction stipulated under the relevant articles of the TCC, such as providing guarantees, transferring receivables or liabilities, mergers, and demergers, is not inherently unlawful. The unlawfulness arises from the manner in which control is exercised and implemented. Unlawfulness arises from a transaction, decision, or measure that is either implemented or deliberately avoided by the controlling company, leading to losses for the subsidiary company, causing harm to shareholders and creditors, and lacking a justified reason from the company’s standpoint11.


    4.   LIABILITY OF THE CONTROLLING COMPANY FOR THE LOSS OF THE SUBSIDIRARY COMPANY AND THE RIGHT OF ACTION OF THE SUBSIDIARY COMPANY’S SHAREHOLDER

    Article 202/1 of the TCC regulates how equalization shall be provided for the losses incurred by a subsidiary company as a result of the transactions carried out by the controlling company, as specified in the relevant provision. Meanwhile, Article 202/2 grants the subsidiary company’s shareholders the right to file a lawsuit for compensation of damages or for the repurchase of their shares in cases where significant transactions are carried out through the exercise of control without a clearly justifiable reason from the subsidiary company’s perspective.

    Article 202/1 of the TCC stipulates that the controlling company may not exercise its control in a manner that causes losses to the subsidiary company. However, the provision does not explicitly define the scope of the term “loss”. At this point, reference should be made to the reasoning of the article, which provides the following explanation regarding the concept of “loss”: “It is broader than, and encompasses, “damage” as defined in the law of obligations. Loss may arise in the form of a decrease in assets or the prevention of asset growth, as well as through the loss of opportunity or the ability to successfully carry out a business activity, as in the case of the transfer of business, funds, or personnel.”

    Since business activities, by their nature, may involve risky decisions and potential losses that may be unavoidable even with the utmost care, expecting subsidiary companies to never suffer a loss under any circumstances would contradict the natural course of commerce and, consequently, life12. If the listed transactions and actions do not arise from a dominance relationship but instead result from prudent commercial conduct, this provision cannot be applied. If the loss occurs without a violation of the controlling entity’s duty of care and is based on a decision, legal transaction, or material act that the subsidiary company’s own management body or an independent decision could have undertaken, it does not fall within the scope of equalization13.

    For the controlling entity to be held liable for the loss suffered by the subsidiary company, such loss must have directly resulted from the intervention of the controlling entity. Without clear direction demonstrating the exercise of dominance, the controlling entity cannot be held responsible solely due to the economic conditions or commercial risks faced by the company. In this context, the liability of the controlling entity depends on the existence of an influence that directly led to the loss incurred by the subsidiary company. Such influence may take the form of written or verbal instructions, direct or indirect intervention in decision-making processes, the exercise of voting rights, exertion of pressure, or actual control through other means.

    If the subsidiary company acts under the direction of the controlling entity and would not have made such decisions otherwise, the resulting losses do not automatically establish liability for the controlling entity. Various mechanisms allow the controlling entity to avoid such liability. According to TCC Article 202/1-a, in order to prevent liability from arising, the relevant losses must “either be effectively equalized within the same financial year or the subsidiary company must be granted a legally enforceable claim of equivalent value, specifying how and when equalization will be carried out, no later than the end of that financial year.”. Although these mechanisms might suggest that the controlling entity could cause losses to subsidiary companies as long as it compensates them, it is crucial to remember that the purpose of the equalization mechanism is to balance the interests of the parties14.

    Equalization may involve granting the subsidiary company a benefit or advantage to offset the loss. For instance, it may take the form of providing guarantees or sureties, securing guarantees through counter-guarantees or endorsements, granting licenses and trademark usage rights, offering research and development services free of charge, providing know-how, facilitating internships and training for personnel, allowing access to a marketing network, transferring an equivalent real estate asset, granting preemptive rights in a capital increase ensuring that the company suffering the loss is designated as a beneficiary in a conditional capital increase. Equalization may be performed within the financial year in which the loss occurs, or a legally enforceable claim may be provided within that year specifying when and how equalization will take place. However, it is preferable to ensure that the right to claim equalization is not delayed for an extended period, which would undermine its expected benefit, and that mechanisms are in place for the subsidiary company to exercise its right effectively15.

    If the controlling company causes losses to the subsidiary company but does not actually equalize for them within the financial year or does not grant a legally enforceable claim within the required period, each shareholder of the subsidiary company is entitled to demand equalization for the company’s loss from the controlling company and its board members responsible for the loss. In the event of the subsidiary company’s insolvency, its creditors are also entitled to make such claims. Moreover, in cases where control is exercised and the transaction lacks a clearly justifiable reason from the perspective of the subsidiary company, such as mergers, demergers, conversions, dissolution, the issuance of securities, or significant amendments to the articles of association, shareholders who cast a dissenting vote in the general assembly and ensure their objection is recorded in the minutes, or those who submit a written objection to similar board decisions, have the right to demand compensation for their losses from the controlling entity. Alternatively, they may request that their shares be purchased at a value no less than their stock exchange price, or if no such price exists, or if it does not reflect fair value, at a price determined based on generally accepted valuation methods16

    5. CONCLUSION

    The influence of controlling companies over subsidiary companies has significant legal consequences. The TCC regulates the equalization mechanism to protect the interests of subsidiary companies against losses arising from the controlling company’s influence.

    The equalization obligation, although sometimes perceived as a mechanism allowing the controlling company to evade liability, actually aims to maintain power balances within the corporate group. The effective implementation of this obligation minimizes the financial losses of subsidiary companies and ensures the sustainability of the companies within the group. Ultimately, the compensation of losses resulting from the controlling company’s direction is not merely a legal requirement but should also be considered an ethical necessity within the framework of corporate governance principles. The proper and effective application of the equalization mechanism stipulated in the legislation will ensure both the healthy operation of the corporate group and the preservation of trust in commercial life.

    References

    1. The Official Gazette (“OG”) dated 14.02.2011 and numbered 27846 ↩︎
    2. Hasan Pulaşlı, “Türk Ticaret Kanunu Tasarısına Göre Şirketler Topluluğunun Temel Nitelikleri ve Hâkim Şirketin Güven Sorumluluğu”, Gazi University Law Faculty Magazine E. XI, P.12, Y. 2007, p. 262. ↩︎
    3. Turkish Commercial Code (TCC) Article 195 ↩︎
    4. TTC Article 195/2 ↩︎
    5. Gül Okutan Nilsson, Türk Ticaret Kanunu Tasarısı’na Göre Şirketler Topluluğu Hukuku, İstanbul 2009, p.133. (Şirketler Topluluğu) ↩︎
    6. TTC Article 195/3 ↩︎
    7. TTC Article 197 ↩︎
    8. Capital dilution is a process that leads to the reduction of existing shareholders’ rights over the company, particularly their voting and dividend rights. This typically occurs through methods such as increasing the company’s capital via the issuance of new shares, issuing shares at a low value, or disproportionate distribution of shares among existing shareholders through capital increases from internal resources. From the perspective of the TCC, provisions under TCC Article 461 and subsequent articles aim to prevent dilution by protecting shareholders’ preemptive rights. However, dilution may still occur if existing shareholders do not exercise their preemptive rights during a capital increase or if transactions favoring certain groups result in the violation of these rights. ↩︎
    9. TTC Article 201 ↩︎
    10. TTC Article 202 ↩︎
    11. Reasoning of Article 202 of TCC. ↩︎
    12. Sevda Bora Çınar, “Şirketler Topluluğunda Hâkim Teşebbüs”, İzmir Bar Association Magazine, 2023, p. 123. (https://www.izmirbarosu.org.tr/pdfdosya/sirketler-toplu2023912174126784) ↩︎
    13. Gül Okutan Nilsson, Şirketler Topluluğu, p. 230 ↩︎
    14. Gül Okutan Nilsson, Şirketler Topluluğu, s. 237. ↩︎
    15. Reasoning of Article 202 of TCC. ↩︎
    16. TCC Article 202 ↩︎

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    PLEDGE OF JOINT STOCK COMPANY SHARES: LEGAL FRAMEWORK AND IMPLEMENTATION PROCESSES

    ABSTRACT

    Joint stock companies constitute one of the fundamental building blocks of capital markets within the dynamic structure of commercial life. The shareholding structure of these companies serves not only as a means of representing ownership but also as an important tool in securing economic relations. Particularly, the fact that joint stock company shares hold material value and can be easily transferred has led to their widespread use as collateral in legal transactions. The pledge of shares has found a broad application area in commercial life as an effective method used by creditors to secure their claims in debt relations.

    Although the Turkish Commercial Code numbered 61021  (“TCC“) does not contain specific provisions regarding the pledge of joint stock company shares, the general pledge provisions set forth in the Turkish Civil Code numbered 47212 (“Civil Code“) establish the fundamental principles of these transactions. Whether the shares are certified or not directly affects the scope of the rights subject to the pledge and the procedure for establishing the pledge. This study will explain the concept of pledge and comprehensively examine the procedures for establishing a right of pledge over joint stock company share.

    Keywords: Joint Stock Company, Pledge of Share, Right of Pledge, Bearer Share Certificate, Registered Share Certificate, Certificated Share, Uncertificated Share

    I. INTRODUCTION

    In line with the developments in the commercial world, there has been a significant increase in the number of company establishments. Accordingly, as the importance of joint stock companies in commercial life grows, their shares inevitably become more frequently involved in legal transactions. The fact that joint stock company shares hold material value and are transferable has led to their frequent use in collateral transactions. The ability of shareholders to pledge their shares in a joint stock company to meet their financial needs demonstrates that pledge of share is a significant financing instrument.

    II. THE CONCEPT OF PLEDGE

    Pledge is a limited real right that authorizes the creditor to collect its receivables by converting the pledged value into cash in the event of non-performance, partial or poor performance by the debtor3. Although the pledge of shares in joint stock companies is not specifically regulated under the TCC, it is carried out in accordance with the general rules on pledge stipulated in the Civil Code.

    Under the Civil Code, the right of pledge is categorized into two main types: real estate (immovable) pledge and personal property (movable) pledge. Since joint stock company shares represent shareholding rights, whether they are embodied in certificates or not, the right of pledge established on shares is considered a pledge over rights. In this respect, the pledge established on the share is in the nature of a pledge established on the right and is subject to the principles regarding the movable pledge4. According to the Civil Code, in addition to tangible assets, receivables and rights that are not classified as tangible assets are also included within the scope of movable pledge types. Accordingly, the pledge established over joint stock company shares is regarded as a pledge on rights arising from shareholding and is subject to the provisions of “pledge on receivables and other rights” set forth in Articles 954 and following of the Civil Code.

    Although it is stated that the pledgee will establish a pledge over rights arising from shareholding, this does not apply to all shareholding rights. For instance, rights that cannot be converted into cash, such as participation in management (attendance at the general assembly, voting rights), protective shareholder rights (litigation rights, minority rights), and informational rights (right to access information, right to examine and audit), cannot be subject to pledge. Only rights related to assets that can be converted into cash (dividend rights, liquidation proceeds) fall within the scope of the pledge. Moreover, in the event that a pledge is established on a share, there will be no change in the shareholding status of the pledgor.

    III. ESTABLISHMENT OF RIGHT OF PLEDGE ON JOINT STOCK COMPANY SHARES

    The procedures for establishing a right of pledge over joint stock company shares vary depending on whether the shares are embodied in certificates and the type of share certificates. Additionally, in order to establish the right of pledge, the act of disposal must be performed following the realization of the promissory transaction.

    A pledge agreement is defined as a legal transaction in which a person undertakes the obligation to establish a pledge on a joint stock company share in favor of a creditor5. The written form is a validity requirement for the pledge agreement6, which is executed between the pledgor, who provides the share as collateral, and the creditor, who seeks to secure their claim7. The pledge agreement regarding certificated joint stock company shares corresponds to a promissory transaction, while the pledge agreement regarding uncertificated shares constitutes an act of disposal. The pledgor may be the debtor of the secured obligation or a third party. However, due to the accessory nature of the right of pledge, the pledgee can only be the creditor of the obligation secured by the pledge.

    A. Establishment of Right of Pledge on Uncertificated Shares

    According to the Civil Code, assignable receivables and other rights may be pledged. Unless otherwise provided, the provisions regarding pledge requiring delivery apply to such pledges8. Accordingly, the pledge of the economic rights granted by uncertificated shares in joint stock companies is possible9. As stated in Article 954 of the Civil Code, a written pledge agreement must be executed for the establishment of a right of pledge on an uncertificated share. This pledge agreement, unlike the promissory transaction, constitutes an act of disposal. Upon the execution of the written pledge agreement between the pledgor and the creditor, the right of pledge is established on the company share10.

    According to capital market legislation, dematerialization refers to the electronic registration of capital market instruments instead of issuing physical certificates. Dematerialized shares are also considered uncertificated shares. Pursuant to Article 47 of the Capital Markets Law numbered 636211, collateral agreements concerning capital market instruments registered with the Central Securities Depository (“CSD“) are executed in writing12. These agreements constitute an act of disposal, and the right of pledge is established upon their execution by the parties. Additionally, for the right of pledge on dematerialized shares to be enforceable against third parties, it must be reported to the CSD.

    B. Establishment of Right of Pledge on Certificated Shares

    Share certificates may be bearer or registered13 and are classified as negotiable instruments. In establishing a right of pledge on a share certificate, the provisions of the Civil Code regulating the pledge of negotiable instruments apply.

    The pledge of bearer share certificates is affected by endorsing the certificate with a “for pledge” annotation and delivering it to the creditor14. The transfer of possession to the creditor is mandatory for the establishment of the right of pledge.

    In the pledge of registered share certificates, a written pledge agreement must be executed between the parties and/or a pledge endorsement must be made on the registered certificates, followed by the delivery of these certificates15.

    V. CONCLUSION

    The establishment of a right of pledge on joint stock company shares serves as an important instrument in commercial law, providing financial flexibility for shareholders and a reliable security mechanism for creditors. This study has examined the legal framework concerning pledge of share transactions, addressing the procedural differences based on whether the shares are certificated and the type of share certificates.

    Turkish law allows for the application of pledge transactions on joint stock company shares within the general pledge regulations under the Civil Code. While a written pledge agreement is crucial for uncertificated shares and notification to the CSD is necessary for dematerialized shares, for certificated shares, the endorsement and delivery process take precedence. Compliance with formal requirements,the transfer of possession, and the alignment of the parties’ intentions are essential for the validity of these transactions.

    While pledge of share allows shareholders to pledge their shares as collateral to meet their financial needs, they also offering creditors a reliable security measure. This contributes to the vitality of capital markets and strengthens commercial relations. However, understanding the legal nature and procedural requirements of pledge transactions is of great importance for both shareholders and creditors.

    In conclusion, the pledge of joint stock company shares stands out as an indispensable legal tool for both investors and financial institutions. This mechanism enhances financial mobility for shareholders while providing a reliable security measure for creditors, ensuring compatibility with the dynamic structure of commercial life.

    References

    1. Official Gazette dated 14.02.2011 numbered 27846 ↩︎
    2. Official Gazette dated 21.11.2001 numbered 24607 ↩︎
    3. Capital Markets Board, Türk Hukukunda Anonim Şirket Hisse Senetlerinin Rehni Yönetici Özeti, p. 1 ↩︎
    4. Prof. Dr. Mehmet Serkan ERGÜNE, Anonim Şirket Payı Üzerinde Rehin Hakkı Kurulması, 2016, Vol. LXXIV, E.2, p. 741 ↩︎
    5. ERGÜNE, p. 742 ↩︎
    6. Turkish Civil Code (Civil Code), a.955 ↩︎
    7. ERGÜNE, p. 743 ↩︎
    8. Turkish Civil Code (Civil Code), a.954 ↩︎
    9. Prof. Dr. Hasan PULAŞLI, Şirketler Hukuku Şerhi Volume III, 2022, p. 2417 ↩︎
    10. ERGÜNE, p. 745 ↩︎
    11. Official Gazette dated 30.12.2012 and numbered 28513 ↩︎
    12. Capital Markets Law, Article 47/1 ↩︎
    13. Turkish Commercial Code (TCC), Article 484 ↩︎
    14. PULAŞLI, p. 2429 ↩︎
    15. Av. Dr. Umut KOLCUOĞLU, Anonim Şirketler Pay Rehni Kurulması İşlemleri, Nasıl Bir Ekonomi Gazetesi, December 2023 ↩︎

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    IPO AND BORSA ISTANBUL LISTING OF ARTEMİS HALI A.Ş.

    We are honored to have assisted Artemis Halı A.Ş. in its initial public offering and listing on Borsa İstanbul.

    Artemis Halı shares started trading on Borsa Istanbul on 04.03.2024 with an unfiltered demand of TRY 116,554,321 nominal value equivalent to approximately TRY 3,000,000,000 billion, which is 5.8 times the total size of the public offering.

    SSI Legal team included Founding Partners Çiğdem Bal Ilgın and Av. Muhammed Kerem Şenol, LL.M. and Managing Senior Associate Taceddin Külekci. We extend our gratitude to all stakeholders involved in this process and wish for continued success in this new era initiated by this IPO.

    You can access our Linkedin post here.

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    IPO AND BORSA ISTANBUL LISTING OF OBA MAKARNACILIK SANAYİ VE TİCARET A.Ş.

    We are honored to have assisted Oba Makarnacılık Sanayi ve Ticaret A.Ş. in its initial public offering and listing on Borsa İstanbul.

    Oba Makarnacılık shares started trading in Borsa İstanbul on 01.03.2024 with a demand reaching 1.7 times the total offer in domestic individual investors, 8.6 times the total offer in domestic institutional investors, 3.4 times the total offer in cross-border institutional investors and 1.2 times the total offer in group employees amounting to a total size of TRY 3,780,238,178.

    You can access our Linkedin post here.

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