New Turkish Commercial Code - PwC

1 Turkish Commercial CodeA blueprint for the futureContentsA Future Unique to a Civilised Society 2 Competition in a World without Boundaries 4 Effective Date of New Turkish Commercial code 6I. Common Concepts related to Corporate Law 7A. Corporate governance 9B. Web site, information society services and access rights of capital stock companies 10C. Single-shareholder joint stock company (A..) and single-member limited liability company (L..) 10D. Group of companies 12E. Structural changes in companies 15F. Reforms for Commercial books in conformity with Turkish Accounting Standards (identical to IFRS) 20G. Audit in equity capital companies 23H. The new regulation to enable payments for supply of goods and services on time and the consequences of late payments 28II.

2 Joint Stock company 31A. Establishment of an A.. 33B. Closed A.., publicly held A.. and publicly traded A.. 34C. Capital and shares in an A.. 35D. A.. acquisition of its own shares or acceptance thereof as pledge 37E. Board of Directors ( BoD ) 39F. General Assembly (GA) 43G. Capital increase 44H. Liability 46I. Termination and liquidation 50 III. Limited Liability Companies 51A. Main features of new limited liability company structure 53B. Incorporation and legal status of L.. 55C. Strengthening of economic structure of company , its financial position 55IV. Secondary Regulations 57 Related Articles 61A. Related articles of Turkish Commercial code No. 6102 63B. code on effectiveness and enforcement of Turkish Commercial code Law No.

3 6103 137 New Turkish Commercial code A blueprint for the future2 PwCThis handbook aims to illustrate the modern evolution, important innovations, and reformist approaches of the new Turkish Commercial code ( New Law ), and to provide details of the law by which Turkish Commercial , financial and capital markets will be bound. There is no single, identical future for every individual or every society. Each country defines its own future. Turkey needs to choose its own path to a modern and socially aware future. If we choose wisely we can raise both our country s profile and our people s spirits. In order to do this, you have to pay a price, but the price is far less than that paid by a society that fails to keep pace with the realities of the new understanding of commerce.

4 The New Law regulates Commercial enterprises, Commercial companies, negotiable instruments, transportation operations, maritime law and insurance contracts. Based on the Commercial law understanding handed down from the 1926 and 1956 Commercial codes, the New Law aims to radically change the future of Commercial law. The New Law doesn t just integrate Turkish Commercial law with European Union law or create an infrastructure based on Basel II, transparency and an information society; it simultaneously Prof. Dr. nal TekinalpChairman Draft Turkish Commercial code CommissionA Future Unique to a Civilised SocietyNew Turkish Commercial code - A blueprint for the future 3 puts into effect generally accepted financial reporting and auditing principles and paves the way for democracy among shareholders and the use of information technology tools.

5 The goals of the New Law are to establish and sustain a system of commerce, industry and service supply at a consistently high level; to provide justice; to protect society and safeguard its ethical values, and to focus on modern traders and companies, investors, transporters, the insured and small and medium-sized enterprises (SMEs) all areas in which competitive enterprises shape our economic environment and where the language of international markets is of corporate governance have moved beyond publicly traded companies and have become management best practices, with consequences for all private and public operations. The principles also provide an effective codex for internal and external audit.

6 All this is acknowledged in the New Law and highlighted in this would like to acknowledge the contributions of Bige Tekinalp, who prepared this book for publication with great care. She listened to lectures I gave at more than 100 seminars, panels and meetings, examined their texts, provided commentary on the law and has ensured that this book includes all of the New Law s underlying principles, critical points and new would also like to thank PwC Turkey. By publishing the New Law s articles on Commercial enterprises and capital stock companies in their final accepted form, PwC has help introduce the public to the law in all its richness. This publication allows the goals and purposes of the Draft Turkish Commercial code Commission to be explained to non-governmental organisations and relevant stakeholders in the New Law.

7 This publication has allowed the Commission to reach the organisations and corporations with which we discussed the New Law, and it has enabled us to bring the New Law, the fruit of a collective endeavour, to the target PwCA new world balance is emerging, one in which boundaries have been removed by the global economy and international commerce. By 2050 the size and roles of national economies in the global economy will have changed dramatically. The extent to which Turkey can to make the best use of the opportunities ahead will largely determine how much influence it obtains in the economic and global arena of the future. In an era of change, the new Turkish Commercial code ( New Law ) will leave its mark on Commercial life in Turkey.

8 It truly is a blueprint for the future. The New Law was prepared after a painstaking five-year study by the Preparatory Commission for the Draft Turkish Commercial code , under the chairmanship of Prof. Dr. nal Tekinalp. In addition to the opinions and viewpoints of academics, professional organisations and nongovernmental organisations received during the preparation period, the opinions of leading Turkish companies were sought before the draft was presented to the Turkish Parliament. During its development, the New Law received support from all political circles, trade unions, non-governmental organisations and professional unions; its enactment was the product of unprecedented social and political in a World without BoundariesCansen Ba aran Symes Territory Senior Partner, PwC TurkeyNew Turkish Commercial code - A blueprint for the future 5 In the wake of the recent downturn, the global economy is settling at a new balance point.

9 For nations and companies to enhance their competitive strength, their rules must be compatible with global standards. Global competition has put added emphasis on corporate growth and development potential, corporate governance, public confidence, high-quality financial information and New Law redefines the rules governing Commercial life in Turkey, with a modern approach that will help take Turkey to the next level in terms of transparency, auditability and reliability. Turkish business life continues to evolve rapidly, and its adoption of more transparent principles of corporate governance will increase the global competitive strength of Turkish New Law makes Turkish trade legislation compatible with the EU acquis communautaire the legislation that candidate countries must adopt to become EU members removing a major obstacle to Turkey s accession to the EU.

10 The more quickly the New Law takes force, the sooner the desired benefits can be obtained. The implementation of supporting regulations for the code of Obligations and the New Law are essential. Turkey still has much to do and no time to waste. It is time for Turkey to become creative and move forward. The New Law creates an environment for all these developments. Objections to the law should not be blown out of proportion or allowed to further delay its effective date. All parties will certainly benefit from transparency and auditability. We believe the ethical and transparent structures the New Law introduces will help Commercial life to thrive and will accelerate Turkey s development.