On 29 May 2024, significant amendments to the Commercial Code were published in the Turkish Official Gazette, particularly affecting company law. These modifications aim to facilitate business operations and eliminate existing uncertainties. Here is an overview of the most important updates:

New Minimum Share Capital Requirements

One of the most significant amendments concerns the minimum capital requirements for companies. Joint-stock companies and limited liability companies must adjust their capital to the new minimum amounts by 31 December 2026. Otherwise, they will be considered dissolved and must initiate the liquidation process as well as remove their entries from the commercial register.

In November 2023, the minimum capital amounts were already increased by a presidential decree: from 50,000 TRY to 250,000 TRY for joint-stock companies, from 100,000 TRY to 500,000 TRY for non-public joint-stock companies that accept the registered capital system , and from 10,000 TRY to 50,000 TRY for limited liability companies. The amendment law has now clarified that existing companies must  increase their capital accordingly until the end of 2026. The Ministry of Trade has the authority to extend this deadline by up to two years.

Changes to the Election of the Board of Directors

Another important amendment concerns the election of the board of directors in joint-stock companies. Previously, the chairman and deputy chairman of the board of directors had to be re-elected annually. This requirement has now been abolished. In the future, the chairman and deputy chairman may be elected for the entire term of office of the board of directors, which strengthens continuity in corporate governance.

Appointment of Branch Managers

The authority to appoint and dismiss branch managers has been removed from the non-transferable duties of the board of directors. This amendment is intended to increase flexibility and efficiency in the company's management by enabling these decisions to be delegated to other management levels.

Convening Board Meetings

The regulation for convening board meetings is also new. If the majority of the board members request a meeting, the chairman must convene it within 30 days. If the chairman fails to do so or is unavailable, the members have the right to call the meeting themselves. This amendment intends to enable timely and important decision-making. In this way, it should also contribute to creating a collaborative negotiating environment within the governing bodies of joint-stock companies.

Conclusion

These amendments to the Turkish Commercial Code aim to strengthen corporate capital structures and enhance economic stability. Companies are well advised to familiarise themselves with the new regulations at an early stage and make the necessary adjustments to avoid legal problems.

The relevant announcements in the Official Gazette (Resmi Gazete) can be accessed via the link below:

29 Mayıs 2024 ÇARŞAMBA (resmigazete.gov.tr)

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