The “Law on the Amendments to Certain Legislation for the Improvement of the Investment Environment numbered 7099" (the "Law") has been published in the Official Gazette dated 10 March 2018. The Law introduced important amendments regarding fifteen laws, especially regarding the Turkish Commercial Code ("TCC") and the Law on Movable Pledge in Commercial Transactions ("Law on Pledge of Movables").

The amendments to the TCC essentially aim to facilitate establishment proceedings of companies by introducing opportunities for conducting certain transactions before trade registries instead of notaries.

The requirement of notary public approval for the signature declarations to be provided by authorized signatories of the companies has been abolished. Accordingly, first opening approval of commercial books of the companies during incorporation shall be conducted by the trade registries, and conducting such a transaction before public notaries has also been abolished. The Law also states that, in case the commercial books are kept electronically, the opening approval of the notary or trade registry offices for commercial books or closing approval of the notary or trade registry offices for the general journal and board of directors’ resolution book shall not be required. Again, the requirement of notarial approval for articles of association has also been abolished and the execution of such articles of association before the trade registries has been introduced. In addition, the requirement concerning blockage of one fourth of the subscribed capital has been abolished for incorporations of limited liability companies.

The provisions regulating the right of pledge on the merged and interfered assets have also been abrogated. With the regulations brought by the Law, it is aimed for all movable properties and rights owned by small and medium enterprises ("SMEs") to be pledgeable as of the effective date of the Law. All future interests and legal revenues such as insurance, natural or substitute goods of the pledged movable property shall be included in the scope of the pledge together with the movable property. In addition to this, in case a production process is pledged along with the movable assets used in the production, the pledge shall be deemed to be established automatically in the same amount and same order on the receivable occurring during and at the end of the production process.

This amendment enters into force as of 15 March 2018. 

Dr Gökce Uzar Schüller, Lawyer
Frankfurt and Istanbul