JOINT STOCK COMPANY
A joint stock company is a type of company established to operate a commercial enterprise under a trade name. Its capital is defined and divided into shares. It is liable for its debts solely with its assets. TTK.329
Shareholders are liable only to the company for their subscribed capital. (TTK.329/2)
A joint stock company is established in two ways: instantaneous and gradual. An “immediate establishment” is when the founding partners initially undertake to pay the entire partnership capital, while a “gradual establishment” is when the founding partners undertake to pay a portion of the partnership capital and then apply to the public for the remaining portion.
* It has a wide range of activities, being able to engage in all types of economic and commercial activities. However, this activity must be specified in the company’s articles of association.
* It can be established by individuals or legal entities, or by individuals and legal entities.
* A minimum of five individuals or legal entities are required to establish a joint stock company. * The capital, fully subscribed in the articles of association, cannot be less than 50,000 TL. In non-public joint stock companies that have adopted the registered capital system, which specifies the authority granted to the board of directors in capital increases, the initial capital cannot be less than 100,000 TL.
* The capital of a joint stock company is divided into shares of equal value. Shares of a joint stock company can be issued as securities with the capacity to be circulated. Shares of a joint stock company can be issued as registered or bearer shares.
* In joint stock companies, decisions are taken by majority vote unless a different voting ratio is stipulated. However, the Turkish Commercial Code also includes aggravated ratios in some cases.
* In joint stock companies, the body responsible for representing and binding the company is the Board of Directors. The Board of Directors consists of at least three members.
The law defines a joint-stock company as “a company with a defined capital, divided into shares, and liable only for its assets for its debts.” It stipulates that shareholders are liable only for the capital they have subscribed and to the company (New TCC Article 329).
The existence of one or more founders is sufficient for the establishment of a joint-stock company under the TCC (New TCC Article 338).
Shares in joint-stock companies are easily transferred. They change hands as securities. Shares acquired in exchange for capital contributed in kind (goods, goods) at the time of establishment cannot be sold for two years. Because joint-stock companies issue shares, shareholders are not taxed for the increase in value if they sell their shares after two years from acquisition.
Joint-stock companies are subject to corporate tax. The company is the addressee of the tax.
The right to issue shares and bonds is granted only to joint-stock companies.
Joint-stock companies have legal personality. Legal personality is achieved through registration in the Trade Registry.
A joint-stock company’s liability for its debts is limited to its assets.
A joint-stock company can be represented by shares, with its capital divided into shares. Bearer shares cannot be issued unless the company’s capital is fully paid.
A single person can be a member of the board of directors, or an externally appointed person can be elected to the board.
In a joint-stock company, partners are liable to the company up to the amount of their subscribed capital.
Transfers of joint-stock company shares do not need to be made in the presence of a notary.
Transfers of joint-stock company shares do not need to be registered with the Trade Registry or published in the Trade Registry Gazette.
In a joint-stock company, partners can easily transfer printed share certificates to others by endorsing them and giving them to that person.
Partners of joint-stock companies who are not board members are not liable for public debts.
Joint-stock companies can go public and issue bonds to raise funds. The books that joint stock companies are required to keep are as follows:
– Journal ledger
– General ledger
– Inventory and balance sheet ledger
– General assembly resolution ledger
– Board of directors resolution ledger
– Shareholders’ ledger
– Share ledger
– Bond ledger
A) Legal Conditions and Procedures Required for a Share Transfer to Be Valid in Joint Stock Companies
ARTICLE 338(1) The existence of one or more founders who are shareholders is required for the establishment of a joint stock company. The provisions of Article 330 are reserved.
(2) If the number of shareholders drops to one, the board of directors shall be notified in writing within seven days of the date of the transaction giving rise to this result. The board of directors shall, within seven days of receiving the notification, register and declare the company as a single-shareholder joint stock company. Furthermore, if the company is established as a single-shareholder company and the shares are held by a single person, the name, residence, and citizenship of the single shareholder shall also be registered and declared. Otherwise, the shareholder who fails to notify, and the board of directors who fail to register and announce, are liable for any damages that may arise.
(3) The company cannot acquire or have its own shares acquired by becoming the sole shareholder.
B) Transfer of bearer shares
ARTICLE 489– (1) The transfer of bearer shares shall only be effective against the company and third parties upon the transfer of possession.
C) Principles for the transfer of registered shares and share certificates
ARTICLE 490– (1) Unless otherwise provided by law or the articles of association, registered shares may be transferred without any restriction.
(2) Transfer by legal transaction may be made by transferring possession of the endorsed registered share certificate to the transferee.
D) Restrictions on transfer
I – Legal restriction
ARTICLE 491– (1) Registered shares that have not been fully paid may only be transferred with the company’s approval, unless the transfer is by inheritance, division of inheritance, provisions of the marital property regime, or forced execution.
(2) The company may refuse approval only if the transferee’s solvency is questionable and the required security has not been provided by the company.
II – Limitations by the Articles of Association
Principles
ARTICLE 492– (1) The articles of association may stipulate that registered shares may only be transferred with the company’s approval.
(2) This limitation also applies when establishing a usufruct.
(3) If the company enters liquidation, the restrictions on transferability are waived.
In joint-stock companies, the transfer agreement for the transfer of bare shares does not need to be drawn up or notarized at a notary, nor is the approval of other shareholders required for the transfer to be recorded in the share ledger. Furthermore, registration of the share transfer in the trade registry is not mandatory. In fact, neither the Turkish Commercial Code nor the Trade Registry Regulation stipulates that share transfers in joint-stock companies must be registered.
However, if the articles of association of the joint stock company contain a special provision regarding the transfer of shares and share certificates, for example if it states that a decision of the board of directors is required for the transfer of shares, then it is natural that the provisions of the articles of association must be complied with in order for the share transfer to be valid.