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Changes In The Turkish Commercial Law


It wasn’t always easy to establish a business in Turkey, but the new Turkish Commercial Code which came into effect on July 1, 2012 meets international standards and creates an environment of transparency. It also signalled an important move towards aligning the Turkish business environment with EU legislation as required by the EU accession process.
Main changes in the Turkish Commercial Law can be outlined as follows:

Single Shareholder

Under the old Turkish commercial code it was regulated that a minimum of five shareholders were necessary to establish a joint stock company, while for a limited liability company a minimum of two partners was requested.
With the New TCC each corporate entity can be established with only a single shareholder. Further, the shares of previously established companies can now be held by a single party.

Board of Directors

First of all it is no longer required that board members must also be shareholders. This means, any independent individual is allowed to be a board member. This change allows professional boards of directors to be built which will improve corporate governance.
In compliance with the EU legislation the New TCC regulates, a board of directors may now be comprised of a single person instead of at least three members. This change brings especially for foreign companies a crucial simplification to do business.
Unnecessary travels can also be avoided in the future because the New TCC regulates that board meetings can be held in an electronic environment and resolutions can be approved via electronic signatures. Under the former TCC the physical presence of board members was necessary.
Last but not least, legal entities may be appointed as board members. This simplifies by removing red tape and simplifying the process especially for subsidiaries.
 
Registered Capital System

The New TCC offers non-public companies the opportunity to adopt a registered capital system. This guarantees the considerable advantage for foreign companies to increase capital without bureaucracy and travels and ensures the general idea that doing business in Turkey is flexible.