New Criteria for Cooperatives’ Affiliates to Qualify as Public Companies
The Law No. 7159 Amending the Highway Traffic Law and Certain Other Laws (“Law“) was published and entered into force on December 28, 2018. The Law amends the criteria in the Capital Markets Law No. 6362 (“Capital Markets Law“) for cooperatives’ joint stock company affiliates to qualify as public companies.
- Prior to the amendment, joint stock companies whose majority shares are owned by cooperatives with at least 500 shareholders or cooperatives unions formed by cooperatives with at least 500 shareholders were qualified as public companies. With the amendment, “the ownership of the majority shares” criterion is replaced with “having management control over the company”. As a result, joint stock companies under the control of the aforementioned cooperatives or cooperatives unions will qualify as public companies.
- Prior to the amendment, in order to qualify as a public company, the annual sales revenue of a joint stock company or the total annual sales revenue of a joint stock company whose majority shares are owned by the same cooperative or cooperatives union must be at least TRY 50,000,000. With the amendment, the annual sales revenue will be considered separately. Therefore, a joint stock company with an annual sales revenue less than TRY 50,000,000 will not qualify as public company even if the total annual sales revenue of the joint stock companies controlled by the same cooperative or cooperatives union is TRY 50,000,000 or higher.
- Joint stock companies controlled by cooperatives central unions will qualify as public if the above mentioned conditions are satisfied.