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Legal Alerts

14/10/2020

Amendments to the Regulation on General Assembly Meetings of Joint Stock Companies

Legal Alerts
Corporate
General

Recent Development

The Regulation regarding Amendments to the Regulation on the Procedures and Principles of the General Assembly Meetings of Joint Stock Companies and the Ministry of Customs and Trade Representatives Attending These Meetings prepared by the Ministry of Trade (“Ministry”) was published in the Official Gazette dated October 9, 2020 and no. 31269.

The title of the regulation was also changed from the “Regulation on the Procedures and Principles of the General Assembly Meetings of Joint Stock Companies and the Ministry of Customs and Trade Representatives Attending These Meetings” to the “Regulation on the Procedures and Principles of the General Assembly Meetings of Joint Stock Companies and the Ministry Representatives Attending These Meetings” (“Regulation”). In addition, several new regulations regarding the functioning of the general assembly meetings were introduced. The Regulation text is available here (in Turkish).

What’s New?

  • The obligation to form the meeting presidency and prepare the list of attendees was abolished for joint stock companies with a sole shareholder.

Pursuant to the amendment in the second paragraph of Article 14 of the Regulation, the obligation to form the meeting presidency and prepare the list of attendees in general assembly meetings of joint stock companies with a sole shareholder has been lifted.

Prior to the amendment, although it was not required for joint stock companies with a sole shareholder to appoint the minutes clerk and vote collector, it was required to appoint the president of the meeting and prepare the list of attendees.

In accordance with the first paragraph of Article 26 of the Regulation, the obligation of the shareholder or its representative to sign the meeting minutes at the meeting for the joint stock companies with a sole shareholder continues.

  • It is obligatory for the general assembly powers of attorney to be notarized.

Prior to the amendment, it was possible to combine the power of attorney with a notarized signature circular of the proxy giver, if the power of attorney for the representation of both registered or bearer share certificate holders was not certified. Pursuant to the amendment in the seventh paragraph of Article 18 of the Regulation, this is no longer possible.

Accordingly, the power of attorney for the representation of both registered and bearer share certificate holders of private companies can now be used only if notarized.

  • The obligation to have a Ministry representative at the meetings of joint stock companies with a sole shareholder was lifted.

Pursuant to the amendment in the second paragraph of Article 32, the obligation to have a Ministry representative in the general assembly meetings of joint stock companies with a sole shareholder has been lifted, except for joint stock companies whose incorporation and articles of association amendments are subject to the Ministry’s approval.

Prior to the amendment, a Ministry representative had to be present in the general assembly meetings where the following issues were included on the agendas of joint stock companies with a sole shareholder and whose incorporation and articles of association amendments were not subject to the approval of the Ministry: articles of association amendments regarding capital increase or decrease; transition to and exit from the registered capital system; increase of registered capital limit or change of scope of activity; and merger, demerger or company type change.

  • The opportunity to make Ministry representative applications electronically through MERSIS, and also with petitions signed by the shareholders and certified by a notary public, was introduced.

Pursuant to the amendment in the first paragraph of Article 35, the necessary applications for the appointment of the Ministry representative can be made physically or electronically through MERSIS (Central Registration System).

In addition, companies can now request the appointment of a Ministry representative through a petition containing the signatures of all the shareholders or their attorneys certified by a notary public. Companies can make the request via petition if (i) the board of directors does not exist; (ii) it is not possible to meet the board of directors’ meeting quorum; and (iii) it is requested to hold a general assembly meeting exclusively for the appointment of the board of directors’ members without announcement.

  • The sample documents annexed to the Regulation were formally updated.

Conclusion

The Regulation introduced several changes regarding the functioning of general assembly meetings. Equity companies, notably joint stock companies with a sole shareholder, should take into consideration the amended provisions of the Regulation and the updated documents annexed to the Regulation before holding their general assembly meetings.