Determination Of The Starting Date Of The Term Of Office Of The Board Of Directors And The Board Of Managers In Joint Stock And Limited Liability Companies

Determination Of The Starting Date Of The Term Of Office Of The Board Of Directors And The Board Of Managers In Joint Stock And Limited Liability Companies

In joint stock and limited liability companies, representation and binding authority are exercised through the mandatory bodies of the board of directors and the board of managers. The board of directors and the board of managers are established in accordance with the procedures and principles set forth in the Turkish Commercial Code (TCC), and the TCC does not provide a clear regulation regarding the starting date of the term of office of these individuals. In this article, we shall examine how the starting date of the term of office of board members and managers should be determined.

Pursuant to Article 629 of the TCC, the scope of the representation authority of managers authorized to represent a limited liability company, the limitation of such authority, the determination of those authorized to sign, the form of signature, and their registration and publication shall be governed by the relevant provisions of the TCC applicable to joint-stock companies by analogy.

In this context, the explanations made in this article regarding the subject matter under review will be valid for both joint stock companies and limited liability companies. There are three possibilities regarding the date of commencement of duties. The first is the date of election, the second is the date of commencement of duties, and the third is the date of registration in the registry.

The situation regarding the announcement has been taken into consideration. This is because the Court of Cassation ruled in the decision below that the announcement made in the trade registry gazette is explanatory in nature and not constitutive.

Supreme Court HGK. E. 2012/21-734 K. 2013/152 T. 30.01.2013

“…In light of the above explanations, it is clear that the termination of the plaintiff’s representative authority in the company outside the lawsuit and the appointment of a new representative, as published in the trade register gazette, is not aimed at giving legal effect to the transaction but at informing third parties of this matter, and therefore constitutes a declaratory rather than a constitutive act…”

In doctrine, it is stated that three distinctions can be made regarding the commencement of the term of office of the board of directors and the board of managers, as mentioned above. These distinctions are the day of election, the day of assumption of office, and the day of registration in the commercial register. It is emphasized that registration does not have a constitutive nature and, therefore, cannot be considered for determining the date of assumption of office. The day of assumption of office and the day of election remain as options. The provision in the old Turkish Commercial Code requiring that a person elected to the board of directors acquire at least one share and become a shareholder before assuming office has also been repealed, as has the corresponding provision in Swiss Civil Code Article 707/2. However, in Swiss doctrine, it was accepted that the requirement of shareholder status as a prerequisite for assuming office was exceptional, and that determining the timing of such acquisition was also very difficult. Due to this difficulty, it was stated that the date of commencement of duties could not be considered the starting date of the term of office. For the reasons explained above, it is accepted that only the date of election is decisive for the starting date of the term of office.

In this context, it would be more accurate to accept that the term of office of the board of directors or the board of managers elected in accordance with the decision of the partners’ meeting or the general meeting begins on the date of their election. However, if the decision contains a contrary provision, this situation should be evaluated in accordance with the principles stated in the decision. For example, if the general assembly or partners’ meeting decision states that the board of directors or board of managers elected shall commence their term of office on a specific date, the term of office shall commence on the date specified in the decision, and the date referred to as the date of commencement of duties shall be accepted. Even if this is the case, we recommend obtaining a trade registry certification confirming that the decision of the general assembly or partnership council has been approved by the relevant trade registry office and ensuring that the decision and the certification are reviewed until the announcement is made. This is because the mere adoption of the decision is not binding on third parties; it must also be registered and announced in the trade registry.

Year: 2025

Application: Determination Of The Starting Date Of The Term Of Office Of The Board Of Directors And The Board Of Managers In Joint Stock And Limited Liability Companies

Lawyers: Mehmet Said Sarıbaş & Bilal Akbaba

E-mail: info@saribasakbaba.av.tr

Website: saribasakbaba.av.tr