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COMMERC I AL LAW
47
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If the board of directors or the auditors cannot be elected by the
general assembly;
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If any members cannot be appointed to the board of directors or any
members cannot be appointed as auditors in order to fill the empty
positions, and therefore the quorum cannot be met;
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If a body becomes functionless because the quorum cannot be met;
the joint stock company will be deemed to lack of bodies.
Lack of quorum or contrary to the decisions by some of the members
shall not be deemed as “lack of body” provided that the board of directors
meets regularly.
In practice, when the board of directors cannot meet or cannot adopt
a decision during the meeting, a “deadlock” occurs. Generally, in the
Articles of Association or in the Shareholders’ Agreement, a special
provision is stipulated with regard to deadlocks. It is given superiority to
such provisions in accordance with the freedom of contract in case that
they are not contrary to obligatory provisions. If a provision with regard
to deadlock is not stipulated and the deadlock continues for a long time
and the company becomes nonfunctional as a result, then the deadlock
will cause the company to lack bodies. The entire private conditions and
positions of each matter will be taken into account when deciding on
whether the time is long enough.
Disputes between Shareholders do not Require Appointment of a
Trustee
Disputes between the shareholders or disputes arising from different
relations do not require the appointment of a trustee. It is not possible for
the shareholders to agree on each and every issue. Some of the shareholders
may support an investment whereas some of them do not. However, such
differences of opinion do not require the appointment of a trustee.
A weakness in the representation and the management of a joint stock
company do not require the appointment of a trustee. Also, problematic
situations such as the inability of the board of directors to manage or
represent the company efficiently, or the company’s failure to realize
an anticipated level of profitability also do not require the appointment
of a trustee. Representation and management are duties of the board of