41 / 469
COMMERCIAL LAW
27
As it is illustrated in the Article 401, the TCC prefers to give examples
to the preferences that may be granted and does not define the concept of
preference shares.
In Article 478/2 of the New TCC, the term preference is defined as
“dividend, liquidation share, priority and voting rights granted in favor
of a share, or a shareholding right not provided by law”
. Therefore, a
framework is outlined for the definitions that canbe given for the preference
rights thus different meaning and definitions that could be attributed to the
same concept have been prevented. The preference is to grant preemptive
rights to a share compared to other shares, or a shareholding right that
has not been provided by law. The New TCC added priority right and
preference in voting rights to the examples given for preference rights.
Under the TCC, even though they were not recognized and listed in the
relevant article apparently, these two preference rights were construed
and evaluated under the title “similar issues” by the doctrine.
Creation of Preference Shares through the Articles of Association
Pursuant to the New TCC, the preferences may be stipulated by the
Articles of Association, or created by the amendment to the Articles of
Association. Under Article 401 of the TCC, whether preference shares
can be created through the amendment of the Articles of Association
was a long debated issue in the doctrine. The New TCC clarified this
ambiguous issue and stated that preference shares may be created by the
amendment to the Articles of Association. Furthermore, the New TCC
emphasized that the preference shares may only be created through the
Articles of Association.
Article 421/3 of the New TCC regulates the quorums necessary to
constitute an amendment to the Articles of Association concerning the
creation of preference shares. Resolutions of amendment of the articles
of association concerning the creation of preference shares require the
votes of shareholders holding seventy five percent of the shares, or
of their representatives. In the event that this quorum is not reached
in the first meeting, the same quorum is required in the subsequent
meetings.