e-book2011

COMMERCIAL LAW

Innovations in the New Turkish Commercial Code Concerning

the Amendments of the Articles of Association - II

Prof. Dr. H. Ercüment Erdem

Provisions concerning the amendment of the articles of association

(“AoA”) were subject to extensive modifications within the New Turkish

Commercial Code (“New TCC”). Some of the provisions concerning the

amendment of the AoA were addressed in our article last month. This

month, we shall continue our analysis concerning the amendments of the

AoA, and we shall especially concentrate on the amendments of the AoA

concerning the capital of the company.

Amendments of the AoA Concerning Capital Increase /Equity

Raising

Article 456 of the New TCC regulates the general principles concerning

capital increase. Pursuant to Article 456/1 of the New TCC, the capital of the

company may not be increased unless the cost of the issued shares is fully

paid. The relevant provision is similar to the general principle laid down

under Article 391 of the Turkish Commercial Code (“TCC”). However,

pursuant to the second sentence of Article 456/1, the fact that the amount

of called-up share capital, which does not constitute a substantial portion of

the issued share capital may not prevent the capital increase. With this new

disposition, the obstacles to raise share capital faced by the insignificant

amounts of called-up share capital has been overcame, and it is stipulated

that the amounts which may be neglected and which are not important in

value shall not be a preventive factor on the share capital increase.

Pursuant to Article 456/3 of the New TCC, in the event that the

capital increase is not registered within three months from the general

assembly (“GA”) or board of directors (“BoD”) resolution, the resolution

and the permission if applicable, shall be invalid. The relevant disposition

provides a solution for another need in practice. With the requirement

to register the capital increase within a certain period of time, delays

resulting from the capital increase have been prevented.

Article of October 2011