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of the New TCC for the article, it is possible to increase or decrease the
quorum provided by the relevant article.
The general assembly resolution pertaining to issuance of a
security is required to contain all relevant terms and condi-
tions of securities
The security certificates issued in accordance with Article 504 of
the New TCC may be bearer, or promissory certificates and with a
nominal value. The general assembly and, in case it is authorized, the
board of directors are competent to determine the nominal value. The
last sentence of Article 504 contains a provision which regulates debt
instruments only. Accordingly, the payment method of debt instru-
ments should be in cash and it should be paid at the time of delivery.
Pursuant to Article 505 of the New TCC, unless otherwise regulat-
ed by law, the general assembly may authorize the board of directors
with regards to issuance of security, determination of the terms and
conditions related thereto for a maximum term of fifteen months. In the
justification of the articles of the New TCC, it is stated that the provi-
sion of a maximum term has been introduced for convenience purpos-
es. Reference is made to Articles 421/3 and 421/4 with regards to quo-
rums which shall be applied to resolutions pertaining to authorizing the
board of directors. Accordingly, the resolutions shall be adopted with
the votes of shareholders holding at least seventy five percent of the
capital or their representatives and in the event that this quorum is not
reached in the first general assembly meeting, the same quorum should
be obtained for the following meetings.
Article 506 of the New TCC provides a limit concerning the total
value of the debt instruments to be issued in accordance with the arti-
cles above. This value shall not exceed the sum of the company’s cap-
ital and reserve funds which appear on the balance sheet. Pursuant to
Article 506/2 of the New TCC, provisions of the Capital Market Law
are reserved.
Conclusion
As detailed in the above, while the provisions in the New TCC
concerning securities maintained the basic principles set forth in the
COMMERCIAL LAW
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