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extinguished. Article 520/2 of the New TCC regulates that revaluation
funds and other funds included in the liabilities of the company may be
spend when converted into capital and when the assets re-evaluated are
amortized or transferred.
Reserve Funds on the Discretion of the Company
Article 521 of the New TCC is entitled as “reserve funds on the
discretion of the company”. This title has replaced the term “optional
reserve funds” regulated by Article 467 of the TCC. Pursuant to this
article, the articles of association may regulate that more than five per-
cent of the profit may be reserved as reserve funds, and that reserve
funds may exceed twenty percent of the paid-in capital. Additionally,
the articles of association may provide other reserve funds and deter-
mine their allocation and in which conditions they may be spent. This
article is similar to Article 467 of the TCC.
Article 522 of the New TCC regulates the reserve funds in favor of
employees and workers. While this article has been regulated mainly
through adapting Article 468 of the TCC, it also brings some addition-
al dispositions. Pursuant to the said article, funds may be reserved in
order to found and maintain charitable organizations in favor of direc-
tors, employees and workers of the company, or in order to be given to
public legal entities which have similar purposes. Directors of the com-
pany were not regulated within the scope of this article in the TCC,
unlike the relevant provision of the New TCC.
Article 522/2 of the New TCC regulates that cooperatives may be
founded besides foundations by separating the funds reserved for char-
itable purposes and other assets. The third paragraph of the said article
regulates that, in case fees have been collected by the company for this
purpose, and the employees and the workers could not benefit from the
relevant reserve funds at the end of the employment relationship, the
fees paid by employees shall be refunded to them with legal interest
accrued starting from the date of payment. The New TCC foresaw the
application of statutory interest instead of interest fixed to 5% under
the TCC.
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NEWSLETTER 2012