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numbered 5064 which was announced in the Official Gazette dated
30.12.2003 and numbered 25332 (“Law nr. 5064”). With this Law nr.
5064, inflation adjustment system is accepted under amended articles
of TPL and the re-assessment system is overruled, thus the accounts
regarding the “Increases upon Re-assessment of Fixed Assets” and
“Increases upon Re-assessment of Affiliates” set forth in the balance
sheets are no longer applicable. Similarly, since article 38/4 of the
Income Tax Law numbered 193 (“ITL”) has also been eliminated; the
“Cost Increase Funds” which previously were permitted to be added to
the share capital have also lost its applicability.
On the other hand, before those amendments made with Law nr.
5064, the ways of capital increase by utilizing the internal sources has
been listed in the Annex 2 of the above mentioned Communiqué nr.
2003/3 and no correction has been made in this Communiqué after the
law amendment. Therefore, it has been seen that the trade registries
organized under the Ministry of Customs and Trade and the tax offices
organized under the Ministry of Finance have conducted different
implementation which are contrary to each other. Some trade registries
have continued to register this kind of capital increases which are made
upon re-assessment of fixed assets based on the certified accountant
reports as per Communiqué nr. 2003/3.
Given the circumstances, this kind of capital increases should not
be registered since the law is a higher legislative act than the commu-
niqué and the discrepancies in the communiqué should be corrected.
Upon the amendments made by Law nr. 5024, the determination of
the Company’s equity can be requested from the court for only fol-
lowing circumstances;
- for the contribution of an enterprise to a company as share cap-
ital (in other words, change of type, merger, de-merger transac-
tions set forth under ITL 81, CPL 18, 19 and 20) and
- in a situation where a company lost its entire share capital, for
the determination whether the assets of the company is suffi-
cient to cover the liabilities and whether the company becomes
bankrupt or not.
COMMERCIAL LAW
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