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Prohibition on Loans by Companies to Their Shareholders
Pursuant to the New Turkish Commercial Code
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Att. Leyla Orak
Introduction
The Turkish Commercial Code numbered 6102 (“New TCC”) has
been enacted by the Grand Turkish National Assembly on 13 January
2011. Among other novelties, the New TCC prohibits grant of person-
al loan or any other advance funding to its directors and shareholders.
The novelties introduced by the New TCC have attracted many criti-
cisms between the date of enactment and the date of entry into force of
the New TCC, which is 1 July 2012.Consequently, the New TCC has
been amended initially by the Act numbered 6335 amending the
Turkish Commercial Code and the Act on the Entry into Force and
Application of the Turkish Commercial Code (“Amendment Act”)
which was enacted prior to the entry into force of the New TCC, and
the Act numbered 6353 Amending Certain Laws and By-Laws enact-
ed by the Grand Turkish National Assembly on 4 July 2012. The
Amendment Act introduces provisions which minimize the scope of
prohibition of indebtedness to the company to a great extent. This
month’s newsletter article shall assess the provisions of the New TCC
governing this prohibition on loans by the company and the changes
introduced by the Amendment Act thereto. The changes introduced by
the Amendment Act and related assessments shall be analyzed in
another article of our Newsletter.
Prohibition on Loans to the Shareholders by the Company
Article 358 of the New TCC regulates the prohibition on loans to
the shareholders by the company. While the enacted article makes it
unlawful for shareholders to borrow any fund from the company, the
provision amended by the Amendment Act allows lending activity by
the companies subject to certain conditions. Below, initially the prohi-
bition of indebtedness of the shareholder to the company pursuant to
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NEWSLETTER 2012
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Article of July 2012