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the provisions of the New TCC –prior to amendments introduced by
the Amendment Act– shall be assessed and then changes brought by
the Amendment Act shall follow.
The System Introduced by the New TCC
The New TCC bans shareholders to obtain credit or loan from their
company apart from their indebtedness arising from their capital sub-
scription. Prior to the amendment introduced by the Amendment Act,
the relevant article aimed at protecting other shareholders whom are
not at executive level in the company and the creditors of the compa-
ny. The justification of this provision stated that the practice prior to
the entry into force of the New TCC whereby the shareholders could
borrow from the company resulted in inconvenient situations, thus the
article aimed to prevent shareholders from using the capital of the com-
pany for their personal business.
Nevertheless, the relevant article permits the shareholder to borrow
from the company as a result of certain transactions executed by the
shareholder. The article 358 does not prohibit bona fide business loans
to the shareholders resulting from transactions entered into with the
company, which both fall within the scope of activities of the compa-
ny and is necessary to be executed in relation to the commercial enter-
prise of the shareholder. This exception aims at preventing any prob-
lems arising from the rigid application of this provision.
Article 24 of the Act numbered 6103 on the Entry into Force and
Application of the Turkish Commercial Code (“Application Act”) fore-
sees an adaptation period for the shareholders who had already bor-
rowed from their company prior to the entry into force of the New TCC.
Such indebted shareholders are obliged to repay their debts in cash to
the company within three years as of the date of entry into force of the
New TCC. Non-compliance with this obligation shall result in the share-
holder being faced with the sanction foreseen under the New TCC. The
New TCC regulates that shareholders, acting contrary to the ban shall be
faced with judiciary monetary fine of at least three hundred days.
The Amendment Introduced by the Amendment Act
The Amendment Act amended both the provision governing the
prohibition on loans to shareholders by the company and the provision
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