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COMMERCIAL LAW
105
Squeeze-Out, Sell-out and Exit Rights in Joint Stock
Companies
*
Att. Leyla Orak
Introduction
The partnership between a joint stock company and its shareholder
will cease, in principle, upon the transfer of shares by the shareholder. A
holder of joint stock company shares may cease its partnership relationship
voluntarily by transferring its shares to a third party.
Nevertheless, voluntary share transfer may not always be the
answer to the specific needs. From the company’s perspective, it may be
necessary to sever its partnership with a shareholder causing perturbation
in the company, even in the absence of the shareholder’s will, by resorting
to other means. For these reasons, a company’s right to squeeze-out
shareholders is significant. Similarly, a non-controlling shareholder in a
company may not want to be bound by the consequences of decisions
in which they did not participate and may want to end the partnership,
even in the absence of a prospective purchaser for its shares. For these
reasons, the sell-out right of shareholders to sell their shares to another
shareholder, and the exit right requiring the company to purchase their
shares are very important.
In this article, the statutory provisions regarding squeeze-out, sell-out
and exit rights will be analyzed.
Provisions of the TCC
The Turkish Commercial Code No. 6102
1
(“TCC”) regulates the
squeeze-out of shareholders from a joint stock company for the first time.
The TCC further regulates the sell-out right granted to shareholders who
do not have control over companies that are members of group companies,
under certain circumstances.
*
Article of February 2013
1
Official Gazette, 14 February 2011, No. 27846. TCC entered into force on 1 July 2012.