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NEWSLETTER 2013
124
Exit Right and Squeeze-Out from Limited Liability
Companies
*
Att. Suleyman Sevinc
Introduction
There are mainly three methods for exiting a limited liability
company: transfer of shares, an exit right and squeeze-out. Unless the
articles of association forbid the transfer of shares, the shareholders of
a limited liability company may exit the company by transferring their
shares. Nonetheless, exiting the partnership on the basis of an exit right
and squeeze-out are subject to regulations different from those governing
the exit of a shareholder from the company through share transfer.
In this article, the provisions relating to exit and squeeze-out in
limited liability companies, as regulated in Articles 638 through 640 of
the Turkish Commercial Code No. 6102 (“TCC”), will be assessed
1
.
The Right to Exit a Limited Liability Company
A shareholder has the right to exit a limited liability company mainly
in two ways: where the company articles of association provide for an
exit right and where there is a just cause. Furthermore, a shareholder,
in the face of the aforementioned, may accede to another shareholder’s
request to exit.
Exit Right due to a Cause Provided by the Articles of Association
Pursuant to Art. 638/1 of the TCC, the right to exit a limited liability
company may be regulated by the articles of association. The execution of
an exit right may be held subject to certain conditions or terms. However,
a provision granting exit rights to only a certain group of shareholders
would not be permitted, as it would violate the equal treatment principle
as put forth in Art. 357 of the TCC.
*
Article of July 2013
1
Art. 636/3 of the TCC regulating the exit of a shareholder that requested the dissolution of the
limited liability company on the basis of just cause is out of scope of this article.