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When the terms and conditions of an exit right arising from the
articles of association are met (or whenever the shareholder wishes -
where no such conditions are stipulated in the articles of association),
the shareholder declares to the company his will to exit. This declaration
is effective upon reception by the company and in general, is not bound
by any form requirement; although, the articles of association may also
stipulate form requirements.
An Exit Right due to a Just Cause
The right to exit in the presence of a just cause is stipulated in Art.
638/2 of the TCC. The invocation of this right does not rely upon the
existence of a provision in the company articles of association.
In general, a “just cause” is a situation that renders the relationship
of partnership unbearable. This may originate from the activity of the
partnership or the personal relationships between the shareholders.
Whether the shareholder exercising the right is negligent in the occurrence
of the situation does not affect his ability to exercise the exit right.
Although the TCC does not define “just cause” per se, certain
situations have been cited as just cause. For instance, the “disloyalty of
a shareholder at management or accounting” or “failure of a shareholder
to perform the essential duties and obligations” and situations similar
to these qualify as just causes in Art. 245 of the TCC. These cases are
of exemplary nature; the presence of a just cause will be determined
separately in each case, taking into account the facts of the case, the
particularities of the shareholder and the structure of the partnership.
Art. 638/2 stipulates that an exit right may be enforced as a request
before the court. However, Turkish doctrine indicates that the shareholder
may simply declare his will to exit to the company prior to a request
before the court. The shareholder shall take this request before the court,
if and when the company denies it.
The second phrase of Article 638/2 of the TCC was not a part of the
former Turkish Commercial Code No. 6762, and it has been integrated
into the TCC from Swiss law. According to this phrase, the court may
decide to either freeze all or some of the rights and obligations of the