e-book2013

COMMERCIAL LAW

Representation in Joint Stock Companies

Att. Ozgur Kocabasoglu

Introduction

The Turkish Commercial Code No. 6102

(“TCC”) preserves

the rule that the board of directors shall represent and manage a joint

stock company. The TCC regulates how the right to represent will be

exercised, the registration and announcement of the persons authorized

to represent the company and the transfer (and limitations to the transfer)

of the representative authority. This newsletter article will assess the

representative authority in a joint stock company, with a special emphasis

on the transfer of this authority.

In General

Exercise of the Representative Authority

In principle, the board of directors shall represent the joint stock

company before third persons (external representation). A joint stock

company is a merchant and pursuant to Art. 39/1 TCC, merchants are

obliged to realize transactions related to their commercial enterprise by

using their trade names, and their signatures must be put beneath their trade

names. The signature of a joint stock company shall mean the signature

of its authorized representatives. Therefore, the representative authority

of a joint stock company shall be exercised through the signatures of

the authorized signatories of the company beneath the trade name of the

company. This rule is repeated in Art. 372/2 TCC.

In principle, two of the authorized signatories of the company shall

represent the company with their joint signatures. Nevertheless, Art. 370

TCC provides for two exceptions to this rule of “joint/double signature”.

The first exception is the possibility for the articles of association to

foresee a different rule of representation. The second exception is the

case where the board of directors consists of one director only.

Article of December 2013

Official Gazette, 14 February 2011, No. 27846.