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Liability of Board Members

The legal liability of the board of directors, as regulated within the

TCC, is fault based and may result from non-compliance with the

obligations arising from the law or the articles of association of the rel-

evant company, as per Art. 553; non-compliance of the representations

and documents with the law, as per Art. 549; misleading declarations

regarding the share capital or knowledge of insolvency, as per Art. 550;

or from value evaluation, as per Art. 551.

Liability Related to Tax Debts

As a rule, a tax claim is first collected from the original tax debtor.

Therefore, tax debts and all related liability of a joint stock company

belongs primarily to the company as a legal entity. However, tax debt

that cannot be recovered from the corporate legal entity, may be collect-

ed from persons and institutions that are responsible for the company

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.

Pursuant to the Art. 10, par. 1 of the TPC, if a legal entity is a tax-

payer or tax responsible, these obligations must be executed by its

legal representatives. The second paragraph sets forth that taxes and

debts that cannot be collected from the tax responsible may be collect-

ed from the assets of those persons who have a legal obligation to

ensure payment on behalf of the taxpayer.

Liability Related to Public Debts

Pursuant to PCPAC, representatives of legal entities are liable for

outstanding public debts since a legal entity as a board member does-

n’t have personal assets. According to Art. 35 of PCPAC, the represen-

tatives have strict liability if public receivables cannot be collected or

if it may be anticipated that collection will not be possible beforehand.

Liability of the Legal Entity’s Representative as a Board

Member

Representatives of legal entities are primarily obliged to protect

the rights and benefits of the company whose board of directors they

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NEWSLETTER 2014

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Veliye YANLI

– Banka ve Ticaret Hukuku Dergisi, Anonim Şirketlerin Vergi Borçlarından

Kanuni Temsilcilerin Sorumluluğuna İlişkin Bazı Hususlar, p. 66.