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sidiary company. As a result of the dominance relationship between the
parties, the dominant company leads and manages the subsidiary com-
pany by giving instructions.
The domination relationship between the dominant company and
the subsidiary company provides uniform management within the
group companies. Therefore, the uniform management resulting from
the domination agreement benefits the group companies
1
.
The dominant company gives instructions to the subsidiary com-
pany on basic matters such as the management of the company, deter-
mination of targets, coordination of enterprises’ activities and designa-
tion of high level management and does not interfere with the daily
activities and operation of the subsidiary company
2
.
The transfer of control of all the authority of the subsidiary com-
pany to the dominant company is not required in order to establish a
domination relationship. When the dominant company leads and
directs the management of the subsidiary company in one or more
areas, a domination relationship may be considered to exist as well.
Legal Nature of Domination Agreements
The domination agreement between the dominant and subsidiary
companies is formed pursuant to the law of obligations. Contractual
rights and obligations arise from domination agreements. Domination
agreements thereby constitute the basis for contractual group compa-
nies.
Domination in contractual group companies is based neither on
capital nor on the majority of members in the managing body; it only
depends on the domination agreement concluded pursuant to the law
of obligations between two or more companies
3
.
Approval of General Assembly in Domination Agreements
Domination agreements are subject to the approval of the sub-
sidiary company’s general assembly. When the domination agreement
28
NEWSLETTER 2014
1
YANLI, Veliye,
“
Hâkimiyet Sözleşmeleri
”, Regesta Cilt: 3, Sayı: 1, Yıl: 2013, p. 6.
2
YANLI, Veliye,
“
Hâkimiyet Sözleşmeleri
”, Regesta Cilt: 3, Sayı: 1, Yıl: 2013, p. 6-7.
3
PULAŞLI, Hasan
, Yeni Şirketler Hukuk Genel Esaslar, Ankara 2012, p. 226.