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Capital Increase Through Capital Subscription
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Att. Selen Ozturk
The domestic or external increase of the amount stipulated in a
company’s articles of association is referred to as the “capital
increase”. Due to the fact that this amount is stipulated in the articles
of association, in principle, the capital increase is considered as an
amendment to the articles of association. However, the nature of the
capital increase may differ due to the capital system adopted by the
company. The capital increase through capital subscription in non-pub-
lic joint stock companies and especially, capital increase in companies
that adopted a registered capital system shall be examined in this
newsletter article.
General
Capital increase may be examined under two main branches;
namely capital increase concluded through capital subscription and
capital increase through internal funds. The increase through capital
subscription requires the shareholders who made a commitment in
order to subscribe to the capital increase, to bring capital in kind or
capital in cash to the company. The TCC stipulates two conditions for
the capital increase through external funds. Accordingly, the first con-
dition is that the share prices shall be fully paid. However, in accor-
dance with the second sentence of Turkish Commercial Code (“TCC”)
Art. 456,
“If the unpaid amount is insignificant in proportion to the
share capital, it shall not prevent the capital increase”
. This provision
is added to the new TCC in order to prevent doctrinal conflicts.
Moreover, the second condition foreseen in the TCC stipulates that the
funds allowed to be added to the capital by the legislation, shall not be
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NEWSLETTER 2014
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Article of August 2014