49 / 521
on the balance sheet. This is a new provision regulated in the TCC that
aims to protect shareholders who do not have enough financial power
by prohibiting the high amount of capital increase concluded from
external funds, even though there are enough domestic funds to con-
clude a domestic capital increase. Therefore it is a mandatory rule and
there are no exceptions to it
1
.
Common Provisions regarding the Capital Increase through
Capital Subscription
As in the establishment, the capital increase shall be made through
cash subscription and payment, through commitment in kind or
through conversion of the debts of the company into capital.
Each shareholder has the right to purchase the newly issued shares
in accordance with his capital-share ratio. If just causes exist, pre-emp-
tion rights may be restricted by the affirmative votes of shareholders
representing at least sixty per cent of the share capital. Except for the
regulation concerning quorum, the principals regarding the exercise
and the restriction of pre-emption rights are also valid for the board of
directors’ resolution on the registered capital system.
Moreover, according to the Ministry Communique issued in line
with TCC Art. 333, if the company in question requires the consent of
the Ministry of Customs and Trade, such consent must be taken.
Another provision adopted by the TCC is the declaration of the
board of directors. Accordingly, the board of directors should prepare
and sign an explicit, complete and correct declaration in compliance
with the principal of honest accountability. If there is capital in cash or
an in kind contribution, the content of the declaration shall include that
this procedure is dully fulfilled, legal and administrative obligations
are abided by, the reasons for the abolishment of pre-emption rights in
case of a removal and the names of the shareholders having pre-emp-
tion rights, including their justifications, in detail. This declaration
shall be signed by all members of the board of directors. Any inade-
quacy in the declaration may provoke the annulation or even nullity of
COMMERCIAL LAW
33
1
PULAŞLI Hasan
,
Şirketler Hukuku Genel Esaslar
, Ankara, 2013, p. 599.