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Conditional Capital Increase
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Att. Tuna Colgar
Introduction
The notion regarding the quick and easy fulfillment of the need for
capital, which was adopted by the Turkish Commercial Code No. 6102
(“TCC” or “Law”), resulted in the formation of new capital types and
the regulation of provisions on various capital increase procedures.
Two types of capital systems existed in the former code that has been
abrogated with the entry into force of the new Law. These were the
principal capital system adopted in the former TCC and the registered
capital system adopted in the Capital Markets Law. However, the new
TCC, in preserving the principal capital system, made the registered
capital system a system not only beneficial to public companies but
also to other companies and diversified the instruments that may be
used in the capital increase concluded from the domestic funds of the
companies.
The conditional capital increase, which is the subject of this arti-
cle, is a new capital increase system under Turkish law and finds its
roots in the Swiss Code of Obligations. The conditional capital
increase is a capital increase system that may be concluded depending
upon the creditor’s exercise of its conversion and purchase rights in the
issuance of bonds replaceable with share certificates, and in capital
increases directed at employees. This system will provide convenience
in that it allows for the usage of capital in a more flexible and effective
manner.
The Principles of Conditional Capital Increase
The basis of this capital increase system, foreseen as a funding
instrument, is formed with the purpose of procuring the participation
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Article of March 2014