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Withdrawal and Expulsion from Limited Liability Companies
(“LLC”) Incorporated by Two Shareholders
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Prof. Dr. H. Ercument Erdem
Turkish Commercial Code No. 6102 (“TCC”) brought many inno-
vations and formed many new entities. One of the innovations is the
sole shareholding joint-stock and limited liability company. Pursuant
to the Article 504 of the abrogated Turkish Commercial Code No. 6762
(“Former TCC”) a limited liability company cannot be formed by less
than two, and more than fifty shareholders. The minimum limit of the
number of the shareholders has been abandoned and incorporation of
a sole shareholder limited liability company has become possible.
Expulsion from Limited Liability Companies Incorporated by
Two Shareholders According to Former TCC
The limit of the number of shareholders in the Former TCC caused
problems. For example, in limited liability companies incorporated by
two shareholders, in case of a discrepancy, as the Former TCC didn’t
allow for a single-shareholder limited liability company the only rem-
edy applicable was the dissolution of the company for just cause by the
court. Thus, because of these conflicts among the shareholders, com-
panies that had good dynamics and efficient commercial potential were
faced with dissolution and were eliminated from business life. As sole-
shareholding limited liability companies were not permitted, the Court
of Cassation didn’t allow the expulsion of a shareholder with just
cause. The established opinion of the Court of Cassation was based on
the ground that the withdrawal or expulsion of a shareholder from a
limited liability company incorporated by two shareholders was not
possible, even in the presence of a just cause, since the company can’t
COMMERCIAL LAW
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Article of July 2014