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continuous loss of the company and a regular decrease of distributed
dividends.
The just causes accepted among scholars and jurisprudence during
the period when the fTCC was in force may be used as a reference for
defining just cause under the TCC. As emphasized by scholars, Art.
161 and Art. 187 fTCC regarding just causes in collective companies
may shed light on the interpretation of just cause during the fTCC peri-
od. For instance, Art. 187 fTCC states that betrayal by a shareholder of
the company in the management of the company and its accounts, non-
fulfillment of his/her primary duties, misuse of the company name and
property for his/her personal benefits, or his/her loss of ability or
capacity to realize company actions due to illness or another cause, are
just causes.
Numerous Court of Appeals rulings under the fTCC and TCC also
shed light on various reasons which cause the continuity of the part-
nership or shareholding relationship to become unbearable. The mis-
use of the majority right, the non-operability of company bodies, mate-
rial conflicts or hostilities among shareholders and the filing of law-
suits, criminal accusations and even physical confrontations, disrup-
tion of trust, unjustified benefits obtained for or by certain sharehold-
ers, violation of economic rights, such as the decrease or lack of divi-
dend distribution, constant loss declared by the company and the
impossibility for the company to realize its objective, the violation of
a shareholders’ right to information and inspection and mismanage-
ment of the company are certain examples seen in jurisprudence.
Based on the above examples, just cause may be defined as a legal
event which renders the continuity of partnership relations based on
the good faith impossible.
In order for the ruling for the termination of a limited liability
company, the elements that ensure continuity of the company should
no longer be present. Termination should be the case only if the caus-
es which the claimant shareholder alleges prevail over the benefits of
other persons in the continuity of the company; unless the just cause is
considered material to this extent, the court should not rule for termi-
nation of a company.
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NEWSLETTER 2014