2016.ANA METIN ingilizce.01

Joint Stock Companies’ Capacity of Becoming a Surety

Prof. Dr. H. Ercument Erdem

General

Before the entry into force of Turkish Commercial Code No. 6102

(“TCC”) the capacity of joint stock companies with respect to becom-

ing a guarantor or surety was an important issue, which was assessed

within the scope of ultra vires principle (prohibition of transactions out

of a company’s purpose). In accordance with the ultra vires principle,

which was regulated by the abrogated Turkish Commercial Code No.

6762

(“Abrogated TCC”), joint stock companies did not have legal

capacity beyond the company’s subject of activity and, thus, transac-

tions concluded beyond their subjects of activity were deemed to be

null and void. The TCC has not included this principle, which limits

the company’s capacity with its subject of activity, by taking into con-

sideration the First Council Directive on Companies no. 68/151 of the

European Economic Community (“EEC”)

This newsletter article will analyze joint stock companies’ capaci-

ty to be the subject of rights, and the capacity with respect to becom-

ing a surety in accordance with the ultra vires principle under the

Abrogated TCC, the relevant provisions of TCC, and the Court of

Cassation’s decisions rendered with respect to such topic.

Joint Stock Companies as Subjects of Rights

The joint stock companies’ ability to be the subject of rights is

extended following the abandonment of the ultra vires principle.

COMMERCIAL LAW

Article of February 2015

Published in Official Gazette dated 14 February 2011 and numbered 27846, and entered into

force on 1 July 2012.

Abrogated on 1 July 2012 by the entry into force of the TCC.

date of access: 3 March 2015.