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Pursuant to the TCC, the companies are entitled to exercise all rights
and undertake all obligations pursuant to Art. 48 of the Turkish Civil
Code
4
(“Civil Code”), without prejudice to the legal exceptions (TCC
Art. 125/2). Moreover, pursuant to Art. 48 of the Civil Code, legal per-
sons are entitled to exercise any rights and obligations apart from the
rights and obligations that are specific to persons, such as gender, age,
and kinship. Therefore, joint stock companies may enter into transac-
tions, and undertake liabilities, without any limitation regarding the
company’s subject of activity. In this respect, even though a company’s
purpose and objectives must be stated in its articles of association, the
company’s purpose and object is not of vital importance in determin-
ing the boundaries of the company’s being the subject of rights, and, in
principle, the company is bound by those transactions that are beyond
its subject of activity.
The same principle is also regulated in the first paragraph of Art.
371/2 of the TCC regarding representation. In accordance with the said
provision, the company is bound by transactions that its authorized
representatives conclude with third parties that are beyond the compa-
ny’s subject of activity. However, Art. 371/2 of the TCC also provides
an exception to this principle. If it is proven that the third party knew
or was in a position to know that the transaction fell outside the com-
pany’s subject, then that joint stock company is not bound by the trans-
action. The third party who knew, or who was in a position to know,
that the transaction fell outside of the company’s field of operation
would not be able to claim that it was acting in good faith. The burden
of proof lies with the joint stock company in such case. The fact that
the articles of association stipulates such issue, or if the articles of
association are announced, shall not be deemed as a sufficient proof by
itself (TCC Art. 371/2), since the third parties are not under the oblig-
ation to know the scope of a company’s subject of activity. Therefore,
the third party’s affirmative knowledge is necessary.
An important question that arises within this context is whether the
transactions with respect to becoming a surety and providing a guar-
antee may be assessed within the scope of Art. 371/2 of the TCC.
46
NEWSLETTER 2015
4
Published in the Official Gazette dated 8 December 2001 and numbered 24607, and entered into
force on 01 January 2002.