Newsletter-21

34 NEWSLETTER 2016 the non-delegable duties and powers of the board of directors (TCC Art. 375). However, some opinions in the doctrine defend that it is possible for the board to make a proposal on dividend distribution as the body that has command of the economic structure of the company. 3 It is also possible to reach this opinion through TCC, Art. 437/1, that sets out the entitled right to gather and examine information. Pursuant to the relevant provision, financial statements, consolidated financial statements, annual activity report of the board of directors, the au- dit reports and profit distribution proposal will be made available in the company headquarters and branches at least fifteen days before the general assembly meeting for the examination of shareholders. Therefore, the board of directors may submit to the general assembly a proposal regarding the amount of profits to be distributed. However, the general assembly is not bound by the proposal of the board of directors, and it is the body that decides on the distribution time, pro- cedure (such as in cash or in kind – shares free of charge) and amount of the profits. The general assembly decides in the general assembly meeting the manner in which the profit will be used, and to the determination of the ratios of dividends and gains margins to be distributed. Since the TCC does not set forth any quorum with respect to the decision on dividend distribution, if a higher quorum is not stipulated under the articles of association, the meetings will be held with the attendance of the shareholders or their proxies that correspond at least to one-fourth of the capital (TCC, Art. 419/2). The resolutions are taken by the ma- jority of the votes of the attendees at the meeting. Such resolution of general assembly is regarded as an innovative right 4 . Accordingly, upon the resolution of the general assembly, profits are transformed into dividends, and dividends may be distributed afterwards. Provisions regarding Dividend Distribution under the TCC In order for the general assembly to resolve dividend distribution, statutory and voluntary reserves must be allotted (TCC, Art. 523/1). 3 Hasan Pulaşlı , Şirketler Hukuku Şerhi ( Commentary on Companies Law ), Vol- ume II, First Edition, 2011, p. 1284. 4 Pulaşlı , p. 1285.