NEWSLETTER-2017

11 COMMERCIAL LAW Legal Requirements for Board of Director Membership of Joint Stock Companies* Prof. Dr. H. Ercument Erdem Introduction Article 363/2 of the Turkish Commercial Code 1 (“TCC”) regulates that if a member of the board of directors of a joint stock company is declared bankrupt, or such person’s legal capacity is restricted, or if a member loses the legal requirements or qualifications set forth under the articles of association necessary for membership, such person’s membership shall automatically terminate without the necessity of any further transaction. As per Article 359/4, reasons terminating a board of director’s membership also constitute a barrier for election. This Newsletter article examines the requirements set forth under special laws, as well as the consequences of not possessing such requirements, from the moment of election to the board of director’s membership. Election Barriers regulated under the Articles of Association In joint stock companies, shareholders could benefit from free- dom of contract within the limits of the TCC; in this respect, the Ar- ticles of Association could provide barriers or terms of competence for the election of boards of directors’ members. These barriers, or terms of competence, may be related to nationality, professional experience, age, or the business of the company. Barriers and terms of competence as foreseen under the Articles of Association are binding. * Article of May 2017 1 The TCC (Official Gazette, 14.02.2011, No. 27846) entered into force on 01.07.2012.