NEWSLETTER-2017

17 COMMERCIAL LAW Pre-emptive Right in Joint Stock Companies* Att. Ecem Cetinyilmaz Introduction In the case of a capital increase made from internal resources in joint stock companies, current shareholders acquire ipso facto the gratis shares in accordance with the ratio of their current shares to the company’s share capital. As to the capital increase through capi- tal subscription from external resources, each shareholder is entitled to acquire new shares in accordance with the ratio of his/her current shares to the company’s share capital. The objective of a pre-emptive right is to preserve the shareholder’s shareholding ratio in the com- pany 1 . Notwithstanding this principle, this right may be exceptionally restricted or removed. In this Newsletter, the nature of pre-emptive right, rules and procedures governing its exercise, and the motives for its removal or restriction, will be discussed in light of the decisions of the Swiss Federal Supreme Court and the Turkish Court of Appeals, and the pre-emptive right will be analysed within the context of the registered capital system. The Pre-emptive Right and Its Utilization Article 461 of the Turkish Commercial Code numbered 6102 2 (TCC) regulates the pre-emptive right in joint stock companies, as well as the principles regarding its exercise. Accordingly, a pre-emptive right is the right held by each shareholder to acquire new shares issued by the company in accordance with the ratio of his/her current shares * Article of April 2017 1 Ünal Tekinalp, Sermaye Ortaklıklarının Yeni Hukuku, Updated 3 rd ed., İstanbul, 2013, p. 306. 2 Official Gazette February 14, 2011, No. 27846. It has entered into force on July 1, 2012.