NEWSLETTER-2017

24 NEWSLETTER 2017 Capital Increase through Internal Resources in Joint Stock Companies* Att. Ecem Cetinyilmaz Introduction In joint stock companies, capital increases can be made through capital commitment or internal resources. Capital increases through internal resources enable the conversion into capital of the reserve funds and freely-usable parts of the statutory reserves, the funds that are allowed by legislation to be added to the capital and included in the balance sheet. It was a notable absence, in the former Turkish Com- mercial Code numbered 6762, not to embrace this frequently used method. That being said, Turkish Commercial Code numbered 6102 1 (“TCC”) explicitly regulates this method under a separate article. This article examines the internal resources that are allowed by legislation to be added to the capital, as well as the procedures and conditions for capital increases through internal resources within the scope of the relevant provision. Resources Convertible into Capital Pursuant to Article 462/1 of the TCC, the capital can be increased through internal resources by way of conversion into capital of the reserve funds that are allocated by the articles of association or a gen- eral assembly resolution, not allotted for a specific purpose, the freely- usable parts of the statutory reserves and the funds that are allowed by legislation to be added to the capital and included in the balance sheet. The preamble of the article states that the internal resources specified in the article are not listed numerus clausus 2 . The funds * Article of September 2017 1 TCC (Official Gazette 14.02.2011, No. 27846) entered into force on July 1, 2012. 2 Preamble of Article 462 of the TCC.