ERDEM-NEWSLETTER-2018-metin

12 NEWSLETTER 2018 subject to the approval of the general assembly. In that case, provi- sions regarding share transfers shall apply to the share pledge. According to TCC Article 595, in the event it is not regulated otherwise in the articles of incorporation, the approval of the general assembly of shareholders is necessary for the validity of the share transfer. However, pursuant to TCCArticle 600(2), as opposed to TCC Article 595 1 , the general assembly may only refrain from granting ap- proval upon the existence of a just cause. Under TCC Article 616(2)(c), in cases where the approval of the general assembly is necessary for the establishment of the pledge, the right of granting approval is one of the non-assignable powers of the general assembly. In cases where the approval of the general assembly is sought, decisions are taken with the absolute majority of the votes represented in the meeting, in the event that no different quorum is stipulated in the articles of incorporation, according to TCC Article 620. Regarding the Rules of Prohibition and Limitation of Transfer . Regulations regarding prohibition and limitation of the share transfers are also valid for the pledge of the shares. As explained, above, the reasoning of TCCArticle 600 explicitly states that rules of prohibition and limitation of the share transfer shall also apply to share pledges. According to the reasoning, the prohibition of the share pledge is the regulation under Civil Code Article 954 and ff. as the receivable must be transferable for establishment of the pledge, according to Civil Code Article 954. According to TCC Article 596, in the event that the company does not approve the transfer of the capital share within three months after acknowledgement of the presence of the pledge, the pledge of the share that cannot be transferred shall be rendered impossible, as well. At this point, a change in the new TCC should also be mentioned with respect to the cases in which share transfers are restricted. As the limitation regarding acceptance of a limited liability company’s own 1 Under TCC Article 595, in the event the opposite is not stipulated in the articles of association, the general assembly of shareholders may not grant an approval to a share transfer without giving justification.