ERDEM-NEWSLETTER-2018-metin

15 COMMERCIAL LAW If share certificates are issued as proof certificates, it is clear that they do not qualify as negotiable instruments. Thus, in that case, the transfer of certificates is not necessary for the establishment of pledges. Only in the event that a transfer of the share certificates is stipulated as an additional requirement in the articles of incorporation, transfer of the certificates shall be necessary for the establishment of a pledge. The debate surrounds whether share certificates are qualified as negotiable instruments in the event they are issued as registered certifi- cates. In the reasoning of the TCC, it is stated that: “ Issuance of a regis- tered share certificate shall not facilitate transfer and thus circulation of the share. Provisions in Articles 595 and ff. of the Draft Law shall continue to be valid and prohibitions and limitations shall remain to exist. This possibility neither converts the share of the limited liability company into a joint-stock company share nor does it approximate it to a joint - stock company share. It only provides conveniences regarding proof and transfer of the share when there is a need (within the scope of provisions regarding limited liability company). Provisions that have to be written on the registered share under the second paragraph clearly demonstrate the dependence of the certificate on the articles of incorporation.” Even though in the event that the limited liability company share is issued as a certified share, the certificates shall not qualify as negotiable instruments in light of this reasoning, and there is no clear explanation stipulating otherwise in the text of the article. Therefore, there is diversity of views in the doctrine whether limited liability company shares shall qualify as negotiable instruments in the event they are issued as registered certificates. Conclusion Share pledges in limited liability companies are subject to regula- tions under the TCC and Civil Code. Depending on the approval of the general assembly, a dual separation is made in the pledge of the limited company shares. In the event of seeking approval of the gen- eral assembly for share pledges, they are subject to the TCC regula- tions regarding share transfers in accordance with TCCArticle 600(2). In cases where approval of the General Assembly is not sought, the general provisions of the Civil Code regarding pledge of rights shall apply.