ERDEM-NEWSLETTER-2018-metin

25 COMMERCIAL LAW count may be any kind of commission, proxy or performance contract , or have the characteristics of a mixed contract. For the application of the second paragraph, it is sufficient that the company carries the risk. The principal capital and registered capital systems as well as conditional capital increases , are within the scope of the provision. ” 8 Since share buybacks, or establishments of pledges over a com- pany’s own shares, in other words, acquisitions through transfers, are subject to Article 379 and the following Articles of the TCC, such acquisitions are not included within the scope of Article 388 of the TCC 9 10 . Violation of the Prohibition and Consequences thereof Pursuant to Article 388/3 of the TCC, in the event of violation of the prohibition of subscription for its own shares, founders and the members of the board of directors are deemed to have subscribed for such shares at the incorporation, and at the capital increase, respec- tively, and are liable for the share prices. From the standpoint of the company, subscription is invalid due to unlawfulness, and does not result in any legal consequences; the fact that these shares are deemed to have been subscribed for by the founders and members of the board of directors does not affect the invalidity against the company 11 . The same paragraph also regulates that the founders and the members of the board of directors, in capital increases, who evidence that they bear no fault in an unlawful subscription, shall be relieved of liability. Therefore, the TCC accepts a presumption of fault, and allows the said persons to be relieved of liability through evidencing faultlessness. The founders and the members of the board of directors, 8 Preamble of Article 388 of the TCC. 9 Preamble of Article 388 of the TCC. 10 Orak Çelikboya, Leyla : Share Buyback of Companies pursuant to the New TCC , Erdem&Erdem Newsletter, April 2012, http://www.erdem-erdem.av.tr/ publications/newsletter/share-buyback-of-companies-pursuant-to-the-new-tcc/ (Access date: 26 December 2018). 11 Preamble of Article 388 of the TCC.