NEWSLETTER-2020-metin

36 NEWSLETTER 2020 The first categorization regarding the veto rights is the source of the right. Article 421(2) of the Turkish Commercial Code (“TCC ”), grants every shareholder a right to veto by requiring unanimity for decisions on transferring the headquarters of a company abroad, and on raising the liability of the shareholders. Also, Article 462(3) of the TCC might be referred to above since it regulates the monetary capital increase without using the company funds. In all three cases referred to above, there is a right to veto arising from the law for each share- holder. Aside from raising the quorums, another preferred method, in practice, is to add a provision to the articles of association saying that the quorums shall not be deemed as met unless a certain group of shares is represented or the board member representing a certain group of shares is present. Contrary to a veto right that arises from the law, a contractual veto right is granted by a provision in the articles of association of the company or in the shareholders’ agreement. In this regard, if the will of a certain shareholder is to be decisive for a certain decision, a veto right should be granted for that specific decision, either in the articles of association, or in the shareholders’ agreement 3 . A contractual veto right might be granted for a certain share group or a certain shareholder. However, the preferred method would affect the legal nature of the veto right. A veto right that is stated in the ar- ticles of association is to be used before the general assembly, and which is to the advantage of a certain share group, is either a privilege or a raised threshold. Contrary to a raised threshold, if a right to veto is granted for a share group by the articles of association, then the af- firmative votes of the referred share group is necessary for a decision to be rendered, even if the thresholds are met. In this regard, the share group that has the veto right has a supe- rior right for a decision in the general assembly, since it may prevent the rendering of the decision. Thus, such veto right that is attached to a share group is defined as a privilege. 3 Altay , p. 492.