Amendments In The Communıqué Regardıng The Prıncıples On Venture Capıtal Investment Companıes By The Communıqué Serıal: Vı, No: 16
August 2010
- Founders and natural or legal persons who directly or indirectly held 10% or more of a corporation’s shares could not have outstanding tax debts in the original legislation. In the amended regulation, this condition is only imposed upon legal person founders and the disposition concerning the shareholders is repealed.
- Founders who held 10% or more of corporation’s shares provide the necessary sources free of collision, in the original legislation, in the amended regulation, leading shareholders are added to them and the said persons should have the financial strength to pay the subscribed capital. In addition to these, it should be noted that the said persons should have the required reputation for a shareholder of a capital investment trust.
- The requirements for the natural person shareholders are listed in two articles in the former text. These are not to be personally insolvent, not to be unlimitedly responsible partners in insolvent institutions, and they shall not announce concordat, and the reference done to the requirements listed at sub article (d) of first paragraph of Article 9 of the Communiqué Regarding Intermediary Activities and Intermediary Institutions. In the amended text, these conditions are required for the natural person founders and the conditions in the communiqué are includaed in the article with two differences. The first of these differences is that, while being contrary to legislation concerning lending activities was mentioned in the former text, in the latter one, the Capital Market legislation and the Banking Law are also added. The second difference is that the condition of not to be forbidden to make transactions pursuant to the Capital Market Law was required for the founders during the foundation and transfer of shares. In the latter text, there is no such limitation. However, it must be noted that the word “partners” is replaced by “founders”.
- The requirement of satisfaction of financial competence by leading shareholders of public institutions and of public legal persons and the legal persons serving for public interest is subject to their own legislation. However, it is also stated that financial tables and certified public accountant report will be taken as a base for evaluating the financial strength differently for the natural and legal persons. And finally, it is stated that in case of existence of several leading shareholders, the aforementioned conditions will be sought separately for each leading shareholder.
- A sub-article was added to the 7th article titled Foundation and Conversion Procedures. According to this sub-article, in foundation affairs, the registration of the Articles of Association with the trade register must be made no later than 1 month following the issuance of related Board permission; in conversion affairs, holding of the general assembly meeting, where the modification of articles of association will be approved, latest within 1 month following the issuance of related Board permission and registration of general assembly resolution to trade register latest within 15 days following the general assembly meeting are obligatory.
- In the 9th article titled Application for Registration, it is an obligation to apply to the Board for registration of all shares and for public offering of the shares which represent at least 20% of the issued capital of corporations of which issued capital is less then 20 million TRY and the shares which represent at least 10% of the issued capital of corporations of which issued capital is 20 million TRY or more.
- The communiqué also states that, “The corporations can be shareholders of venture firms within the framework of the provisions in this Communiqué” and that the founders must notify the agreements relating to investments and transactions, articles of associations of companies’, internal regulation and offering circular of funds and other documents shall be notified to the Board within six business days following investment.
- The members of Board of Directors, the general director, and the auditors must fulfill the conditions required of real person founders.
- The possibility of investment in money market for shareholders is accepted in order to diversify their portfolios. “In condition that the venture capital is limited to portfolio management activity it is possible to be engaged in portfolio management activity provided that they have license and related provisions in articles of associations; they may provide service as a market consultant in Istanbul Stock Exchange Emerging Institutions Market; the shareholders can not give securities, provide guarantee, and place pledge on the assets in the portfolio in favor of third parties.”
- The investments, done on condition that the risk resulting from investments done directly or indirectly to corporations established abroad with purpose of collective investment for investments on venture firms defined in the communiqué, shall be limited to capital amount directed, should not be more than 10% of portfolio value of investment date in former text, whereas in the latter text this rate is 30%.
- Investment restrictions are re-determined by considering various circumstances.
- The title of “Obtaining Consulting Service” was changed to “Procurement of Consulting Services and Portfolio Management Activity” and accordingly, the expression of portfolio management activity is included in the article.
- In the first sub-article of the 20th article of the Communiqué, the statement of “in the aforementioned agreement the possibilities of partial or total exit of corporation from the venture firm, pre-emptive right, joint sale, participation to sale, dividend politics, the options for sale and purchase of shares may be included” is inserted. As the third sub-article, “even the public companies may be accepted as venture firms on the condition that they satisfy the requirements of the second article. However, only the investments made to their shares which are not traded on the stock exchange may be considered as venture capital investment” is added.
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