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Editorial

Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Simplified Mergers in Turkey under Turkish Commercial Code

Merger, in general, is a complex procedure which requires detailed and long formalities. Simplified merger creates an option for the joint stock companies to merge in a faster way without being subject to certain transactions.

Transfer of Türk Telekom Shares owned by OTAS is completed

Within the scope of the restructuring of the loans obtained by Ojer Telekomünikasyon A.Ş. (OTAŞ) in 2013 and 2014, the transfer of the shares owned by OTAŞ, representing 55% of Türk Telekomünikasyon A.Ş.’s (Türk Telekom) issued share capital by a special purpose vehicle  incorporated directly or indirectly by the creditors was completed on 21st of December, 2018.

Arrest of Ships under Turkish Law

The general principles on maritime enforcement are set out in Turkish Commercial Code ("TCC") numbered 6102. On the other hand, Turkey has ratified the International Convention on Maritime Liens and Mortgages, signed in Geneva on 6 May 1993 and the International Convention on the Arrest of Ships, signed in Geneva on 12 March 1999 and both conventions have been come into force on 25 March 2017. The provisions of these two conventions have already been taken into consideration by the drafting committee of the code, and the relevant provisions have been incorporated into the TCC in preparing the same. This newsletter reviews the principles and provisions stipulated in the TCC for the arrest of ships.  

Share Pledges in Joint Stock Companies

Share pledges in joint stock companies are not specially regulated under the Turkish Commercial Code ("TCC"). Therefore, the provisions of the Turkish Civil Code that regulate the general rule regarding pledges, shall apply. Under Turkish Civil Code Article 954, transferable receivables and other rights may be subject to pledge. The pledge established on a share in joint stock companies is a "pledge right established on the right." A pledge is established on shareholding rights. A pledge on receivables and rights is subject to the principles of movable pledges. (Turkish Civil Code Article 954/2).

Updated FIDIC Contracts

International Federation of Consulting Engineers that is known by the abbreviation of FIDIC (Fédération Internationale Des Ingénieurs-Counseils) launched updated Red Book (the Conditions of Contract for Works of Civil Engineering Construction), Yellow Book (the Conditions of Contract for Plant and Design-Build)) and Silver Book (the Conditions of Contract for EPC/Turnkey Projects) in the "International Contract Users Conference," organized in London in December of 2017...

The General Data Protection Regulation in Force

The General Data Protection Regulation ("GDPR" or "Regulation")1 that was approved by the European Union ("EU") Parliament and entered into force in 2016 has started to be applied as of May 25, 2018. The GDPR lays down rules relating to the protection of natural persons ("data subjects") with regard to the processing of personal data, and rules relating to the free movement of personal data. With this Regulation, it is intended to protect the privacy of the data subjects more strictly, and to reorganize data privacy laws across Europe. Also, it is worth to note that, international companies, as well as Turkish companies, are under the obligation to comply with the GDPR, provided that their activities fall under the scope of the GDPR.

Scope of the GDPR...

General Information on Registration to the Data Controllers Registry and the Decision of the Persona

Law on the Personal Data Protection numbered 6698 ("Law") was accepted on 24 March 2016 and entered into force, except for certain articles that are reserved, through publication in the Official Gazette dated 7 April 2016 and numbered 29677...

Court of Appeals Sheds Light on “Just Cause” for Termination, Exit Right and Squeeze-out

The Court of Appeals Sheds Light on "Just Cause" for Termination, Exit Right and Squeeze-out of Shareholders

"Just cause" is a term that is used frequently under the Turkish Commercial Code No. 6102 ("TCC"). In broad terms, "just cause" may be defined as a situation in which the relationship between a shareholder and the company and/or between a shareholder and other shareholders becomes unbearable or untenable for valid legal reasons.

AMENDMENTS TO TURKISH FX RULES RE. CONTRACTS DENOMINATED IN FOREIGN CURRENCY

November 2018 - Corporate & Commercial. Legal Developments by Diri Legal.

More articles by this firm.

2018 has been a turbulent year in the Turkish economy and by extension significant changes has taken place in the Turkish foreign exchange rules which was mainly triggered by the recent overshooting in the foreign exchange rates against Turkish lira.

Restrictions on Use of Foreign Currencies in Certain Agreements between Turkish Residents

The Presidential Decree dated September 12, 2018, on the Amendment of Decree No. 32 on the Protection of the Value of the Turkish Lira ("New Decree"), introduced significant restrictions on the use of foreign currencies in certain agreements between Turkish residents. Below, we explain the scope of the New Decree and discuss possible issues and problems that may arise in relation to the implementation of the New Decree. We also assess the potential effects of the Communiqué (2018/32-51) on the Amendment of the Communiqué on Decree No. 32 on the Protection of the Value of the Turkish Lira (2008/32-34) ("Communiqué"), which was published in the Official Gazette on October 6, 2018, and lists the exceptions to the restrictions imposed by the New Decree.

Trust Liability in terms of Groups of Companies

Article 209 of Turkish Commercial Code No. 6102 ("TCC") has set forth obligations that are subject to damage caused by the trust and reputation of the parent company, as created with society and the consumer. Accordingly, "in the event that the reputation of the parent company and the group of companies reaches a certain level which provides trust to society or the consumer, the parent company is liable for the trust created by utilization of this reputation".

Capital Markets Board Issues an Official Announcement on Initial Coin Offerings and Crowdfunding

The Capital Markets Board ("CMB") issued an announcement on September 27, 2018, on its website and addressed the much-disputed status of digital tokens and Initial Coin Offerings ("ICO"). In this announcement, the Capital Markets Board stated that it does not regulate or supervise ICOs, and also noted that it does not regulate or supervise most practices in which blockchain technologies are being used, such as cryptocurrency offerings and token offerings.

Recent Measures to Support Financial Stability in Turkey

The Banking Regulation and Supervision Authority (the “BRSA”) and the Central Bank of the Republic of Turkey (the “Central Bank”) introduced certain legislative changes, to support financial stability and sustain the effective functioning of markets, following the plunge in the value of Turkish Lira.>

Non-liability of the Shareholders and Piercing the Corporate Veil

1.      Introduction

A legal entity is defined as "groups of persons organized as entity on its own and independent property groups constructed for special object" under Article 47 of the Turkish Civil Code No. 4721 ("TCC"). Under Turkish laws, legal entity owns its assets; such assets are dedicated to the purposes of the legal entity and legal entity is liable only with such assets. Legal entity is entitled to be part to the legal transactions as an independent person, separately from its founders and is liable for such transactions against third parties.

Likely, shareholders of joint-stock companies ("Company") are not responsible for any transaction of the Company but the Company itself is responsible for such transactions. Liability of the shareholders of the Company is limited and no additional liability can be set forth against the shareholders. This constitutes "the principle of separation" between the shareholders and the Company and "a veil" between the shareholders and third parties. In some cases, the shareholders of the Companies may benefit from this separation, damage the Company and third parties by hiding behind the independent structure of the Company. The theory of piercing the corporate veil which has been first introduced and developed by the American Laws has been then accepted and applied by Turkish courts in order to prevent misuse of the principle of separation.

This theory aims to prevent inequitable result derived by the persons hiding behind the Company by lifting the corporate veil.

Non-liability of the Shareholders and Piercing the Corporate Veil

1.      Introduction

A legal entity is defined as "groups of persons organized as entity on its own and independent property groups constructed for special object" under Article 47 of the Turkish Civil Code No. 4721 ("TCC"). Under Turkish laws, legal entity owns its assets; such assets are dedicated to the purposes of the legal entity and legal entity is liable only with such assets. Legal entity is entitled to be part to the legal transactions as an independent person, separately from its founders and is liable for such transactions against third parties.

Likely, shareholders of joint-stock companies ("Company") are not responsible for any transaction of the Company but the Company itself is responsible for such transactions. Liability of the shareholders of the Company is limited and no additional liability can be set forth against the shareholders. This constitutes "the principle of separation" between the shareholders and the Company and "a veil" between the shareholders and third parties. In some cases, the shareholders of the Companies may benefit from this separation, damage the Company and third parties by hiding behind the independent structure of the Company. The theory of piercing the corporate veil which has been first introduced and developed by the American Laws has been then accepted and applied by Turkish courts in order to prevent misuse of the principle of separation.

This theory aims to prevent inequitable result derived by the persons hiding behind the Company by lifting the corporate veil.

Recent Developments on the Enforcement and Bankruptcy Law and Concordat

Introduction

A significant part of the recent legislative amendments to improve the investment environment are made to Enforcement and Bankruptcy Law (“EBL”) numbered 2004. The amendments made within the scope of Law numbered 7101 on the Amendments in Enforcement and Bankruptcy Law and Certain Laws[i] (“Law numbered 7101”) and the Law numbered 7078 on the Ratification of the Statutory Decree on Certain Regulations within the Scope of State of Emergency with Alterations[ii] (“Law numbered 7078”) shall be addressed.

[i]              Official Gazette (OG), No. 30361, March 15, 2018.

[ii]             OG, No. 30354, March 8, 2018 (bis).

Regulatory Approaches to Crowdfunding in European Union

Introduction

Crowdfunding has finally entered into Turkish legislation through Omnibus Law no. 7061 dated 5 December 2017, by way of amending certain provisions of Capital Market Law numbered 6362. Although the amendments cover the mainframe of crowdfunding in a very basic form, detailed secondary legislations and policies are needed to implement crowdfunding as a successful system. In anticipation of the secondary legislation it would be beneficial to look at the regulatory approaches to crowdfunding within European Union (EU) Member States and United Kingdom (UK).

Management of Information Systems

Introduction

As stated under Article 128 of Capital Markets Law No. 6362[i] (“Capital Markets Law”), one of the duties of the Capital Markets Board (“CMB”), among others, is to determine the procedures and principles for the supervision and operation of the management of the information systems of capital markets institutions, publicly held companies, stock exchanges and self-regulatory establishments. To this end, based on the provisions of the Capital Markets Law, Communiqué on the Management of the Information Systems (VII-128.9) (“Management Communiqué”), together with the Communiqué on the Independent Auditing of Information Systems (III-62.2) (“Auditing Communiqué,” Management Communiqué, and the Auditing Communiqué, shall collectively be referred to as the “Communiqués”) have been published in the Official Gazette dated 5 January 2018 and numbered 30292. Both the Management Communiqué and the Auditing Communiqué have entered into force with their publication in the Official Gazette. While the procedures and principals applicable to the management of the information systems for the listed establishments therein are determined under the Management Communiqué, independent auditing of information systems is further regulated under the Auditing Communiqué. This article will mainly focus on the scope of the Management Communiqué, innovations introduced thereunder, especially the obligation to keep the systems in the Republic of Turkey and, finally, the sanctions.

[i] Capital Market Law numbered 6362, OG, No. 28513, December 30, 2012.

MiFID II and its Eventual Impacts on Turkey

The financial crisis of 2007–2008, which is considered by many economists to have been the worst since the Great Depression of the 1930s, has exposed weaknesses in the transparency of the financial markets. In order to restore investor confidence, strengthen transparency, and improve the functioning of the internal market for financial instruments, the European Union (“EU”) has started to draft a new regulatory framework for financial markets following the financial crisis. After seven years in the making, the Markets in Financial Instruments Directive II 2014/65/EU, and Markets in Financial Instruments Regulation 600/2014 (hereinafter together referred to as the “MiFID II”) entered into force on January 3, 2018.

As outlined, above, the new legislation includes both a directive and a regulation. While the regulation has a direct effect within the EU, the directive is to be applied by the member states in national law where there may be national discretion. This article aims to focus on the key aspects of the MiFID II and its eventual impact on third country firms i.e. on Turkey.

Significant Amendments and Novelties to Turkish Capital Markets Legislation

Turkey: Significant Amendments and Novelties to Turkish Capital Markets Legislation during the First Half of 2018

This article will address significant amendments and novelties introduced for Turkish capital markets legislation during the first half of 2018 as in line with specific needs and interests of public and private institutions, companies, shareholders and/or investors being subject to such legislation.

Turkey Moves to Improve the Investment Environment

I.    Introduction

The Law on the Amendment of Certain Laws for the Improvement of the Investment Environment No. 7099 ("Law") was published in the Official Gazette last month (March 10, 2018) and introduced significant amendments to various laws, including the Turkish Commercial Code No. 6102 ("TCC"), the Tax Procedural Law, the Law on Legal Fees and the Law on Movable Property Pledges in Commercial Actions.

OBLIGATION TO EMPLOY OR CONTRACT A LAWYER ON CONTINUOUS BASIS FOR JOINT STOCK COMPANIES IN TURKEY

Joint-stock companies with a registered capital equal to 5 (five) times or more of the minimum amount stipulated in Article 272 of the Turkish Commercial Code and building cooperatives with a membership number of 100 (one-hundred) or more are obliged to have/employ a contracted lawyer. Legal entities failing to comply with the provisions of this paragraph will be penalized by public prosecutors with a fine in the gross amount of one month’s minimum wage, effective for workers in the industrial sector older than sixteen years of age on the date of the crime, for each month spent without a lawyer under contract.

Crowdfunding Legislation Introduced in Turkey

I - Introduction

On December 5th, 2017, with the Omnibus Bill No. 7061 published on the Official Gazette, the Capital Markets Law No. 6362 ("Law") is amended in a way to pave the way for the financing tool "crowdfunding" in Turkey. As per the changes introduced under Articles 3, 4, 16, 35/A and 99 of the Law, Turkey is now one of the few countries which governs crowfunding in its domestic legislation. The Turkish Capital Markets Board ("Board") is now authorized to regulate crowdfunding and license crowdfunding platforms in accordance with the legislation. The Board is also authorized to enact the secondary legislation for crowdfunding.

The idea behind the amendment is encouraging investment in start-ups by way of building a bridge between small-scaled funders and start-ups through online crowdfunding platforms.

Our article hereby summarizes how crowdfunding works and the principles under the Law.

Launch of the Legislative Framework for Interest-Free Insurance Systems

Within the context of the 10th Development Plan of the Ministry of Development and the 64th Government Program, aiming to develop interest-free finance mechanisms, the Banking Regulation and Supervision Agency is currently working to finalize a draft bill regulating the interest-free financing principles under a single roof. As part of such initiative, the Regulation on Principles and Procedures relating to Participation Insurance (the “Regulation”) was published in the Official Gazette on September 20, 2017. The Regulation has entered into force 3 months following its publication; i.e., on December 20, 2017.

NON-DELIVERY PLEDGES OVER MOVABLES

Law on Pledges over Movable Property in Commercial Transactions No. 6750 is published in the Official Gazette No. 29871 and dated October 28, 2016 and entered into force as of January 1, 2017. Law on Pledges over Movable Property in Commercial Transactions No. 6750 abolished the Commercial Enterprise Pledges Law No. 1447 and dated July 21, 1971 and introduced many new innovations to movable pledges. However, Commercial Enterprise Pledges Law No. 1447 will remain applicable for commercial enterprise pledges that are already established before 1 January 2017.

There are some similar implementations between immovable pledges (mortgages) in the Turkish Civil Code and non-delivery movable pledges in commercial transactions. The main purpose of this law could be stated as to increase the use of non-delivery movable pledge rights as assurance and facilitating the access to sources of financing for the Small Medium Enterprise’s (“SME”)

Special Audit in Joint Stock Companies

I.         Introduction

In joint stock companies, there are three types of audit mechanism, namely (i) statutory audit, (ii) optional audit and (iii) special audit.

In accordance with the Turkish Commercial Code No. 6102 ("TCC"), all joint stock companies are subject to statutory audit. Said article stipulates that statutory audit is conducted pursuant to article 398 of the TCC and the relevant regulation ("Regulation") to be introduced by Ministry of Customs and Trade and the Council of Ministers, as the case may be.

Turkey Amends its Advertisement Regulation

Turkey's main regulation regarding advertisements, the Regulation on Commercial Advertisement and Unfair Commercial Practices ("Regulation") was amended with another regulation published on the Official Gazette of 4 January 2017, effective immediately. Those who advertise their products and services, advertisement agencies and the media that publishes such advertisement should abide by the Regulation.

Legal Due Diligence: Most Common Vulnerabilities of Turkish Companies

Although it is difficult to provide one global definition for the term "due diligence", we are going to use it below in the sense of an examination, through which a prospective buyer would obtain information about the target entity.  The need for a due diligence usually arises in the context of a takeover, be that an asset deal or a share deal, or it may sometimes be simply utilized for internal purposes. Our discussion below is based on the context of a share deal.

REINSURANCE & REINSURANCE INVESTMENTS BY INTERNATIONAL COMPANIES IN TURKEY

The laws and regulations governing the insurance and reinsurance practices in Turkey are quite complex, since the principles and provisions governing the insurance and reinsurance practices are set forth at different laws, regulations and communique, including Turkish Commercial Code No.6102 dated January 13, 2011 (hereinafter referred as Law No.6102), Insurance Law No.5684 dated June 3, 2007 (hereinafter referred as Law No. 5684), Regulation Regarding Consideration of Capital Adequacy of Insurance, Reinsurance and Pension Companies published at Legislative Journal dated January 19, 2008 and No. 26761 (hereinafter referred as Regulation Regarding Capital Adequacy 2008) and the Regulation Regarding Consideration of Capital Adequacy of Insurance, Reinsurance and Pension Companies published at Legislative Journal dated August 23, 2015 and No. 29454 (hereinafter referred as Regulation Regarding Capital Adequacy 2015).

Financially Distressed Companies under Turkish Commercial Code

Introduction

To provide a definite scope of what is stipulated under law, thus what we will delve into in this article, the starting point would be to define what would constitute a financially distressed company.

Installment Sales

The Regulation About Installment Sales ("The Regulation") entered into force by being published in the Official Gazette on 14th January 2015. Although the title is 'installment sales'; the main subject of the Regulation is financial leasing agreements. It is important to be careful not to confuse the installment sales with the prepaid sales. In prepaid sales the buyer have the possession of the sold movable property after completing the payment. However in installment sales the buyer gets the property immediately and then makes the payment. Moreover the sales made by credit cards are not the subject of this Regulation.

 

Protection of Creditors and Employees and Personal Liabilities of Shareholders in Mergers

Synergies and increase in the assets of the merging companies are aimed at mergers. However, a merger may at the same time result in the increase of the liabilities of the merging companies. Further, in some cases the financial standing of the absorbed company in a merger may not even show positive figures thus such a merger may present a potential risk on the creditors of especially the surviving company. Due to the fact that creditors of the merging entities do not have a veto right against a merger, there arises the need for a specific protection tool for the creditors. A merger may also negatively affect the employees of the merging entities, again especially the ones of the absorbed company. On the other hand, "over-protection" may defeat the purpose of the merger concept so a fairly balanced protection mechanics is essential. This article focuses on the means of protection of creditors and employees, and personal liabilities of shareholders in mergers, as regulated by the Turkish Commercial Code ("TCC").

The Principles And Procedures To Apply To Factoring Transactions

The Banking Regulation and Supervision Authority ("BRSA") of Turkey published the Regulation on the Principles and Procedures to Apply to Factoring Transactions (the "Regulation") in the Official Gazette on February 4, 2015.

The Regulation provides the principles and procedures that shall be applied by the factoring companies and banks for their factoring transactions. The Regulation is issued based on article 1, second paragraph of article 9 and first paragraph of article 38 of the Financial Leasing, Factoring and Financing Companies Law dated 21.11.2012 (Law No: 6361).


Installment Sales

The Regulation About Installment Sales ("The Regulation") entered into force by being published in the Official Gazette on 14th January 2015. Although the title is 'installment sales'; the main subject of the Regulation is financial leasing agreements. It is important to be careful not to confuse the installment sales with the prepaid sales. In prepaid sales the buyer have the possession of the sold movable property after completing the payment. However in installment sales the buyer gets the property immediately and then makes the payment. Moreover the sales made by credit cards are not the subject of this Regulation.

The Principles And Procedures To Apply To Factoring Transactions

The Banking Regulation and Supervision Authority ("BRSA") of Turkey published the Regulation on the Principles and Procedures to Apply to Factoring Transactions (the "Regulation") in the Official Gazette on February 4, 2015.

The Regulation provides the principles and procedures that shall be applied by the factoring companies and banks for their factoring transactions. The Regulation is issued based on article 1, second paragraph of article 9 and first paragraph of article 38 of the Financial Leasing, Factoring and Financing Companies Law dated 21.11.2012 (Law No: 6361).


Corporate Governance Tips for Mergers & Acquisitions

I. Introduction

This article is prepared for demonstrating the role corporate governance issues play in mergers & acquisitions ("M&A"). The term "corporate governance" can be briefly defined as rules introduced by the articles of association of companies, regulations on representation and binding of a company, and mandatory rules of law, which regulate the day-to-day activities, relations between the shareholders, responsibilities and obligations of the directors as well as the shareholders. A provision in the articles of association of the target company in an M&A transaction may derail the contemplated transaction. Moreover, following completion of the transaction minority or majority shareholders and directors may face difficulties and be restricted in running the operations of the company. For these reasons, it is very important to be able to plan the closing and post-closing corporate governance issues of the target company in an M&A transaction.

Legal Framework on Advertising and Promotion of Medical Devices

As of May 15th, 2014, the healthcare industry has welcomed a much anticipated legislation after the Regulation on Sale, Advertising and Promotion of Medical Devices ("Regulation") covering the sale, promotion and advertising activities of medical devices has entered into force upon its publication on the Official Gazette. 

Fiduciary Duties and Responsibilities of Members of Board of Directors and the Exception thereto

Members of board of directors ("board"), i.e. corporate body of a joint stock company having representative and executive authority, have to either act in a certain way or abstain from certain actions, while acting in a board member capacity. According to the new Turkish Commercial Code numbered 6102 ("TCC"), a board member shall; (i) act in person, (ii) act diligently (iii) be loyal to the company and (iv) treat the shareholders equally.[1] While these are generally referred to as the duties of board members, liabilities imposing board members to abstain from certain activities are referred to as restrictions. 

A company, with the articles of association, may also introduce duties regarding its board members other than those stipulated above. On the other hand, there is a certain exception to the duty of diligence and loyalty, details of which will be provided below.

This article aims to provide a brief outline of the fiduciary duty of diligence and loyalty of the board members and the amendments brought by the TCC.


[1] Tekinalp, Unal, Sermaye Ortaklıklarının Yeni Hukuku, Istanbul, 2013, p. 240.

Re-employment Lawsuits

The Labor Law numbered 4857 regulates the relationship between the employee and the employer. In this article the re-employment lawsuits will be explained in the light of Turkish Law.

In accordance with the Labor Law; if the employer terminates the employment contract for an invalid reason, the employee may sue the employer. There are some necessary conditions to file a re-employment lawsuit.

       i.         The employee should be working as defined under the Labor Law,

     ii.         The indefinite term employment contract between the employer and the employee,

    iii.         Termination of the employment contract by the employer,

    iv.         Invalid reason for the termination,

      v.         The employee’s six months work in the workplace,

    vi.         At least 30 or more employees should be working in the workplace,

   vii.         Termination based on an invalid reason,

 viii.         Not being a representative of the employer.

Besides these, the employee must file a re-employment lawsuit within one month following the date of receiving the notice of termination letter. On the other hand, the employer is obliged to prove that the termination based on a valid reason. However the burden of proof is on the employee if the employee claims that the termination is based on a different reason from the reason given by the employer for termination.

According to the accelerated trial procedure, the case must be concluded within two months. In case of an appealed decision, the Court of Appeal gives the final decision within one month.

The employee may request to return to work and the termination to be invalidated. The court examines the re-employment terms and termination reasons. In case the court concludes that the termination is based on an invalid reason, the employee is obliged to re-engage the employee or be liable to pay the compensation.

The employee should apply to the employer within 10 working days from the notice of court decision. Subsequently the employer should re-engage the employee within one month from this application. If the employee does not make any application within ten days, termination will be deemed to valid. As we mentioned, if the employer does not want the employee start to work, the employer will pay the compensation. This compensation is not less than the employee’s four months wages and not more than the employee’s eight months wages.

If the case is dismissed, the employee is liable for the legal expenses. At this point, the employee may request the unpaid severance and notice pay and other fees from the employer with a separate lawsuit.

Consequently if the employee has the conditions for re-employment lawsuits and the termination of the employment contract is based on an invalid reason, the Labor Law allows employees to be re-employed and to be paid compensations for days off.

 

Profits Generated from Shares Acquired without Cost


Introduction General Communiqué on Corporate Tax Law Nr. 1 - Section 5.6.2.4.3 Status of the Profits Generated from Shares Acquired without Cost ("General Communiqué") regulates Corporates who acquired shares without cost by Capital Increase transactions carried out through using profit reserves.

Abuse of Dominance on Dependent Companies under Turkish Commercial Code

 

  I. Introduction 

 

The concept of "dominance" is newly introduced to Turkish commercial law by article 202 of the new Turkish Commercial Code, which entered into force on July 1, 2012 ("TCC

 

"). The concept emphasizes the principle of "rule of law" and introduces a new dimension to liability of corporations and their corporate bodies. Article 202 of the TCC provides that a "dominant company" shall not exercise its control on the "dependent company" in a way that would cause the latter to incur losses.

 

Board Member Liabilities Under Turkish and Belgian Laws

August 2014 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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Considering the significant role endorsed by board members within companies, it is important that directors know in which situations they may encounter civil or criminal liabilities for their actions. In general, the rules regarding the responsibilities of board members are part of corporate governance code of conduct. However, in many countries such as Turkey and Belgium liability rules applying to directors are integrated within the legislation directly. This brief information note targets to summarize the liabilities of the members of the boards of directors of the capital companies in Turkey and in Belgium. 

Payment & Security Settlement Systems and E-Money Insutitions in Turkey

August 2014 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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The law regulating electronic money (e-money) and electronic payments (e-payments) in Turkey, namely the Law on Payment and Security Settlement Systems, Payment Services and Electronic Money Institutions No. 6493 (the "Law") entered into force as of June 27, 2013 following publication at the Official Legal Journal (Gazette) dated June 27, 2013 and No. 28690.

This Law introduces a new regulatory framework which covers the procedures and principles of payment and security settlement systems, payment services, payment institutions and electronic money institutions. Within its framework, it establishes new definitions and licence requirements, which will require certain organisations to take further action in order to achieve regulatory compliance for the purposes of providing e-money services.

Limited Company Expenses in Turkey

1. Limited Companies Establishment Expenses

Limited companies can be established by at least 1 real person or legal entity with a minimum capital of TL 10.000 (app. EUR 3.300-3.400) ¼ of the capital shall be paid in advance and blocked. Remaining ¾ of the capital shall be paid within 24 months. The expenses for establishment of a limited company are as follows:

 

·       Translation and notarization of foreign company documents: EUR 500 - 1.000 (depends on the number of pages that will be translated into Turkish)

 

·       Notarization of articles of association of the company: around EUR 550 - 600.

 

·       Company books and notarization of the books: around EUR 200

 

·       Competition Board fee: 4/10.000 of the capital needs to be paid as competition board fee

 

·       Registration fee: Company's registration at the Trade Registry Office and publishing of the registration at the Official Trade Registry Gazette. EUR 650

 

·       Miscellaneous expenses: around EUR 300

 

There will be also expense for notarization, apostille, translation expenses of the mother foreign company documents which will be done in its own jurisdiction. Therefore we cannot give an estimate. 

Capital Movements Circular

The Central Bank of the Turkey announced several amendments to the Capital Movements Circular with the Circular numbered 2013/YB-7 dated 29.03.2013. According to the new legislation, in case a Turkish company with foreign shareholders intends to increase its capital, the money sent by the foreign shareholders shall be recorded in the books as the "capital increase amount" instead of "capital advance" until the registration of the capital increase to the Trade Registry Office.

LIAISON OFFICES IN TURKEY

Liaison offices are regulated in the Foreign Direct Investment Law ("FDI") numbered 4875 and Regulation for Implementation of Foreign Direct Investment Law ("RIFDI") issued based on FDI. According to article 3(h) of the RIFDI, the Undersecreteriat of Treasury ("Undersecreteriat") is authorized to permit foreign companies established under the laws of foreign countries to open liaison offices, provided that they do not engage in commercial activities in Turkey. In other words, liaison offices cannot engage in income generating activities. Liaison offices do not have any aspects other than salary payments made to the employees working in these offices.

SQUEEZE-OUT RIGHT IN PUBLIC COMPANIES -- TURKEY

July 2014 - Corporate & Commercial. Legal Developments by Paksoy.

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Squeeze-out and sell-out rights in Turkish public companies are regulated by the Communiqué on Squeeze-Out and Sell-Out Rights (the "Communiqué") published in the Official Gazette dated 2 January 2014 effective as of 1 July 2014. The Communiqué was issued by the Capital Markets Board of Turkey (the "CMB") in accordance with the Capital Markets Law and regulates the right to squeeze-out minority shareholders by the controlling shareholder and the minority shareholders' rights to exit the public company by selling their shares to the majority shareholder.

 

Below are the highlights of the Communiqué in relation to the squeeze-out right:

Establishing a company in Turkey

According to the "new" Turkish Commercial code, which has entered into force on 1st of July 2012 after being published on the Official Gazette on 30th of June 2012, there have been several changes made regarding establishing companies, its requirements and their specifications in Turkey. 

 

Commercial Company Types in Turkish Law

Types of the commercial companies are determined in Turkish Commercial Code. The types of the companies can be defined in two categories, which are capital companies such as Joint Stock Companies, Limited Companies, Commandite Companies that has its capital divided into shares and partnership companies such as Collective Companies and Commandite Companies. In this memorandum we will briefly introduce all types of companies available in Turkish law. However, our main focus will be on limited and joint stock companies, which are the most preferred ones in practice.

 

Limited or Joint Stock Company?

One of the most frequently asked questions of foreign investors establishing a company in Turkey is "Joint Stock Company or Limited Company?" In practice, the number of registered Joint stock companies is less than the number of registered Limited companies. According to the Trade Registry records, around 80% of all registered companies to trade registry are limited companies. However, the total capital of all joint stock companies is more than the total capital of Limited Companies. 

Independent Audit of Companies

COUNCIL OF MINISTERS DECISION REGARDING THE INDEPENDENT AUDIT OF COMPANIES

Turkish Commercial Code ("TCC") dated 13.01.2011 and numbered 6102 introduces significant provisions regarding good management and internal and independent audit that are to be applied to capital stock companies. The council of ministers decision ("decision"), concerning the determination of the companies which are subject to independent audit, is published on the Official Gazette dated 23.01.2013 and numbered 28537. This decision specifies the procedures and principles for companies which are subject to auditing in the scope of the TCC article 398.

 

Liquidation of Companies in Turkish Law

There are several reasons that a company becomes terminated in Turkish law. However, to complete the termination of a company, liquidation or bankruptcy procedures needs to be accomplished. 

 

OBLIGATION TO MAINTAIN COMPANY WEBSITES UNDER THE NEW TURKISH COMMERCIAL CODE

The (New) Turkish Commercial Code No. 6102 dated July 1, 2012 ('the Law') implemented a number of provisions and brought additional obligations for capital companies. One of such obligations set forth by the Law is the obligation to have a dedicated website. According to Article 1524 of the Law, all capital companies subject to auditing are also required to open a dedicated internet website and publish certain information. 

How to Incorporate in Turkey

Non-resident companies and/or foreign individuals may choose to enter into Turkish market through incorporation of a commercial entity. Find below a summary of relevant information regarding available company types, branches and liaison offices. 

Obligation to Maintain Company Websites Under The New Turkish Commercial Code

January 2014 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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OBLIGATION TO MAINTAIN COMPANY WEBSITES

UNDER THE NEW TURKISH COMMERCIAL CODE

 

ADMD Law Office

Ali Yurtsever

 

Overview

The (New) Turkish Commercial Code No. 6102 dated July 1, 2012 ('the Law') implemented a number of provisions and brought additional obligations for capital companies. One of such obligations set forth by the Law is the obligation to have a dedicated website. According to Article 1524 of the Law, all capital companies subject to auditing are also required to open a dedicated internet website and publish certain information. 

Assessing Compliance Measures in Emerging Markets: The Turkish Example

Compliance and risk management issues in evolving markets are becoming pressing concerns in many emerging markets where legislation on various fields of law is not yet entrenched in comparison to developed countries. Together with a growing awareness of building and implementing robust compliance programs, the necessity of complying with local laws is a top priority for companies operating in and willing to invest in an emerging market country. This holds true for Turkey.

Client Alert: NEW COMMUNIQUÉ ON REAL ESTATE INVESTMENT COMPANIES

The Capital Markets Board of Turkey ("CMB") has recently published a new Communiqué On The Principles Regarding Real Estate Investment Companies (III-48.01) ("Communiqué").  The main changes it brings to the old communiqué which was in effect since 1998 can be summarized as follows:

client_alert-_new_communiqu_on_real_estate_investment_companies

Client Alert: COMPANIES MUST NOW BE ONLINE ACCORDING TO THE NEW WEBSITE REGULATION

The New Turkish Commercial Code required under Article 1524 certain companies[1] ("Company") to have a website. The Regulation on Company Websites ("Regulation"), referred by the same Article has entered into force on May 31, 2013.



[1] http://ersoybilgehan.com/DC/Files/ae559fa267ec40beade1b2066098d5fd.pdf

client_alert-company_websites

Client Alert: MOST RECENT AMENDMENTS TO THE TURKISH COM MERCIAL CODE

The Law Numbered 6455 Regarding Amendments to the Customs Law and Other Laws and Statutory Decrees ("Law No 6455") entered into force on 11 April 2013 amending some provisions under the Turkish Commercial Code numbered 6102 ("TCC").

Obligation to have Committees within the Board of Directors of Kazakhstan Joint-Stock Companies

February 2013 - Corporate & Commercial. Legal Developments by Olympex Advisers.

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Pursuant to the Law of Kazakhstan «Concerning Introduction of Amendments and Modifications in Certain Legislative Acts of the Republic of Kazakhstan Regulating Banking Activity and Financial Organisations with respect to Risk Minimisation» dated 28 December 2011 (the «Law of 28/12/2011») a number of amendments were made to the joint-stock company legislation, including Article 53-1 of the Law of Kazakhstan «On Joint-Stock Companies» (the «JSC Law»), which regulates the creation and proceedings of the committees of the board of directors:

Client Alert : INDEPENDENT AUDIT UNDER THE TURKISH COMMERCIAL CODE AND THE NEWLY PUBLISHED DECREE

Auditing of companies has become a significant issue in a globalizing world. Auditing is no longer regarded as a matter which can only be subject to domestic law. Independence of auditors, auditing of auditors and preventing auditors to render any other service other than auditing are amongst the hot topics still debated in the European Union (EU). With the entry into force of the Turkish Commercial Code numbered 6102 of 2011 (Code) on 1 July 2012, a salient step was taken for modernizing the auditing system by introducing principles similar to those existing under the EU regulations.

INNOVATIONS IN THE BOARD OF DIRECTORS OF JOINT STOCK COMPANIES

Provisions of the New Turkish Commercial Code (“New TCC”) concerning the Board of Directors (“BoD”) are found among the provisions that have been significantly modified.

INNOVATIONS IN THE NEW TURKISH COMMERCIAL CODE CONCERNING THE AMENDMENTS OF...

THE ARTICLES OF ASSOCIATION - II

Provisions concerning the amendment of the articles of association (“AoA”) were subject to extensive modifications within the New Turkish Commercial Code (“New TCC”). 

INNOVATIONS IN THE NEW TURKISH COMMERCIAL CODE CONCERNING

THE AMENDMENTS OF THE ARTICLES OF ASSOCIATION - I

In joint stock companies, amendments of the articles of association (“AoA”) are of significant importance, since they have a direct effect on the rights of shareholders.  

Innovations in the Incorporation of Joint Stock Companies

As is known, the New Turkish Commercial Code (“New TCC”) has been accepted by the Grand National Assembly of Turkey on January 14, 2011.

INNOVATIONS IN THE NEW TURKISH COMMERCIAL CODE CONCERNING VOTING RIGHTS

Voting rights in joint stock companies are of significant importance, since they enable shareholders to participate in the management of the company. Shareholders may have a voice in the activities of the company through the exercise of their voting rights, such as appointment of members to corporate boards, supervision of the said members and exercise of minority rights. Privileges such as right of access to information, convocation of the general assembly and right to demand the annulment of the decisions aim to guarantee that the voting right is exercised more efficiently.

LATEST AMENDMENTS IN THE TURKISH CAPITAL MARKETS BOARD LEGISLATION

The capital markets legislation in Turkey has seen important changes in the second half of this year. While some of those changes have been initiated by the Turkish Parliament as part of the lawmaking process, the Turkish Capital Markets Board (the “CMB”), the regulatory authority of the capital markets in Turkey, has been the source of other amendments and changes. This article summarizes the new landscape and discusses the impact of the referred new amendments.

Legal Aspects of Sea Pollution

November 2011 - Corporate & Commercial. Legal Developments by Gür Law Firm .

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Pollution matters are regulated by the Environmental Law numbered 2872 (“Law”) and the other related regulations.

Suretyship institution under the New Turkish Code of Obligations

October 2011 - Corporate & Commercial. Legal Developments by Gür Law Firm .

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The New Turkish Code of Obligations numbered 6098 (the “New TCO”) and the Application Code of the Turkish Code of Obligations published in the Official Gazette numbered 27836 on 04.02.2011. The New TCO will take the place of the Code of Obligations numbered 818, published in the Official Gazette numbered 359 on 29.04.1926 which is still in use (the “Current TCO”). Article 648 set forts that the New TCO will enter into force as of 01.07.2012.

Standard terms under the New Turkish Code of Obligations

October 2011 - Corporate & Commercial. Legal Developments by Gür Law Firm .

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The New Turkish Code of Obligations numbered 6098 (the “New TCO”) and the Application Code of the Turkish Code of Obligations published in the Official Gazette numbered 27836 on 04.02.2011. The New TCO will take the place of the Code of Obligations numbered 818, published in the Official Gazette numbered 359 on 29.04.1926 which is still in use (the “Current TCO”). Article 648 sets fort that the New TCO will enter into force as of 01.07.2012.

INNOVATIONS CONCERNING MINORITY SHAREHOLDERS' RIGHTS IN THE NEW TURKISH COMMERCIAL CODE

Minority shareholders rights are of significant importance in companies’ constitution, since they provide protection for the value of minority shareholding and the management of company can be apportioned between the majority and minority shareholders by preventing inappropriate exertion of control by majority shareholders.

RESTRICTION ON PRIVILEGED SHARES IN JOINT STOCK COMPANIES

The Law No. 6215 Amending Several Laws (“Amending Law”), which includes provisions amending the current Turkish Commercial Code No. 6762 (“TCC”), has been published in the Official Gazette dated 12.04.2011. We would like to bring to your attention below, the significant amendment related to restriction of privileged shares in joint stock companies where Government, special provincial administrations, municipalities and other public legal entities, trade unions, associations, foundations, cooperatives and their parents (“Public Legal Entities”) hold shares.

The New Turkish Commercial Code has been Accepted in the New Year

The Draft Turkish Commercial Code (hereinafter referred to as the “New TCC”) replacing the current Turkish Commercial Code (herein after referred to as the “TCC”), which went into force in 1957 and which has been in use for more than fifty years without a structural change, was accepted by Grand National Assembly of Turkey on January 14, 2011.

International Trade Terms are Renewed: Incoterms ® 2010

The purpose of Incoterms is, as stated by ICC “to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree”.

Combating Against the Financing of Terrorism in Turkey*

November 2010 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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By means and tools of the global information age, terrorist organizations are broadening their reach in gathering financial resources to fund their operations.

LIQUIDATION OF CAPITAL COMPANIES

September 2010 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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There are different types of commercial companies that are available to establish by investors in Turkey in accordance with the Turkish Commercial Code (TCC).

TURKISH CIVIL PROCEDURE AT A GLANCE

Dispute resolution and settlement procedures are becoming increasingly important in this time of global financial crisis, particularly in the commercial field. Consequent to the need for specialized legal counsel to prevent further disputes by structuring investments and partnerships appropriately, post-transactional litigation advice and insight into Turkish procedural law applicable to dispute resolution have become more relevant to foreign investors in Turkey. This article provides a general overview of the Turkish judiciary's structure, as well as a summary of the fundamental principles of Turkish civil procedure.

TIME’S UP FOR TURKEY TO FINE-TUNE ITS AUDIOVISUAL RULES

As part of the process of adapting to EU legislation, Turkey made it a national goal to complete harmonization studies with more flexible audiovisual rules by the end of 2009. To this end, the Radio & Television Supreme Council (“RTUK”) prepared a draft broadcasting law (“Draft Law”) to replace the current broadcasting Law on Establishment of Radio and Television Enterprises and Their Broadcasts (“Broadcasting Law”). To a significant extent, the Draft Law was inspired by the EU Audiovisual Media Services Directive 2007/65/EC (“Directive”), a less detailed but more flexible and modernized regulation that covers all audiovisual media services, meaning traditional television (linear service) and video-on-demand (non-linear services). In this regard, the Draft Law introduces new terminology, notions and concepts and revises certain provisions in line with the Directive. It is currently pending before the Turkish Parliament.

MAJOR PRINCIPLES OF SURETYSHIP IN THE TURKISH LEGAL SYSTEM

Suretyship is a kind of security commonly used in business transactions in order to protect creditors from damages providing that debtor fails to fulfill obligations. It is a unilateral contract by which the surety undertakes the obligation of the debtor for the payment of the debt. According to Turkish law, suretyship contracts are subject to the provisions set out in Articles 483-504 of the Turkish Code of Obligations (“TCO”).

Development of E-Commerce Legislation and Taxation of Revenues from Online Content in Turkey

September 2009 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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Activities such as production, presentation, sales, insurance, distribution, and payment of goods and services are possible via computer networks with e-commerce. E-Commerce presents major physical differences from conventional commerce, and therefore many arguments have been raised regarding the problems of regulating and taxing e-commerce under the old commercial and tax regimes applicable.

PUBLIC CALL REQUIREMENTS UNDER THE CAPITAL MARKET LEGISLATION

The Capital Market Board of Turkey (hereinafter referred to as the "CMB") has issued a new Communiqué.  The terms and provisions of the new Communiqué  No: 44, Serial No: IV that has been published in the Official Gazette No: 27337 dated September 2, 2009 (hereinafter referred to as "the Communiqué"), govern and regulate the terms for the acquisition of the shares of a publicly held company by making a call to the shareholders (either voluntary or mandatory) and in case of a mandatory call, the conditions for the obligation for the person(s) acquiring shares exceeding certain ratios, to make a call to the other shareholders to purchase the remaining shares.

The Communiqué defines the concept of "call" as a proposal, either mandatory or voluntary, made to the shareholders of a publicly held company to acquire their respective shares in the company.  Therefore, public calls are analyzed under two categories: (i) Mandatory and (ii) voluntary.

 

 

Turkish Free Trade Zones: Information for Potential Investors

The free trade zones (FTZ’s) of Turkey allow investors to access a broad range of markets, participate in international business, and avoid the impediment of customs and legal restrictions on trade. They are geopolitically part of Turkey, but retain special status as sites beyond the custom borders and the Turkish laws that govern tax, duties, levies and foreign currencies. As small enclaves “abroad,” free trade zones allow foreign companies to participate in all areas of business that private Turkish companies do.

Public Disclosures

The Capital Markets Board of Turkey (the “CMB”) repealed its communiqué relating to public disclosure of certain events relating to publicly traded companies and replaced it with two new communiqués.

MARKET SHARE THRESHOLD UNDER THE COMMUNIQUE ON BLOCK EXEMPTION REGARDING VERTICAL AGREEMENTS

A brand-new provision amended to the Communiqué on Block Exemption regarding Vertical Agreements No. 2002/2 (“Communiqué) has introduced a threshold for the market share, which shall be entitled to benefit from the block exemption under such Communiqué. Prior to the amendment all vertical agreements concluded between two or more undertakings operating at different levels of production or distribution chain with the purpose of purchase, sale or resale of particular goods or services were deemed to benefit from block exemption as per Article 2 of the Communiqué provided that provisions of such vertical agreements fulfill the conditions in the Communiqué. However, the new provision amended under the second paragraph of Article 2 provides that “The exemption provided under this Communiqué shall be applicable provided that the market share of the supplier in the relevant market where it provides goods or services, which are the subject of the vertical agreement, does not exceed 40 %.” This provision is meant to read that suppliers with a market share exceeding 40 % in the relevant market shall not benefit from block exemption even if they fulfill the criteria set forth under the Communiqué.


 

INSURANCE LAW IN TURKEY

January 2009 - Corporate & Commercial. Legal Developments by Güner Law Office .

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In parallel with the rapid growth in the Turkish insurance sector, there have been major changes to the Turkish insurance legislation in the last few years.  The Insurance Supervision Law which regulated insurance activities for 47 years has been replaced with Insurance Law No. 5684 (the Insurance Law) in 3 June 2007.  In addition to the Insurance Law, there are specific pieces of legislation regulating the activities of individual professions in insurance industry (e.g. brokers, loss adjusters, etc.) and different types of insurance (e.g. life insurance, reinsurance, etc.).

DEBT RESTRUCTURING: THE WAY FORWARD IN TURKEY

January 2009 - Corporate & Commercial. Legal Developments by Güner Law Office .

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The Turkish economy entered into a financial crisis in November 2000 and in February 2001 the crisis peaked and triggered a collapse in the value of the Turkish Lira.  Over a few days, the Turkish Lira lost more than 40 percent of its value against the major trading currencies and interest rates rose spectacularly overnight.  As result of this crisis a significant number of Turkish companies became bankrupt.

COMING SOON: SELECTED SECTIONS OF THE DRAFT COMMERCIAL CODE

Certain sections of the draft Turkish Commercial Code (The Turkish Commercial Code was originally enacted on 9 July 1956 and, having been through several minor amendments, is still in force) (the “Draft TCC”) that are still pending before the Turkish National Assembly were summarized in one of our previous Legal500 articles dated May 2008.  This article discusses some of the other sections of the Draft TCC which represent a significant departure from the old approach adopted by the Turkish Commercial Code (the “TCC”).

Financing a Power Plant

The majority of Turkey's infrastructure has historically been supplied by public authorities or private entities through a build/operate/transfer model.  In emerging markets like Turkey, lack of capital is a major concern for large scale projects.  Meeting infrastructure needs in emerging markets requires a substantial amount of project finance. Accordingly, both domestic and foreign sources of capital have to be identified and used efficiently for satisfying the infrastructure needs without creating a heavy financial burden on the treasury.

Amendments to the Free Zones and Customs Law in Turkey

December 2008 - Corporate & Commercial. Legal Developments by Gür Law Firm .

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The Draft regarding the amendment of Free Zones Law and the Customs Law is approved by the Turkish Grand National Assembly (TGNA) and became a law numbered 5810 on 12.11.2008 (the "Law"). The Law was sent to the Presidency on 14.11.2008 in order to be announced in the Official Gazette. The 15 days period for either accepting and announcing the Law by the President or returning the same to TGNA to be re-discussed, has started from the date of delivery of the Law to the Presidency which was 14.11.2008.

With the Law; the establishment purposes of the Free Zones have been re-considered by evaluating the activities in those areas within the past twenty years period, and the vision of the Free Zones has been determined as; to encourage investments and production which are export oriented, to speed up the direct foreign investments and technological entree, to encourage the enterprises to export and to develop the international trade.

Individual or Corporate Lending Contracts

September 2008 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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Apart from loan contracts designated for financial entities, Articles 306 – 312 of the Turkish Code of Obligations (TCO) define money lending contracts (individual loan contracts). Although seemingly unpopular, the contract type for money lending becomes center of attention for shareholder and inter-company loans since that is their only legal ground when inspected thoroughly.

Group Exemptions of Vertical Agreements in Turkish Law

September 2008 - Corporate & Commercial. Legal Developments by ADMD Law Office .

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Competition (anti-trust) law was first established with Law No. 4054 titled ‘The Law on the Protection of Competition’ in Turkey. The fourth article of such law titled “Agreements, Concerted Practices and Decisions Limiting Competition” sets different types of principles for purpose.

Draft Commercial Code Still Pending - But Help is On The Way

The Turkish Commercial Code (the "TCC") was enacted in 1956, and governs commercial transactions, as well as the establishment and governance of capital stock companies and sole proprietorships. Therefore, although the legislature has from time to time introduced amendments in response to changed circumstances and urgent needs, it is clear that the TCC is inadequate in meeting the legal and commercial demands of contemporary commercial and corporate life. Accordingly, in order to harmonize Turkish commerce with globalization, the government prepared a draft commercial code (the "Draft") for discussion in 2005. The Draft has been accepted by the Justice Commission and is still pending before the Turkish Grand National Assembly, but may be enacted in 2008.

Advertising Board Clamps Down on Added Nutrients

The latest trend in the Turkish food industry is to attract consumers by adding nutrients to food products and marketing them as quick and easy solutions to health problems such as cholesterol. However, in general the Advertising Board holds such advertisements to be misleading to consumers and often orders that the advertising cease.