Advance Dividend Payments Under The New Turkish Commercial Code

The New Turkish Commercial Code no. 6102 (the ''New Code") was adopted by the Turkish Grand National Assembly on 13^thJanuary 2011 and came into force on 1^stJune 2012.

The third paragraph of Article 509 of the New Code foresees the regulation of advance dividend payment of joint stock companies that are not subject to Capital Markets Law, via a communiqué. According to Articles 565 and 644 of the New Code, advance dividend payments are also enabled for limited liability companies and commandite partnerships with the capital divided into shares.

As a consequence of these regulations, "The Communiqué for the Advance Dividend Payment" was drafted by the Ministry of Customs and Trade and published in the Official Gazette 28379 and entered into force on 9^thAugust 2012. These changes are expected to satisfy an important need of small-sized and mid-sized companies in Turkey by allowing payment flexibility prior to dividend distribution at the end of the fiscal year;