Board Structure And Liability Concept Under The Revolutionary New Commercial Code

One Person Boards vs. Multi Member Boards

The Turkish Commercial Code published in the Trade Registry Gazette dated 14 February 2011 and numbered 27846 (the "TCC"), makes significant changes in the management of joint stock corporations (anonim şirket). The TCC introduces the possibility of having a board of directors (a "Board") that is comprised of one member; whereas, the previous legislation mandated the presence of at least three members on the Board. This article provides a general assessment of the management of a joint stock corporation with a Board consisting of only one member.

For companies that have a Board with three members, as per the former legal rules, in most cases, only one of the three members must be located in Turkey and involved in the day-to-day operations of such company. With the possibility to have a one person Board now, the question now seems to be what exactly the roles of other two Board members are.