Group Companies Under The New Turkish Commercial Code

The new Turkish Commercial Code No. 6102 ("NTCC"), which came into force on 1 July 2012, contains a whole new section of nearly 25 articles on group companies that was not present in the former code.

As it is further elaborated below, the relevant provisions on group companies will certainly affect multinational companies that have a subsidiary or an affiliated company in Turkey. While some of the provisions impose significant obligations on parent companies, the main purpose for providing for this matter under the new code is to achieve a certain level of transparency and justice by regulating the relationship between parent companies. As it is also stated under the rationale for the new code, these new provisions aim to abandon the former approach, which was to hold the board members of a company responsible without considering the instructions provided by the parent company. Thus the new code now recognizes the concept of group companies and considers such a group