Partial Spin Off Procedures Under Turkish Law

Mergers and acquisitions of companies are regulated in detail under Articles 147 and 451 of the Turkish Commercial Code (the "TCC"). However, such rules have lacked the necessary regulatory moves concerning spin off transactions in Turkish corporate law theory. The expected initiative has been launched in 2001 and the Law No.4684, published in the Official Gazette on 3 July 2001, amending Articles 38 and 39 of the Corporate Taxation Law No. 5422. However, the determination of principles and procedures concerning spin off transactions have awaited the Communiqué on the Principles and Procedures of Partial Spin offs in the Joint Stock and Limited Liability Companies (the "Communiqué"), adopted by the Ministry of Finance and Ministry of Trade and Industry, published in the Official Gazette on 16 September 2003. Upon the adoption of the Communiqué, spin off transactions have boosted, yet revealing numerous controversial issues related thereto. Among all, the absence of assignment of