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ARTICLE · 06 AUGUST 2025

Prohibition On Shareholders' Borrowing From The Company

Sakar Law Office
Sakar Law Office
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Sakar Law Office

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The prohibition on shareholders' borrowing from the company is regulated under Article 358 of the Turkish Commercial Code numbered 6102 ("TCC").

TurkeyCorporate/Commercial Law

The prohibition on shareholders' borrowing from the company is regulated under Article 358 of the Turkish Commercial Code numbered 6102 ("TCC"). Pursuant to this provision, shareholders may not borrow from the company unless they have fully discharged their due debts arising from their capital subscription obligations and unless the company's profit, together with its freely disposable reserves, is sufficient to cover the company's accumulated losses from previous years.

What Conditions Shall Be Met For Shareholders To Borrow From the Company?

The purpose of this provision in TCC is to prevent shareholders from utilizing the company's funds or capital for their personal benefit and to avoid companies acting in effect as a credit institution for their shareholders. In order for the restriction imposed by Article 358 of the TCC on shareholders of joint stock and limited liability companies to be lifted, the following two conditions must be met:

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