stock corporations i. glossary of legal terms articles of corporation: şirket esas sözleşmesi...

Stock Stock CorporationsCorporations

II

Glossary of Legal TermsGlossary of Legal Terms

Articles of corporation: şirket esas sözleşmesi

Board of Directors: Yönetim Kurulu Charter: articles of corporationCommercial Registry Gazette: Ticaret

Sicili GazetesiCompulsory: zorunluCore: gövde


Dissolution: Sona ermeDividend: temettü; kâr payıGeneral Assembly: Genel KurulIncorporator: kurucu ortakIndorsement: ciroIssued capital: çıkarılmış sermayeNegligently: ihmal ya da kusurlu olarakNegotiable instrument: kıymetli evrak


Registered capital: kayıtlı sermayeShare: pay; hisseShareholder: paydaş; hissedarStock: pay; hisseSupplement: ekVoluntary: isteğe bağlı

STOCK CORPORATIONS (A.Ş.)STOCK CORPORATIONS (A.Ş.)

A stock corporation is a company with its own firm name whose predetermined capital (share capital) is divided into parts (shares) and whose liability is limited to the company’s assets.

The liability of shareholders is limited to their capital contribution in the company. They are not personally liable for the debts of the company.

Advantages:Advantages:It is the most suitable company type for the

capitalist economic system.It enables to collect large amounts of

capital from different people.The large capital collected suits the market

economy relying on perfect competition.Big entrepreneurships can be better

organized and incorporated.The enterprise risk can be shared among

large number of partners and minimized.

Disadvantages:Disadvantages:

It requires greater expense and effort to be created and operated.

In comparison with limited partnerships decision-making process works slower.

The power of minority shareholders can sometimes be misused against the majority in the general assembly.

Disadvantages:Disadvantages:

The only relationship between the shareholders is material.

The managers can negligently or maliciously damage the common interests of the innocent shareholders in majority.

Characteristics of Stock Corporations:Characteristics of Stock Corporations:

1-) Legal personality:A stock corporation has a private law legal

personality. It can acquire rights and incur obligations upon their registration. It can sue and be sued at law.

It has independent and separate assets from the assests of its shareholders. Corporate debts are payable only out of corporation’s assets.


2-) Capital fixed in advance:The (share) capital of the corporation

refers to the sum of shareholder’s contributions. It must be predetermined in the articles of incorporation (charter).

The share capital of the corporation shall amount to a minimum of 50.000 YTL.

For some corporations dealing with certain business types a higher share capital can be predetermined by law (for


example banks, foreign trade capital corporations, leasing companies, insurance companies etc.).

As a rule, to increase or decrease the capital, the articles of incorporation (charter) must be amended; moreover this amendment must be registered in the commercial registry and published in the Commercial Registry Gazette.

Characteristics of Stock Corporations:Characteristics of Stock Corporations:3-) Stock Certificates and Free Transferability of Shares:

A stock certificate is a negotiable instrument issued by a corporation that evidences ownership of a specified number of shares in the corporation.

According to Turkish Law, stock corporations is the only type of companies which can issue stock certificates.

Stock certificates are negotiable and generally freely transferable by indorsement and delivery.


4-) Limited Liability:The liability of the corporation is limited to

its assets (movable property, immovable property, rights having an economic value etc.), but not to the amount of share capital. In other words, the shareholders are not personally liable for the company’s debts. The share capital illustrates the minimum, and the assets the maximum guarantee for the creditors of the corporation.


5-) Firm Name:

Türk Ticaret Bankası A.Ş. Alsancak Şb.

compulsory addition

Essential part

Essential part

voluntary addition (with permission)

Characteristics of Stock Corporations:Characteristics of Stock Corporations: 6-) Purpose and Subject Matter:A stock corporation can be established to

operate a commercial enterprise in any business which is not forbidden by law.


7-) Number of Incorporators:As a rule, for the establishment of a stock

corporation the existence of only one shareholder is sufficient. Incorporators can be a real person or a legal person in nature.

There is not any limitation by law for the maximum number of shareholders.

Single Share Holder CompanySingle Share Holder Company

The single shareholder is allowed to exercise all the authorisations granted to the general assembly, and can take all types of decisions.

In addition, the board of directors are allowed to be formed with the only partner.

Single shareholder company is reflected to the Turkish legislation as a requirement of the 12th European Union directive concerning the one shareholder companies.

The reason relates to the protection of small and medium size enterprises. In this way, SMEs with one real person merchant shall be discharged from unlimited liability.

Foreign investment can easily establish a company in Turkey.

stock corporations i. glossary of legal terms articles of corporation: şirket esas sözleşmesi...

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