We shall remind our reader that sole shareholder companies as well as sole board member joint stock companies are now admitted. And it is no longer obligatory for board members of joint stock companies to be shareholders.

The obligations are as follows:

1. For the companies subject to external control, they shall appoint at the latest on 31 March 2013 an external controller. This appointment shall be made by the General Assembly when approving its 2012 accounts. The external auditor shall be a chartered accountant, an accountant or any firm of accountants or of chartered accountants as duly licensed. The Government has issued (Official Journal dated 23 January 2013) its decree defining the scope of the companies subject to external auditing and therefore to the appointment of an external auditor.
2. Joint stock companies shall adopt at the latest also during their ordinary General Assembly to be held before end of March 2013 an internal regulation (“iç yönerge”) related to the functioning of the General Assemblies. It shall be a second item to be inserted into the agenda of the company. This internal regulation shall be drafted in compliance with the directive adopted in this respective and published in the Official Journal as of 28 November 2012.
3. As it was the case under the former Commercial Code, this ordinary General Assembly shall approve inter alia an activity report adopted and signed by the Board of Directors (or by the Board of Managers for limited liability companies). However, under the New Commercial Code, this activity report is now regulated by a specific directive (Official Journal dated 28 August 2012). As regulated, such report is quite extensive and detailed. It must cover a) the financial situation, b) the activities and important developments regarding the activities, c) the risks and the risks assessments made by the management, d) the rights and advantages extended to the high ranking managers, and e) the R&D works. The activity report must be adopted by the Board of Directors/Board of Managers on 28 February 2013 at the latest (article 16 of the Directive).
4. A report on the relations between the Turkish company and its mother company (called in Turkish “bağlılık raporu” or “subordination report” and set forth in article 199 of the commercial code) shall also be adopted by the Board of Directors/Board of Managers and submitted to the approval of the ordinary General Assembly, before end of March of the following year. However as per the directive on the minimum content of the activity report, we understand that the activity report shall encompass this subordination report.
5. The records for 2012 shall be closed before end of March 2013. The closing approvals for the day book (in Turkish, “yevmiye”) and the Board’s resolutions book/Managers Board’s resolutions book (in Turkish, “Yönetim Kurulu Karar Defteri”/”Müdürler Kurulu Karar Defteri”) shall be done by the notary public, until the end of the third month of the following activity year. Accordingly, the 2012 closing approvals shall be done at the latest on 31 March 2013, for the companies whose fiscal year ends on 31 December 2012.

6. Once a) the external controller to be appointed is identified (if and when required), b) the activity report and c) the group report are ready, d) the internal directive is drafted, and e) the books for 2012 are closed, the ordinary General Assembly shall be held for approval of the 2012 accounts and adoption of the above mentioned items. The presence of the Ministry’s representative (formerly called, Government’s commissary) for joint stock companies is no longer systematic (directive published on the Official Journal dated 28 November 2012). The Ministry is the Customs and Trade Ministry. General Assemblies can be held on an electronic platform; however in such case and in this case the presence of the Ministry’s representative shall be mandatory.
7. Until end of May 2013, a notice form must be sent to the Foreign Investment General Directorate/Economy Ministry by the companies with foreign capital.
8. Before 1st July 2013, joint stock and limited companies’ articles of association shall be complied with the new Commercial Code. In particular, for joint stock companies, articles related to share transfers shall be modified and for limited liability companies, the status of the chairman of the Board of Managers may be detailed (shall he/she have a prevailing vote or not). Articles of association of limited companies are expressly authorized by law to encompass minority rights as well as call, preemption, right of first refusal and call back option rights.
9. As of 1st July 2013, at the latest companies subject to external control (we are waiting for the decree) shall have a web site where all the data disclosed to the trade registry shall also be disclosed to the public via this web site.

For each of the above mentioned steps, our Law Firm will be at the disposal of its clients upon their requests.