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LIMITED LIABILITY COMPANIES SHALL HOLD THEIR ANNUAL GENERAL ASSEMBLY MEETING

We bring forth to your attention the ordinary general assembly (“OGAM”) liabilities of limited liability companies and results of default on this. That is to say;
  • As per the article 617/1 of the Turkish Commercial Law (“TCC”), the General Assembly of the Shareholders (“GA”) shall be convened by the managers. The OGAM shall convene annually within three months as of the closing of the accounting period.
  • As per the article 64 of the TCC, every merchant must keep commercial books and indicate in his/her books commercial transactions, economic and financial status of his/her commercial business, debt and credit relationships and the results obtained in each accounting period in a manner that is clearly visible according to TCC. Books are kept in a manner to provide third-party experts with an idea of the activities and financial status of the business in an examination that they would make within a reasonable period. The creation and development of business activities could be monitored through the books. And, article 562/1/a regulates that who does not fulfill the obligations in the article 64, paragraph one, second or third sentence of TCC are sentenced to an administrative fine of four thousand Turkish Liras.      Apart from this, the most important article is 562/4 as follows; those who do not provide or provide partially the books, records and documents, and the information related to them that are required to be kept or saved according to the provisions of TCC, regardless of whether or not they belonged to the real or legal person that is audited, despite the fact that they were requested by those authorized for auditing according to the article 210, paragraph one or keep these auditing persons from fulfilling their duties are sentenced to a judicial fine of not less than three hundred days provided that their act did not constitute a crime that necessitates a heavier sentence.
  • As per the article 625/1/g of the TCC, the managers shall not be entitled to transfer and abdicate from the following duties and powers; …preparation of the GA meetings and execution of the resolutions of the GA; otherwise their liability may be arised if there is a damage in this regard.
  • As per the article 554 of the TCC, the auditors and special auditors that audit year-end and consolidated financial statements, reports, accounts of companies and company groups are liable for the damage they caused against both the company and shareholders and the company’s creditors in the event that they have been at fault in fulfilling their statutory duties.
  • As per articles 553 and 644 of the TCC, in case of breach of contractual obligations by the founders, members of Board of Directors, managers and liquidators by their fault, they shall be held responsible against both the shareholders and company’s creditors for the damage caused thereof. In addition to this, as per the article 555 of the TCC, the company and any one of the shareholders shall be entitled to claim compensation of damages of the company. Shareholders shall be entitled to request the payment of the compensation to be effected to the company. Considering above mentioned regulations, limited company’s managers are responsible for the loss and/or damages which are caused in consequence of not to call the GA that may arise due to the violation of their obligations with their faults.
  • As per the article 632/2 of the TCC, if one of the essential bodies of the company is not present or the General Assembly cannot convene for a long time, the court of commerce at the place where the head office of the company is domiciled shall designate a period of time for the shareholders to remedy the status of company in compliance with the law upon the demand of one of the creditors of the company; and if such status is not remedied in spite of such period of time, then it shall be entitled to dissolute the company upon listening to the directors/managers. Considering above article, it is really crucial if a limited liability company does not hold its GA meeting for a long time since it can finalize with dissolution of the company.
Considering, above explanation related with limited liability companies, we highly recommend to hold OGAM regularly in order to eliminate any penalty and/or personal liability, dissolution of the company, etc. risks.

It should also be mentioned that, it is not necessary to register OGAM for limited liability companies, however, they should be submitted to the relevant trade registry office since trade registry officers examine previous years’ OGAM, if there is an item to be registered before trade registry office.

Our Law Firm remains at your disposal for any further clarifications or assistance you may need about the subject matter.

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