PREPARING THE ORDINARY GENERAL ASSEMBLY UNDER TURKISH LAW: KEY LEGAL CONSIDERATIONS FOR JOINT STOCK AND LIMITED LIABILITY COMPANIES

1. Introduction

The first quarter of each calendar year constitutes a critical compliance period for companies operating in Türkiye. During this period, corporate bodies are required to review the company’s financial performance, assess management activities and adopt resolutions that shape the company’s legal and financial position for the year ahead.

At the heart of this process lies the ordinary general assembly(“OGA”), which serves as the primary platform for shareholder decision-making and corporate accountability. Far from being a mere formality, the OGA represents a legally significant mechanism under the Turkish Commercial Code No. 6102 (“TCC”), the improper execution of which may result in invalid resolutions and potential liability for directors and managers.

This article outlines the legal framework and practical considerationsapplicable to the preparation and conduct of ordinary general assemblies in joint stock companies and limited liability companies, with particular emphasis on statutory obligations and common issues encountered in practice.

2. Ordinary General Assembly in Joint Stock Companies: Legal Framework and Timing

Pursuant to Article 409 of the TCC, joint stock companies are required to convene an ordinary general assembly at least once a year.

In addition, Article 409/1 of the TCC provides that the ordinary general assembly must be held within three months following the end of the fiscal year. Accordingly, for companies whose fiscal year ends on 31 December, the OGA must be convened no later than 31 March of the following year.

Failure to comply with this statutory timeframe may expose members of the Board of Directors to administrative fines under Article 562 of the TCC and liability claims arising from breach of the duty of care and loyalty regulated under Articles 369 and 553 of the TCC.

3. Mandatory Agenda Items

The agenda of the Ordinary General Assembly must include certain mandatory items that cannot be omitted or postponed. These items are primarily derived from Articles 409, 437 and related provisions of the TCC.

In practice, the mandatory agenda typically includes:

• Review and discussion of the Board of Directors’ annual activity report,
• Review of the financial statements,
• Resolution on the approval of the annual profit or loss,
• Resolution regarding profit distribution, if applicable,
• Discharge of the members of the Board of Directors,
• Election of board members whose term has expired and,
• Appointment of the independent auditor, where required

The absence of mandatory agenda items may give rise to claims for annulment of general assembly resolutions.

4. Preparatory Duties of the Board of Directors

The lawful and timely preparation of the Ordinary General Assembly falls primarily within the responsibility of the Board of Directors.

Under Articles 369 and 375 of the TCC, the Board must act with due care and diligence and ensure that all documents required for shareholder review are prepared accurately and in a timely manner. These documents include, inter alia:

• The financial statements prepared in accordance with applicable accounting standards,
• The annual activity report,
• Draft resolutions and agenda, and,
• Profit distribution proposal, where relevant.

In addition, pursuant to Article 437 of the TCC, shareholders must be granted access to these documents within the statutory periods prior to the meeting.

5. Financial Position and Capital Considerations

While the ordinary general assembly primarily focuses on approval and oversight, the company’s financial position and capital structure often constitute a central discussion point during the meeting.

In cases where financial indicators reveal potential capital impairment or loss, the Board of Directors is required to assess the company’s position in light of Article 376 of the TCC and to inform shareholders accordingly. Any measures to be proposed, such as capital increase, capital reduction or loss offsetting, must be properly reflected in the agenda and supported by relevant financial data.

Addressing such matters transparently within the General Assembly framework contributes to both regulatory compliance and shareholder confidence.

6. Ordinary General Assembly in Limited Liability Companies

In limited liability companies, the general assembly of shareholdersconstitutes the supreme corporate body pursuant to Article 617 of the TCC.

Although the TCC does not prescribe a specific three-month deadline comparable to that applicable to joint stock companies, the general assembly is required to resolve on key matters such as:

• Approval of the financial statements,
• Decision on profit or loss,
• Resolution on profit distribution, if any
• Discharge of company managers.

From a best-practice perspective, limited liability companies are advised to hold their Ordinary General Assembly on an annual basis and within the first quarter of the year, particularly where foreign shareholders or audit obligations are involved.

7. Decision-Making and Formalities in Limited Liability Companies

Unlike joint stock companies, limited liability companies benefit from procedural flexibility. Pursuant to Article 617/3 of the TCC, General Assembly resolutions may be adopted without holding a physical meeting, by way of written approvals, unless otherwise stipulated in the articles of association.

While this flexibility facilitates decision-making, it does not eliminate the requirement for proper documentation. Inadequate or informal resolutions may be challenged on validity grounds and give rise to managerial liability.

8. Common Issues Encountered in Practice

Based on corporate practice, the following issues frequently arise during ordinary general assembly processes:

• Delays in finalising financial statements,
• Inconsistencies between financial statements and activity reports,
• Inadequate shareholder notifications,
• Deficiencies in representation and proxy documentation and,
• Delays in trade registry filings following the meeting.

Such issues may result in rejected registry applications, administrative sanctions or shareholder disputes.

9. Conclusion

The Ordinary General Assembly constitutes a cornerstone of corporate governance under Turkish law for both joint stock companies and limited liability companies. Compliance with statutory requirements governing timing, agenda and documentation is essential not only for the validity of resolutions but also for the protection of directors and managers against potential liability.

The first quarter of the year should therefore be approached as a structured compliance period, requiring careful legal planning, timely preparation and coordinated execution. A proactive approach to General Assembly preparation remains one of the most effective tools for ensuring corporate stability and regulatory compliance.

About Our Corporate Practice

Our Corporate Law of our Law Firm team advises domestic and foreign-owned companies on all aspects of corporate governance, including ordinary and extraordinary general assemblies, board and shareholder resolutions, capital matters and trade registry filings. We provide pragmatic and legally sound solutions tailored to our clients’ operational and strategic needs.

Our Law Firm remains at your disposal for any further clarifications you may need.

Copyright © 2025 Cailliau&Colakel Attorney Partnership, All rights reserved.