CAPITALIZATION OF THE RECEIVABLES IN STOCK CORPORATIONS
The Turkish Commercial Code numbered 6102 (in Turkish “Türk Ticaret Kanunu”, the “TCC”) sets forth the capital investment obligation in the Articles 127 and 128, assets subject to capitalization as capital in kind in the Article 342 and the valuation methods in the Article 343.
The General Directorate of Domestic Trade (the “Directorate”) of the Ministry of Customs and Trade issued an opinion numbered 67300147.431.04/559478/4979 – 5665 on 15 July 2013 regarding “Capital Increase” (the “Opinion”) and a circular numbered 50035491.449-7326 on 27 September 2013 regarding “Capitalization of The Receivables as Capital in Kind” (the “Circular”).
The Opinion and the Circular issued by the Directorate foresee that the shareholders of an existing or to be incorporated company can bring their receivables into the company as capital. These receivables shall be subject to valuation as per the Article 343 of the TCC, as they are qualified as capital in kind provided that such receivables are due and there are no limited real rights or seizures or measures placed over these receivables.
The said valuation shall be made by the experts appointed by the commercial court of first instance competent in the district where the headquarters of the company is located. The expert report shall indicate the following:
- Valuation method
- Existence and authenticity of the receivable
- Collectability and the full value of the receivable
- Quantity of the share(s) and its equivalent in Turkish Lira for each asset to be capitalized as capital in kind.
Founders and stakeholders may object to the expert report. The court’s decision approving the validity of the expert report shall be final.
In the event that a shareholder deposits his receivable from a company as capital in kind for the establishment or the capital increase of another company, the expert report prepared by the experts appointed by the commercial court of first instance competent in the district of the headquarters of the latter company, shall be submitted to the trade registry office.
In the event that a shareholder capitalizes a receivable from a company for the same company’s capital increase, the existence of this receivable may be determined;
- by submitting the expert report, prepared by the experts appointed by the commercial court of first instance competent in the district of the headquarters of the latter company, or,
- by submitting a report prepared by a certified public accountant (in Turkish “yeminli mali müşavir”) or independent accountant (in Turkish “serbest muhasebeci mali müşavir”), or,
- by submitting the audit report at the companies that are subject to auditing, to the trade registry office.
Collection
A shareholder, who undertakes to bring their receivable as capital in kind into a company, shall not be released from the capital obligation until the company actually collects the receivable. Such receivable, unless agreed otherwise, shall be collected within a month as of the due date if it is undue, as of the date of the shareholders agreement or the articles of association if it is due.
In the event that the company cannot realize the collection within the foreseen period, the company holds the right to compensation for delay of the payment and the shareholder shall be obliged to pay the default interest related to the exceeding period. In the event that the collection is realized partially, the same procedure shall be binding for the balance receivable.
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