GENERAL ASSEMBLY MEETINGS OF THE COMPANIES
As we approach the end of the first quarter, companies are reminded of their obligation under the Turkish Commercial Code No. 6102 (“TCC”) to convene their ordinary general assembly meetings within three months following the end of each fiscal period.
Pursuant to Article 409/1 of the Turkish Commercial Code No. 6102 (“TCC”), ordinary general assembly meetings are required to be held within three months following the end of each fiscal period.
The same requirement is reiterated in Article 7 of the Regulation on the Procedures and Principles of General Assembly Meetings of Joint Stock Companies and the Attendance of the Representatives of the Ministry of Customs and Trade at Such Meetings, published in the Official Gazette dated 28 November 2012 and numbered 28481. According to the provision:
“The ordinary general assembly meeting shall be held within three months following the end of each fiscal period. Accordingly, companies whose fiscal period aligns with the calendar year must hold the meeting within the first three months of the year, whereas companies with a special fiscal period must hold the meeting within the first three months following the end of that period.”
In practical terms, this means that companies following the calendar year must hold their ordinary general assembly meeting by the end of March, while those with a special fiscal yearmust convene the meeting within three months after the close of that specific period.
Although the three-month period is generally considered regulatory rather than mandatory under doctrine and case law for the unlisted companies, failure to hold the ordinary general assembly meeting within the prescribed period does not affect the validity of the meeting; however, it may lead to the loss of certain rights. Moreover, where the delay is due to a fault by the board of directors, and such fault causes actual damage, board members may be held personally liable under Article 553 of the TCC, provided that a causal link exists between the fault and the damage.
In any case, the appointment of the independent auditor must be registered with the Trade Registry and published in the Turkish Trade Registry Gazette by the end of the calendar year.
If a company subject to independent audit fails to appoint an independent auditor, or if the company’s financial statements and the annual report of the board of directors are not audited, such documents shall be deemed as not duly prepared. Consequently, it will not be legally permissible for the general assembly to review or resolve these financial statements, nor to adopt resolutions regarding the discharge of board members, profit distribution, capital increase or decrease, and similar matters.
If your company has not yet scheduled its ordinary general assembly meeting, we recommend doing so without delay to remain in compliance with the legal obligations and best corporate governance practices.
Our Law Firm remains at your disposal for any further clarifications you may need.
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