New TCC Capital Decrease

Capital Decrease According To The New Turkish Commercial Code

In the new Turkish Commercial Code, the decrease of the capital is stipulated in Articles 473, 474 and 475. In the former version of Turkish Commercial Code, capital decrease was included in Articles 396, 397 and 398. Between the new provisions and the old ones, there is a statement that the reasoning of the new articles is identical to the old article with minor changes in wording.

Regarding the decrease of the capital, the law does not decide to decrease the capital unless the presence of the amount of active in the company that will fully meet the rights of the creditors of the company is determined by the law. The most important change seen here is that the old law requires a 3-person expert report to be appointed by the court to fulfill this provision, while the new law requires the report of the Transaction Auditor.

Another alternative to decreasing the capital is the issue of division and will be examined in another article.


In the light of these articles, the conditions required for capital decrease are as follows. (At the end of our article, the texts of Articles 473, 474 and 475 of the New Turkish Commercial Code are included.)

1-For the provisions regarding the decrease in the capital of Limited Liability Company in Article 592, the provisions of Joint Stock Companies shall be applied.

2-If a joint stock company does not decrease its capital and issue new shares to be paid in full to replace the decreased portion, the general assembly shall decide on the necessary amendment of the articles of association.

3-3. In the General Assembly meeting, invitation announcements, letters and website notification, the reasons for the capital decrease and the purpose of the decrease and how the decrease will be made are explained in detail and in accordance with the principles of accountability.

4. The board submits a report containing these issues to the general assembly, the report approved by the general assembly is registered and announced.

5-Despite the decrease in the capital, it is not decided to decrease the capital unless the presence of the amount of assets in the company that will fully meet the rights of the creditors of the company is determined by the report issued by the Transaction auditor.

6-The decision of the General Assembly is taken with the affirmative votes of the owners or their representatives of the shares that make up at least seventy-five percent of the capital specified in the first sentence of the third paragraph of Article 421. In the decision, the result of the transaction auditor's report is disclosed and the manner in which the capital decrease will be made is shown.

7. The book profit that will arise according to the records due to the decrease of the basic capital can only be used to eliminate the shares.

8-Under no circumstances may the capital be decreased below the minimum amount determined by Article 332 entitled the amount of capital.

9- The provisions stated in Articles 473, 474 and 475 regarding the decrease of the capital are applied by comparison to the decrease of the issued capital in the registered capital system.

10- If the general assembly decides to decrease the basic capital, the board will post this decision on the company's website.

11- This decision is announced three times, seven days apart, in the Turkish Trade Registry Gazette referred to in Article 35, as well as stipulated in the articles of association.

12-The announcement states that creditors can request payment or guarantee of their receivables within two months from the third announcement in the Turkish Trade Registry newspaper.

13- Call letters are also sent to creditors known by the company.

14- If the capital is decreased in order to cover a deficit in the balance sheet as a result of losses and by the rate of these deficits, the board may stop calling creditors and paying or guaranteeing their rights.

15-The capital can only be decreased after the expiry of the period given to the creditors and the payment or securing of the declared receivables.

16- If this does not happen, the creditors may file a lawsuit for the cancellation of the capital decrease within two years after the registration of the capital decrease transaction at the commercial court of first instance where the company is located. In case of insufficient coverage, judicial remedy is also available.

17- In cases where it is necessary to decrease the amount of share certificates by change or stamping or in any other way in order for the decrease decision to be implemented, shares that are not returned despite the notice made for this issue may be canceled by the company. In the notification, it is written that the bills not returned to the company will be canceled.

18- If the amount of the share certificates that the shareholders have returned to the company for replacement is insufficient to change in accordance with the decision, these shares will be canceled and the new shares to be given in return are sold and the amount of their shares is kept in the company.

19- Unless documents showing that the conditions written in Articles 473 and 474 of Article 474 have been complied with the above paragraphs, the decision to decrease the basic capital and the fact that the capital is actually decreased cannot be registered in the trade registry

OLD AND NEW TEXTS

New text introduced by Law No. 6102

B) Decrease of basic capital

I- Decision


ARTICLE 473- (1) If a joint stock company does not issue new shares to be fully paid to replace the decreased portion by decreasing the capital, the general assembly shall decide on the amendment of the articles of association as required. In the invitation announcements for the general assembly meeting, in the letters and in the website notification, the reasons for the capital decrease and the purpose of the decrease and how the decrease will be made are explained in detail and in accordance with the principles of accountability. In addition, the board submits a report containing these issues to the general assembly, the report approved by the general assembly is registered and announced.


(2) With the report of the transaction auditor, no decision is made to decrease the capital, unless the presence of an amount of active in the company that will fully meet the rights of the creditors of the company despite the capital decrease is determined.


(3) The first sentence of the third paragraph of article 421 is applied to the decision of the general assembly. In the decision, the result of the transaction auditor's report is disclosed and the manner in which the capital decrease will be made is shown.


(4) The book profit that will arise due to the decrease of the basic capital can only be used for the destruction of the shares.


(5) The capital cannot be decreased from the minimum amount determined by Article 332.


(6) This article and articles 474 and 475 are applied by comparison to the decrease of the issued capital in the registered capital system.


Provision in the Former Turkish Commercial Code


III- Decrease of basic capital:

1. Decision:

Item 396- If a company does not intend to issue new shares to be paid in full to replace the decreased share by decreasing its capital, the general assembly decides to amend the provisions of the main contract regarding the nominal value of the basic capital. Such a decision cannot be made unless it is determined by a joint report to be given by three experts to be appointed by the court upon the request of the Board that there are sufficient assets that will fully cover the rights of the creditors of the company despite the decrease of the basic capital.

In this regard, the provisions of the third and fourth paragraphs of Article 388 are applied. In the decision, the result of the expert report is explained and the manner in which the capital decrease will be made is shown.

A gain arising from the decrease of the basic capital according to the records can be used exclusively for redemptions.

Under no circumstances can the basic capital be decreased below the minimum capital amount determined by Article 272 of this Law.

New text introduced by Law No. 6102

II- Call to creditors

ARTICLE 474- (1) If the General Assembly decides to decrease the basic capital, the board announces this decision three times, in the newspaper referred to in Article 35 and at the same time as foreseen in the articles of association, in addition to posting this decision on the company's website. The announcement states that creditors can request payment or guarantee of their receivables within two months from the third announcement in the Turkish Trade Registry newspaper. Call letters are also sent to creditors known by the company.

(2) If the capital is decreased in order to cover a deficit in the balance sheet as a result of losses and if these deficits are decreased in proportion, the board may cease calling creditors and paying or securing their rights.

Provision in the Former Turkish Commercial Code

2. Inviting creditors:

Item 397- After the general assembly decides to decrease the basic capital, the board declares this decision three times in the newspaper referred to in article 37 and also with the articles of association and declaring that they will receive it within two months from the third announcement in the newspaper referred to in Article 37. Invitation letters are also sent to the creditors known by the company.

In order to close a deficit in the balance sheet as a result of basic capital losses and if these deficits are decreased in proportion, the board may waive the invitation of the creditors and the payment or provision of their rights.

New text introduced by Law No. 6102


III- Execution of decisions

ARTICLE 475- (1) The capital can only be decreased after the period given to the creditors expires and the declared receivables are paid or secured; otherwise, the creditors may file a lawsuit for the cancellation of the capital decrease within two years after the registration of the capital decrease transaction is announced in the commercial court of first instance where the company is located. In case of insufficient coverage, legal remedy is also possible.

(2) In cases where it is necessary to decrease the amount of the share certificates by change or stamping or in any other way in order for the decrease decision to be implemented, the shares that are not returned despite the notice made for this issue may be canceled by the company. In the notification, it is written that the bills that are not returned to the company will be canceled.

(3) If the amount of share certificates that the shareholders have returned to the company for replacement is insufficient to change in accordance with the decision, these shares will be canceled and the new stocks to be given in return are sold and the amount of their shares is kept in the company.

(4) Unless documents showing that the conditions written in Articles 473 and 474 have been complied with the above paragraphs, the decision to decrease the basic capital and the fact that the capital is actually decreased cannot be registered in the trade registry.

Provision in the Former Turkish Commercial Code

3. Execution of the decision:

Item 398- Basic capital can only be decreased after the period given to the creditors is over and the declared receivables are paid or provided.

For the execution of the decision of decrease, the shares that have not been returned despite the notice, although it is deemed necessary to decrease the amount of shares by exchange or stamping or in any other way, may be canceled by the company.

In the notifications made on the time of returning to the company for exchange, it is also written that the non-returned bills will be canceled.

Pay sahiplerinin mübadele olunmak üzere şirkete geri verdikleri hisse senetlerinin miktarı, karar gereğince mübadeleye yetmezse bu senetler iptal olunarak bunların mukabilinde verilmesi gereken yeni senetler satılıp paylarına düşen miktar şirkette saklanır.

If the amount of the shares that the shareholders have returned to the company for exchange is insufficient for exchange in accordance with the decision, these shares will be canceled and the new shares to be given in return are sold and the amount falling to their shares is kept in the company.
Unless documents showing that the above paragraphs and 396th and 397th articles have been complied with, the decision to decrease the basic capital and the fact that the capital is actually decreased cannot be registered in the trade registry.