Latest Developments in Corporate Law
Recent important amendments to the Turkish Commercial Code have introduced new regulations regarding company structuring and management. These changes particularly affect joint-stock companies and all capital companies. In this article, we comprehensively examine the most significant changes and their impact on businesses.
Changes in Board of Directors Structure
With new regulations, the areas of responsibility of board members have been expanded, and stricter rules have been introduced regarding compliance with corporate governance principles. Criteria for independent board members have been updated, and incentive provisions for female board member representation have been introduced. Additionally, procedures for conducting board meetings electronically have been redefined.
Electronic General Meetings
Regulations regarding electronic general meetings have been updated, making participation requirements more flexible. Companies can now hold fully electronic general meetings as an alternative to physical meetings. Key updates include:
- Enhanced security infrastructure for electronic general meeting systems
- Expanded rights for shareholders to ask questions and vote electronically
- Ability to prepare and store meeting minutes in electronic format
Shareholder and Minority Rights
Minority shareholder rights have been significantly expanded under the new regulations:
- The scope of information and inspection rights has been broadened
- The process for requesting a special auditor has been simplified
- Minority shareholders’ right to nominate board candidates has been strengthened
- Transparency requirements for dividend distribution policies have been increased
Directors and Officers Liability Insurance
The new regulations encourage and, in certain cases, mandate directors and officers liability insurance. This insurance covers compensation obligations arising from damages caused by board members while performing their duties, subject to specified limits.
Compliance Process and Key Considerations
The transition periods allocated for companies to comply with these changes are limited. Companies are advised to take the following steps promptly:
- Update articles of association to align with new regulations
- Review board structure and composition
- Revise internal policies and procedures
- Prepare electronic general meeting infrastructure
- Restructure shareholder communication policies
Conclusion
These comprehensive amendments to the Turkish Commercial Code directly affect companies’ management and structuring processes. Professional legal consultancy is essential for smooth compliance and minimizing potential legal risks. Our expert corporate law team is ready to support your compliance process. Contact us for detailed information.