Board of Directors – Muhasebe News

Is It Compulsory For Board of Directors To Keep Minute Book In Limited Companies?

MuhasebeNews — Fri, 02 Nov 2018 08:00:19 +0000

In Limited Companies, it is not compulsory for Board of Directors to keep Minute Book. On the other hand, those who wouldn’t like to keep this book are compulsory to write the decisions taken in Limited Companies in general meeting and negotiation book. The decisions taken by the Directors or the Board of Directors with regard to corporate management can be written in general meeting and negotiation book as well as in minute book of Board of Directors.

In the event of keeping Minute Book of Board of Directors, the judgements concerning to the minute book of Board of Directors including approval of opening and closing should be applied. In case of writing the decisions in general meeting and negotiation book, it is compulsory to write the issues stated in the second clause of article 10 of Account Books Communique. In process of keeping a separate minute book of Board of Directors, the decision of the Director or the Board of Directors will not be written in general meeting and negotiation book.

Source: Turkish Trade Law
Date: 1 March 2017

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Basic Information about Corporation According to Turkish Code of Commerce

MuhasebeNews — Mon, 22 Oct 2018 13:25:59 +0000

1- What does “Corporation” Mean?
Corporation means a company whose capital is specified and shared and which is in charge of its own assets because of its debits. (Article 329 of the Turkish Code of Commerce)

2- What is the field of activity of a Corporation?
Corporations can be found for all kinds of economic goals and subjects that are not forbidden by law. (Article 331 of the Turkish Code of Commerce)

3- What is the minimum amount of capital for Corporations?
The original capital referring to the committed capital in articles of incorporation cannot be less than 50.000 Turkish Lira. On the other hand, the initial capital in non-public corporations, who accept the registered capital system showing maximum realm of authority given to Board of Directors for capital increase, cannot be less than 100.000 Turkish Lira. (Article 332 of the Turkish Code of Commerce)

4- How many partners are needed in order to establish a Corporation?
There should be one or more than one founders in order to establish a Corporation. (Article 338 of the Turkish Code of Commerce)

5- When should a Corporation make payments for capital in cash?
25% of par value of subscribed capital in cash should be paid before the registration and the rest should be paid within 24 months after the registration. However, the absolute amount of premiums on issued shares should be paid before the registration. (Article 344 of the Turkish Code of Commerce)

6- What is the borrowing prohibition of Corporation shareholders?
Shareholders cannot become indebted to the company until they fulfill liabilities due (which come out because of capital subscription) and the profit of the company (with free reserves) becomes equal to losses of previous periods. (Article 358 of the Turkish Code of Commerce)

7- Members of the Board of Directors in Corporations
There are one or more than one members in the Board of Directors who are appointed with the articles of incorporation or by the Board of Directors. (Article 359 of the Turkish Code of Commerce)

8- What is the term of Office of Board of Directors?
The term of office of Board of Directors should be maximum 3 years. Unless indicated otherwise in the articles of incorporation, the same person can be appointed again. (Article 362 of the Turkish Code of Commerce)

9- Can a member of the Board of Directors be suspended from his/her duty earlier?
Even if they are appointed with the articles of incorporation, members of the Board of Directors can be suspended from their duties earlier on condition that there is a provision related to the agenda or there is a justified reason (even if there is no provision related to the agenda). Legal entity who is a member of the Board of Directors can change the person being the representative on behalf of it. (Article 364 of the Turkish Code of Commerce)

10- Which Board Administrate the Corporation?
A Corporation should be administrated and represented by the Board of Directors. (Article 365 of the Turkish Code of Commerce)

Source: the Turkish Code of Commerce Numbered 6102

Can A Corporation Transfer Its Board Task?

MuhasebeNews — Sat, 20 Oct 2018 07:00:36 +0000

The Board of Directors in Corporations assign a chairman among its members and at least one deputy chairman (in order to act for the chairman in case he/she is absent) every year.

In the articles of incorporation, it is envisioned that the chairman and the deputy chairman or one of them can be assigned by the Board.

The Board can establish a committee or a commission (there can be Board members among them) in order to control the general situation, prepare a report that will be submitted to the Board, enforce of its decisions and internal audit.

By inserting a provision to the articles of incorporation, The Board can be authorized to assign partially or completely responsibility to some Board members or to the third persons in line with its internal directive.

This internal directive organizes corporate management, defines necessary tasks and positions, and determines who depends on whom and who is subject to submit information.

On request, the Board gives information in written form about this internal directive to the shareholders or creditors who convincingly present their interests.

As long as the administration is not transferred, it belongs to all of the Board members.
(Article 366-367 of Turkish Commercial Code No 6102)

Source: Turkish Commercial Code No 6102

Is Sole Corporation Possible?

MuhasebeNews — Fri, 12 Oct 2018 12:00:26 +0000

1-Is Sole Corporation Possible?
Yes.
It is possible to establish a Sole Corporation in accordance with the New Turkish Commercial Code (It is called ‘’New’’, but it has been in force since July 1, 2012.

2-Which companies can be established as one-man business?
Limited Companies and Stock Companies can be established as one-man business without any other shareholder.

3-How was the administration previously?
According to the administration before the New Turkish Commercial Code, it was statutory obligation to be 2 shareholders for Limited Companies and 5 shareholders for Stock Companies. This obligation was abolished with the New Turkish Commercial Code.

4-Does the authorized signatory also belonged to a single person?
Yes.
The person who establishes a limited company as a sole corporation is also the authorized signatory.
A copartner (a share, a shareholder) can be also a member of board in his/her company and he/she may represent the company by himself/herself.

5-How is the authorization period determined?
The company is represented by the Directors in Limited Companies. The authorization period of the company may be unlimited. Particularly, if the company is one-man company and that person is the sole director, he/she will be assigned unlimited. The stock companies are represented by the board of directors. However, the members of the board of directors are assigned maximum for 3 years. After 3 years, the same person can be assigned once again as a member of the board of directors.

Source: Turkish Commercial Code (6102 and 6335)
Date: 3 February 2017

What is Joint Stock Company?

MuhasebeNews — Sat, 17 Mar 2018 06:00:35 +0000

1- WHAT IS JOINT STOCK COMPANY?
1.1- Joint-stock company is a company whose capital is declared and divided into shares and who is only responsible for its assets because of its debts.
1.2- Shareholders are responsible to the company with their shares that they undertake.

***Except special provisions, these parts of provisions are applied to joint stock companies being subjected to special provisions.

2- WHAT ARE INCLUDED IN THE SUBJECT OF JOINT STOCK COMPANIES?
Joint stock companies can be established for every kind of legal economical purposes and subjects.

3- WHAT SHOULD BE THE AMOUNT OF CAPITAL IN ORDER TO ESTABLISH A JOINT STOCK COMPANY?
3.1- Registered capital, which is undertaken as a whole in articles of incorporation, cannot be less than 50.000 Turkish Lira. As for non-public joint stock companies which accepts registered capital system showing the maximum realm of authority of board of directors for capital increase, initial capital cannot be less than 100.000 Turkish Lira. Minimum capital amount can be increased by the Council of Ministers.
3.2- Within the scope of this law, initial capital in joint stock companies with registered capital is compulsory to provide in the establishment and when they move into this system. On the other hand, issued capital represents the total amount of nominal value of issued shares.
3.3- Unless non-public joint stock companies have necessary conditions, they are able to log out of registered capital system by getting permission from Ministry of Customs and Trade. Moreover, if they fail to fulfil the conditions while logging in the system, they can be logged out of the system by the Ministry even if they have no claim.

***Provisions of article 12 of Capital Market Law dated 28.07.1981 and numbered 2499 are reserved.

Source: Turkish Commercial Code

What are the Features of One Man Company?

MuhasebeNews — Sat, 01 Jul 2017 06:54:16 +0000

The features of one man company:
1- With the New Turkish Commercial Code, it is possible to establish one man company.
2- One man company can be established during incorporation (at the beginning) or after the incorporation.
3- Board of Directors may consist of one or more than one person.
4- The sole owner constitutes Board of Directors. It is an obligation that decisions should be written in order to be valid.
5- The agreements between the sole owner and the company should be written. By comparison, the provision related to self-work will be applied in this case.
6- Furthermore, one-man limited companies are also subject to the same provisions.
7- Shareholder cannot become indebted to the company unless he/she discharges his/her debts originating from capital subscription and, company’s profits with its free reserves and retained losses correspond.
8- There can be one-man Board of Directors. Member(s) of the Board does not have to be shareholder(s). Moreover, persons except shareholders can be Member of Board.
9- If the number of shareholders reduces to 1 or the company turns into multi-partnership, Board of Directors should confirm it by making decision.

Source: Turkish Code of Commerce

Can Board of Directors Become Indebted to the Company According to Turkish Laws?

MuhasebeNews — Fri, 30 Jun 2017 10:40:56 +0000

A Member of Board cannot perform any action on behalf of himself/herself or other persons with the company without getting permission from the Board of Directors. Otherwise, The company may claim that committed action is invalid/void. The other party cannot assert this kind of a claim.

Within the scope of this prohibition;
1- A Member of Board cannot perform any action on behalf of himself/herself or other persons without getting permission from the Board of Directors; otherwise, the company may claim that commited action is invalid/void.
2- Member of Board who has no share and acquaintances/relatives of Member of Board having no share and listed in article 393 cannot become indebted (in cash) to the company. Company cannot pledge, issue guarantee, give the assurance, give any responsibilities and take over these persons’ debts. Otherwise, company’s creditors can directly pursue these persons for company debts in line with the amount that the company holds responsible.

Source: Turkish Code of Commerce

If a Legal Entity Becomes a Partner during Incorporations, What Should be Done?

MuhasebeNews — Fri, 30 Jun 2017 08:58:53 +0000

Legal entities can be assigned to the Board of Directors in Corporations and Limited Companies; however, real person(s) representing legal entities cannot be assigned as a Member of Board or a Director. If a legal entity is assigned, there should be a real person assigned as a representative.

There should be participation decision made by a legal entity. This participation decision should be notarized; furthermore, capitalization and its representative should be stated.

Source: Turkish Code of Commerce

Income from Capital Investment (Interest, Dividends, etc.) in Turkish Taxation System!

MuhasebeNews — Thu, 04 May 2017 10:50:23 +0000

Income from capital investment means any income such as interest, dividend, rent and as such derived from capital in cash or capital in kind. (Income from business activities, agricultural activities and independent personal services is not considered as income from capital investment.)

However, such capital income is not considered as income from capital investment, should they are earned (gained) through business, agricultural or independent professional activities.
Regardless of their sources, the following earnings are deemed to be income from capital investment:
– Dividends from stocks of every kind including jouissance shares, founder’s shares and interests and other remunerations paid to the stockholders in the preparatory stage of the corporation and earning from the securities issued by investment funds and investment trusts,
– Earnings from participation shares including the shares of limited companies, cooperatives and joint ventures,
– Dividends paid to the chairmen and the members of the board of directors,
– For institutions with limited tax liability and that submit annual or special tax return according to the Corporate Income Tax Law, the portion that remains after deduction of the corporation tax from the corporation earnings calculated before the deduction of the reductions and exemptions,
– Interests of every kind from bonds, treasury bonds, and earning from the securities issued by the Housing Development Administration and the Public Participation Administration,
– Interest from debt-claims of every kind particularly interest from banks and other financial institutions,
– Deposit rates,
– Profits from selling coupons of stocks and bonds before their maturity,
– Income from selling of dividends not accrued yet to the owners of the shares,
– Amount of discount received in return for all bills discounted,
– Dividends paid to those who lend money without interest and dividends paid in return of profit-Ioss participation notes and profit- Ioss participation accounts,
– Income from repurchasing agreement on bonds and securities,
– The income payments made by the retirement funds in the nature of legal entity aid funds, retirement and insurance companies,
– Income from Individual Pension System,
– All types of earnings derived from capital market instruments issued due to Capital Market Law.

In determining net income from capital investment, costs related to and allowed to be deducted from gross income include insurance costs, collection costs, and taxes and other levies, excluding income tax, paid for securities.

The mentioned elements are included in business profit when they are connected to the business activity of the recipient. In such case, this income is treated as business profit and become subject to the rules described earlier.

Source: Revenue Administration

Credit Suisse Bosses Cut Their Own Bonuses!

MuhasebeNews — Mon, 17 Apr 2017 07:23:04 +0000

Credit Suisse bosses cut their own bonuses by 40%!

Credit Suisse board of directors have decided to cut their own bonuses by 40% and keep total board pay at the same level as 2015 and 2016.

Credit Suisse chief executive Tidjane Thiam said that “I hope that this decision will alleviate some of the concerns expressed by some shareholders and will allow the executive team to continue to focus on the task at hand.”

Source: BBC