Number: 12

Date: 24/03/2017

Title:Matters of importance concerning the ordinary general assembly meetings of limited liability companies.

Pursuant to Article 617 of the Turkish Commercial Code (“TCC”) numbered 6102, the ordinary general assembly of limited liability companies shall convene annually within three (3) months as of the closing of the accounting period. Consequently, March is of high importance in terms of the general assembly of limited liability companies. Accordingly, companies with accounting periods as calendar year shall be holding their general assembly meetings until the end of March 2017 at the latest.

According to Article 617 of the TCC, provisions regarding joint stock companies on convocation, minorities’ right to convene and propose, agenda, proposals, general assembly meeting without convocation, preparatory measures, minutes and unauthorized attendance, excluding those regarding the Ministry delegate, shall be applied to limited liability companies’ general assembly meetings by analogy.

Important Issues of General Assembly Meetings

1. Convocation

In accordance with the Article 617 of the TCC, the general assembly shall be convened by the managers. The general assembly shall be called to session at least 15 days prior to the date of the meeting. That period can be extended or shortened as few as to ten (10) days by the AoA. Pursuant to Article 617’s reference to the provisions regarding joint stock companies, in the circumstance that the ordinary general assembly meetings are held through a call, as per the Article 414/1 of TCC, the general assembly is invited to the meeting as stipulated under the AoA, through an announcement published on the company’s website and in the Turkish Trade Registry Gazette published at least two weeks before. The invitation text and its content should be prepared in line with the legislation. The minimum content such as the date, time, and address of the meeting should must be included in the invitation text. In accordance with Article 416 of the TCC, if all shareholders have decided to hold the meeting without any invitation and if all shareholders or their representatives can attend throughout the meeting, ordinary general assembly can be convened without any invitation.

2. Decision on the agenda

The decision of the board of directors on the agenda of the meeting should be prepared carefully and the agenda items should be determined clearly.

3. Exclusion of voting right

As per the Article 619 of TCC,

. Those who have participated in the company’s management cannot vote on resolutions regarding release of manager.

. A shareholder who has transferred his/her basic capital shares cannot vote on resolutions regarding the company’s acquisition of its own basic capital shares.

. A shareholder cannot vote on the resolutions regarding approval of his/her activities conducted contrary to loyalty duty or non-competition obligation.

4. The Meeting and Decision Quorums

. The meeting and decision quorums are listed in Articles 620, 621 of the TCC. Accordingly, unless otherwise provided by the law or in the AoA, all general assembly resolutions shall be adopted with the simple majority votes represented in the meeting. Shareholders can be represented by proxy in the general assembly.

. Pursuant to Article 621, important general assembly resolutions can be adopted with at least two-thirds of represented votes together with the absolute majority of the total of basic capital shares with voting right.

. In the circumstance that an increased quorum is required for certain resolutions by law, the provisions in the AoA that further increase such quorum may only be accepted by the majority indicated in the AoA.

. Any amendment regarding the addition of causes for a shareholder’s removal from the company to the AoA afterwards may only be possible through a resolution made unanimously by all shareholders at a general assembly meeting.

5. Circulating resolution

Concerning the general assembly meetings of limited liability companies, making a general assembly resolution in the form of a “circulating resolution” is possible through getting written approvals for a shareholder’s suggestion about an agenda topic from the other shareholders without holding a physical meeting.

6. Minimum content of ordinary general assembly

Pursuant to Article 616, the general assembly’s non-delegable authorities are as follows:

. Approval of the year-end financial statements and the annual report of group of companies,

. Assignment and dismissal of managers fulfilling their tenure or being expelled,

. Assignment and dismissal of group auditor and auditors,

. Approval of the year-end financial statements and the annual report,

. Decision on distribution of dividend

. Determination of profit sharing

. Determination of managers’ salaries and negotiating on their acquittal

General assembly meeting and discussion book shall be made available at the general assembly meeting.

Following the end of meeting, the signed resolution shall be attached to general assembly meeting and discussion book and be presented to the Trade Registry Office of the place where the company’s headquarter is already resident if there are any issues subject to registration and announcement.

In the limited liability companies with a single shareholder, that one shareholder is authorized for all attributes of the general assembly. For those resolutions to be taken by the single shareholder standing as the general assembly, they are required to be in written form so as to gain validity.

 

Our explanations provided above include general information on the issue. No responsibility can be claimed against EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. due to the implications arising from the context of this document or emerging with respect to its context.


Best Regards,
Kuzey YMM ve Bağımsız Denetim  A.Ş.

 

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