İçindekiler
Duties and Powers of the General Board in Limited Companies
In a limited company, the General Board, as the decision-making body of the company, has the authority to make decisions on the issues envisgaged in the Law (Turkish Commercial Code) or the contract. The General Board is the decision-making body formed by the presence of all the partners. But it does not have a permanent position in the company. It performs its duties by meeting ordinarily or extraordinarily in certain periods of the year in the presence of compelling reasons. General Board resolutions in limited companies are taken at the meetings that the partners held in accordance with the procedure stipulated in the Law or the Articles by providing the minimum majority envisaged n the Law. General Meetings have various types, such as ordinary and extraordinary, called and non-called General Meetings, and important decisions regarding the company are taken at these meetings.
In this bulletin, we have exlpained the duties of the General Board in limited companies and the authorities it can use.
1) The General Board: the Decision-Making Body of the Company
In limited companies, the General Board has the authority to take very important decisions such as the appointment of the directors and auditors of the company, the acquittance of the directors, the determination of the profit and gain margins to be distributed, the change of the company contract, the reduction and increase of the capital, the dismissal of a partner from the company and even the dissolution of the company. At the same time, the General Board is responsible for exercising these powers. Because the Law clearly states that these powers cannot be transferred to another body or person in a limited company. In other words, in a limited company, another body or person cannot use these powers.
Resolutions taken by the General Board are implemented by the Board of Directors. The General Board has important powers over the Board of Directors, and it also exercises a kind of supervisory authority while taking some actions such as the appointment and acquittance of directors.
2) Duties and Powers of the General Board
Article 616 of the Law clearly states the duties and powers to be exercised by the General Board in limited companies. While it is clearly stated in the text of the article that some of these duties and powers are inalienable, it is envisaged that some of them will become inalienable powers if they are written in the Articles of Association. These powers are discussed under two separate headings below.
2.1) Duties and Powers of the General Board that are Inalienable
In accordance with the Turkish Commercial Code, the issues that require necessarily a General Board resolution in limited companies are listed as follows;
- Approval of the group’s year-end financial statements and annual reports.
- Appointment and dismissal of auditors,
- Appointment and discharging of directors,
- Determination and remuneration of directors’ wages.
- Approval of capital share transfers.
- Approval of the year-end financial statements and the annual report, making a decision on the dividend, determining the profit shares.
- Requesting the court to dismiss a partner from the company.
- Authorization of the director to acquire the company’s own shares or approval of such an acquisition.
- Amendment to the company’s contract.
- Dissolution of the company.
- Making decisions on matters that the General Board is authorized by law or company agreement or that the directors present to the General Board.
The duties and powers listed above cannot be exercised by another body of the company due to the Law. For example, it is not possible for the director or the Board of Directors to take decisions on these issues.
2.2) General Board Powers that Have Become Inalienable as They Are Written in the Articles of Association
Apart from the powers specified as inalienable in the Turkish Commercial Code, there are also duties and powers that will become inalienable as they are written in the Articles of Association. These are listed one by one in the Law. If one or more of these duties and powers are written in the articles of association, these powers become inalienable powers for the General Board as per the law. For this reason, there is no need to explain in the Articles of Association that these duties and powers are inalienable. The powers that will become inalienable for the General Board by simply writing them in the Articles of Association are as follows;
- Approval for the establishment of a mortgage on the capital shares,
- Issuing internal directives about ancillary performance obligations,
- Dismissal of a partner from the company for the reasons stipulated in the company’s contract.
- The cases where the Approval of the General Board is sought in accordance with the Articles of Association and the approval of the activities of the managers.
- Making a decision on the use of the right to be offered, pre-emptive, repurchase and purchase.
- Granting the necessary permission for the approval of the managers and partners to engage in activities inconsistent with the obligation of loyalty to the company or the prohibition of competition, in case the shareholders do not find the approval of the shareholders adequate pursuant to the fourth paragraph of article 613 of the Articles of Association of the company.
Conclusion
In limited companies, the inalienable General Board powers are clearly regulated in the Turkish Commercial Code, and the use of these powers by the director or the Board of Directors or any other body is prohibited. In this way, the distinction of duties and powers between the Board of Directors, the management body of the company, and the General Board, the decision body, has become explicit. For more information about limited companies, you can see our other bulletins and articles or call us and request legal aid.
Best Regards
References
ALTAŞ, Soner, (2016), Türk Ticaret Kanununa Göre Limited Şirketler, Seçkin Yayıncılık, Ankara.
BİLGİLİ, Fatih/DEMİRKAPI, Ertan, (2013), Şirketler Hukuku Dersleri, Dora Yayıncılık, Bursa.
Turkish Code of Commerce
