Decision-Making Guide in Limited Company General Assembly

The general assembly is the decision-making body formed with the participation of all the partners of the limited company. It convenes once or more than once a year and takes decisions with the quorum of meetings and resolutions stipulated in the Law or the company contract on the matters authorized by the company. The majority required to take a decision in the general assembly of a limited company varies according to the subject of the decision to be taken. Since the determinations on this subject are widely included in various articles of the Turkish Commercial Code and it is sufficient to refer to the provisions of joint stock companies on some issues, it takes time or presents difficulties for those who are not experts in the subject to reach the right answer on the question.

Our first aim in this guide, which we have created by compiling the most curious meeting and decision quorums in the general assembly of limited companies, is to help those who are interested in the subject by providing clear and general information. Below, short and concise answers to the basic questions about which decisions should be taken by which majority in the general assembly are tried to be given.

1. What is the Quorum Required to Convene the General Assembly of the Limited Company?

A minimum meeting quorum for the general assembly meeting has not been determined in the Turkish Commercial Code. For this reason, even if only one partner is present at the meeting, he can take a decision on the issues on the agenda. Only regulations regarding decision quorum are included in the Law, a preference was made to facilitate decision making in limited liability companies by not stipulating meeting quorum.

2. What are the Quorums Required for Taking Decisions in the General Assembly in Limited Companies?

Limited company general assembly resolution quorums should be analyzed by dividing them into two as general quorums and special quorums. Accordingly, the decision quorum that will be valid in cases where a higher quorum is not foreseen in the Law is called general quorum. Special quorums, on the other hand, are the quorums that will be valid in the general assembly resolutions, which are expected to be accepted with a larger number of votes, since they are considered more important by the legislator. Below are the numbers according to the subject of the decision.

In the law, a determination regarding the decision quorum in limited companies is included in the text of the article. According to this determination, all general assembly decisions in limited companies are taken with the absolute majority of the votes represented at the meeting. However, if a different quorum is determined in the Law or in the articles of association of the company, that number will be a valid quorum.

It should be noted that if aggravated quorums are sought in the Law for taking certain decisions, the articles of association that will aggravate these quorums can only be accepted with the majority stipulated in the articles of association.

(Turkish Commercial Code article 620).

3. With What Frequency Should Decisions Be Taken Regarding the Amendment of the Company’s Articles of Association?

Unless otherwise stipulated in the articles of association, the articles of association can be changed by the decision of the partners representing two-thirds of the capital. However, in the taking of some decisions requiring amendment of the articles of association, if more severe quorums are sought as stipulated in article 621 of the Turkish Commercial Code, these numbers will be valid.

(Turkish Commercial Code art. 589).

4. With what majority should the General Assembly Decision on Changing the Business Subject of the Company be taken?

In order for the decision to change the company’s business subject to be taken at the general assembly, more than half of the entire share capital with the right to vote must be present and at least two-thirds of the votes represented at the meeting must vote for the resolution.

(Turkish Commercial Code article 621).

5. With What Majority Should Decisions on Predicting the Preferred Shares in Voting, Limiting, Prohibiting or Facilitating the Transfer of Basic Capital Shares?

In order for the above-mentioned decisions regarding the basic capital shares to be taken at the general assembly, more than half of the entire capital holding the right to vote must be present and at least two-thirds of the votes represented at the meeting must vote for the resolution.

(Turkish Commercial Code article 621).

6. With what frequency should the decisions regarding the increase or decrease of the basic capital be taken?

The affirmative votes of the owners or representatives of the shares constituting at least seventy-five percent of the capital are required in order for the decision to reduce the basic capital to be taken at the general assembly . If this majority is not achieved in the first meeting, the same majority will be sought in other meetings to be held.

 

The decision to increase the basic capital can be taken on the condition that at least two thirds of the votes represented and the absolute majority (more than half) of the whole of the basic capital having the right to vote are together.

 

(Turkish Commercial Code art.592, art.473/3, 421/3, 621).

7. What is the Quorum Required for Decisions on Division, Merger and Type Change of the Company?

In limited liability companies, on the condition that they own at least three-quarters of the capital, the decision of division, merger and change of type can be taken at the general assembly with the decision of three-quarters of the partners.

(Turkish Commercial Code m.151/1, art.189/1-c, art.173/2).

8. What is the Majority Required for the Dissolution of the Company?

In order to decide on the dissolution of the company, more than half of the total capital that has the right to vote in the general assembly must be present and at least two-thirds of the votes represented at the meeting must vote for the resolution.

(Turkish Commercial Code article 621).

9. What is the Majority Required for Changing the Company Headquarters?

A special decision quorum is also stipulated for the change of the company headquarters, and in order for this decision to be taken at the general assembly, more than half of the entire capital with the right to vote must be present and at least two-thirds of the votes represented at the meeting must vote for the resolution.

(Turkish Commercial Code article 621).

10. With what majority should the decision to expel a partner from the company?

In order to apply to the court to dismiss a partner from the company for justified reasons and to take the decision to dismiss a partner from the company for the reason stipulated in the articles of association, more than half of the entire capital with voting rights must be present and at least two-thirds of the votes represented at the meeting must be taken . must vote.

A change in the contract regarding the inclusion of the reasons for the dismissal of a partner from the company later in the company agreement is made possible by the unanimous decision of all partners representing the company’s capital at the general assembly meeting.

(Turkish Commercial Code article 621).

11. With What Majority Can Decisions on Limiting or Removing the Preemptive Right be Taken?

In order to limit or abolish the pre-emptive right, it is taken by the presence of more than half of the entire share capital that has the right to vote, and by affirmative votes of at least two-thirds of the votes represented at the meeting.

(Turkish Commercial Code article 621).

12. What is the Quorum for Changes in the Articles of Association that Bring New Obligations to the Partners or Increase the Existing Obligations?

General assembly resolutions that change the articles of association, stipulate additional or ancillary performance obligations, or increase existing obligations can only be taken with the approval of all relevant partners.

(Turkish Commercial Code article 607).

Conclusion

In this bulletin, it has been tried to give answers to the meeting and decision quorum required for taking a decision in the general assembly of the limited company, within the framework of the provisions of the Turkish Commercial Code. The details and exceptional issues related to the subject were not mentioned. For detailed information or other questions that you cannot access from this content, you can visit the article titled “Qualifications for Meetings and Resolutions at the Limited Company General Assembly” in the Blog section of our website, or you can choose to get detailed information by contacting our team.

Regards.