The fact that company management is in the hands of majority shareholders in joint-stock and limited companies and that the majority is effective in taking decisions leads to the protection of the shareholders who are the minority. Since the principle indicating that the shareholders shall benefit from the partnership rights at the rate of their capital share in corporations is adopted, the partners who have more shares in the company are effective. The decisions taken by the majority of the company may violate minority rights. While the majority shareholders take decisions in line with their own interests, the minority has no say in these decisions. This issue causes an unfair situation. The rights granted to minority shareholders, which enable the aforementioned injustices to be eliminated to a certain extent and serve to maintain the balance of interests within the company, are the subject of this bulletin.
İçindekiler
Minority shareholders are the shareholders who own 10% of the limited company’s capital. This ratio may be less pursuant to the company’s Articles of Association. For example, shareholders who own or jointly own a 5% capital share may be considered as minority. However, the maximum ratio is 10%.
2) What Are the Rights Granted to Minorities?
In Limited Companies, it is possible for the minority to benefit from the right to participate effectively in the management of the company on the basis of some of their rights. These rights are listed below;
The right to call the General Board meeting and add an item to the agenda; according to Article 411 of the TCC, the shareholders constituting at least one-tenth of the capital may request the board of directors to call the General Board for a meeting. If the general Board is already to be convened, the issues that they want to conclude shall be put on the agenda by stating the necessary reasons and the agenda in writing. The request for the call and adding an item to the agenda is made through the notary public. If the board of directors accepts the call, the General Board is called for a meeting to be held within forty-five days at the latest; otherwise, the call is made by the claimants.
All the rights given to the shareholders and listed below can also be exercised by the minority.
The right to participate in the General Board and to express an opinion; minority shareholders may attend the General Meetings of the company and express their opinions at these meetings.
- The right to request a private company audit,
- The right to file a liability lawsuit against the directors,
- The right to file a lawsuit for rescission or denial of the decisions of the General Board.
- The right to receive and review information
- The right to request postponement of balance sheet negotiations,
- The right to participate in management.
Conclusion
It is possible for the shareholders holding the majority of votes at the General Board to take decisions by ignoring the rights of the minority shareholders and manage the company accordingly. Some rights have been granted in order to strengthen the hand of the minority against the authority of the majority. In this way, imbalances that may cause conflicts of interest within the company are prevented. Thanks to these regulations, which contribute to the minority shareholders’ influence on the General Board resolutions and increase their accountability by auditing the company, it is ensured that the minority shareholders can defend their rights against the majority.
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
