General Meetings in limited companies are held in two ways: ordinary and extraordinary General Mmeetings. Ordinary General Meetings must be held every year within 3 months following the end of the accounting period and at least once a year. In this bulletin, we have explained the ordinary General Meeting in limited companies and the resolutions to be taken at it, and finally the sanctions for not holding the ordinary General Meeting are mentioned.
İçindekiler
1) Calling and Procedure for the Ordinary General Meeting
How to call the ordinary General Meeting in limited companies shall be determined in the company’s Articles of Association. In accordance with this procedure;
- The meeting call must be made through the announcement to be made on the company’s website and in the Turkish Trade Registry Gazette.
- In addition, the meeting date and the agenda must be sent to the partners in the stock register of the newspapers where the announcement will be made or will be published, via certified letter with return receipt requested.
- A call is also required for companies that use the electronic methods to attend the Meeting.
The call must be made at least 15 days before the meeting will be held. In the Articles of Association, this period may be longer or it can be shortened up to ten days. However, it is not possible to determine a period shorter than 10 days. Meeting and announcement days will not be taken into account in the calculation of these periods.
The following issues should be included in the meeting call;
- Date and time of the meeting
- Place of the meeting
- Agenda items
- If there is a contract amendment on the agenda, the old and new versions of the amended articles
- In the announcement of the Ordinary General Meetings; the presence of the partners at the specified company headquarters and branch addresses for the purpose of examining the financial statements, consolidated financial statements, the annual report of the board of directors or the director, the audit report and the apportionment proposal.
- Who made the call
- If the first meeting has been postponed, the meeting quorum to be sought in the new meeting due to the postponement
2) Agenda of the Ordinary General Meetings
In Article 617/3 of the TCC, it is stated that the provisions on the agenda of joint-stock companies will also be applied to limited companies by analogy. The ordinary General Meeting agenda of the limited company is determined by the callers.
The ordinary General Meeting agenda in a limited company includes the following issues;
- Opening and forming the meeting chairmanship.
- Reading and discussion of the annual report prepared by the director or the board of directors
- Reading the auditor’s reports.
- Reading, negotiation and approval of financial statements.
- Acquittance of the members of the board of directors.
- Determining the usage of the profit, the profit and gain margin ratios to be distributed.
- Determining the remunerations of the members of the Board of Directors and the rights such as attendance fees, bonuses and premiums.
- The approval of the appointment by the General Board if there has been a decrease in the membership of the Board of Directors during the activity year and the Board of Directors has appointed a new member.
- Election of the members of the Board of Directors whose incumbencies have expired, and appointing their incumbencies if they are not specified in the Articles of Association.
- Election of the auditor.
- Other matters to be considered.
Other matters that may be considered and stated in the last article shall also be clearly written on the agenda. An agenda item such as “other matters to be considered” cannot be determined before the subject to be discussed has been determined in advance and written on the agenda.
“Any subject to which the General Board has authority by law and the articles of association and that constitutes the agenda of the extraordinary General Meeting may be included in theordinary General Meeting agenda.
If the minority applies within the time limit, the issues that they want to discuss are put on the agenda by the board of directors.”
3) Persons Authorized to Attend in the Ordinary General Meeting
Each partner may attend the ordinary General Meeting by himself or through a representative who is or is not a partner. The right to attend the General Meeting is one of the rights committed to the title of partnership and cannot be prevented. As in joint stock companies, also in limited companies, a Ministry representative shall not be required to attend
4) Are there any sanctions for not holding the Ordinary General Meeting?
Ordinary General Meetings must be held every year within 3 months following the end of the accounting period and at least once a year. However, no judicial or administrative penalty was envisaged for not holding the meeting within this period.
There is no direct legal sanction for not holding the ordinary General Meeting İn time or at all. However, if the general assembly cannot convene for a long time, shareholders or company creditors have a right to request the dissolution of the company from the court. Even in this case, the decision of the court is to give some period to bring the situation of the company into compliance with the Law, and- if the situation is not corrected despite this,- to dissolve the company (TCC art.636/1)
Conclusion
Ordinary General Meetings are the meetings where the appointment and acquittence of company directors, the company’s financial statements and annual activity reports, profit distribution and issues related to an operating period are discussed and resolved. General Meetings hold regularlly, ensure that the accountability of the company management is kept under control, and it allows the partners to be aware of the company’s activities and to have regular information about the company’s course and profitability. In addition, as a result of the General Meeting not being held for a long time, it may eventually lead to the dissolution of the company.
In ordinary General Meetings, there are usually disagreements about the release of directors and the approval of the annual reports. You can contact our team for your legal questions and problems in the limited company ordinary general Meeting.
Best Regards.
References
ALTAŞ, Soner, (2016), Türk Ticaret Kanununa Göre Limited Şirketler, Seçkin Yayıncılık, Ankara.
Turkish Code of Commerce
Regulation on the Procedures and Principles of General Meetings of Joint Stock Companies and Ministry Representatives to Attend These Meetings
