Limited company shareholders have certain rights and obligations arising from the title of partnership. Partnership rights in a limited company are examined in two categories in the doctrine. These are the rights of partners regarding their assets and the rights of partners to participate. You can access detailed explanations about the partnership rights listed below, which are considered important, from the relevant sub-headings.
Rights of company partners regarding their assets;
- Right to share profits,
- Right of liquidation
- The right to have a new share (pre-emption),
- The right to transfer the share capital,
- Right of veto
Right to particiape of the company’s partners;
- Right to vote
- The right to receive and review information
- The right to request a private company audit,
- The right to participate in the General Board and to express opinions
- The right to request termination of the company for a just cause
- The right to file an annulment and nullity case against the General Board resolutions
İçindekiler
The right to share profits is one of the irrevocable rights of partners. As the main purpose of the limited company is to make a profit and this issue is related to the basic structure of the company, these can be shown as the reasons for this situation. Therefore, the right of the partners to share profits cannot be taken away by a provision to be included in the contract.
Profit shares can be distributed to shareholders only from the company’s net profit for the year and from the reserves set aside for this purpose. Unless otherwise agreed in the Articles of Association of the company, the profit share is calculated in proportion to the nominal value of the capital share. In addition, the amount of additional payment obligations fulfilled is added to the nominal value in the calculation of the profit share.
The General Board decides the distribution of the profit share. Moreover, this authority is among the inalienable powers of the General Board. However, the body that will make the profit distribution proposal to the General Board is the director or the board of directors.
2) Right of Liquidation
Liquidation is the process of closing all the accounts of the company that has ceased its operations. The remaining assets as a result of the liquidation are distributed to the partners in proportion to their capital shares unless otherwise specified in the Articles of Association.
To the extent that the company issues new capital shares, the existing company partners have the right to purchase these shares first. Unless there is a contrary determination in the company’s Articles of Association or the capital increase decision, the company’s shareholders have the right to purchase primarily in proportion to their capital shares.
Limited company partners have the right to transfer their shares. Even if it is possible to limit or abolish this right by the Articles of Association of the company, the partner’s right to withdraw from the partnership remains over in the presence of just causes.
5) Right of veto
Provisions granting the right of veto to determined or determinable partners are regulated in subparagraph 1/e of Article 577 of the TCC, and it is stated that these will become binding as long as they are included in the company’s articles of association. Unlike other rights, the right of veto is a right granted to the personality of the partner, not to the capital share. For this reason, in order for the partner to have this right, this right must be clearly understood in the Articles of Association.
6) Right to vote
One of the indispensable rights of limited company partners is the right to vote of partners. The right to vote can be exercised by the partner itself personally or through its representative. The right to vote of shareholders is also determined according to the nominal value of the capital shares.
As a rule, each partner has at least one right to vote. Unless a higher amount is stipulated in the company’s Articles of Association, every 25 TL gives one voting right. However, it is possible to limit the voting right or to grant privileges by the Articles of Association. In this case, for the condition of binding the right to vote to the capital share, the minimum capital share in the company must not be less than 10 percent of the capital. Privileges can be established on voting rights by differentiating the nominal values of the shares. However, it is indicated that this privileged vote is not allowed to be used in any case and the privileges will be ineffective in case of voting on the following issues;
- Election of the auditor.
- Selection of a special auditor for the audit of some parts or the whole of the company management
- Making a decision on the filing a liability case
7) The Right to Receive and Review Information
Shareholders of limited companies have the right to receive information and review the matters concerning the company. It is the legal right of the shareholders to ask the company managers questions about these issues and to expect answers. Managers shall reject the partner’s requests for information and reviewing only if there are certain reasons. For example, it is possible to avoid providing information to partners due to company secrets. However, if one of the partners has been informed about the same issue or a review has been made before, it becomes obligatory to give the same right to the other partners, and in this case, the managers cannot rely on the justification of company secret.
In the event that the right of the company partner to receive information and review is unfairly prevented, the partner has the right to apply to the court and request a decision on this issue.
8) Right to Request Termination of the Company for a Just Cause
A limited company partner may request the termination of the company by applying the court if there are just causes. However, instead of ruling on the dissolution of the partnership, the court may decide to dismiss the partner who wants the dissolution from the company by making them pay the actual values of their shares. This situation is important for the continuity of stock corporations.
9) Right to File a Lawsuit for Rescission or Denial of the Decisions of the General Board.
The shareholders of the company have the right to put forward the annulment or nullity of the General Board resolutions by filing a lawsuit. The right to file a lawsuit is considered to exist because they have the title of direct partnership in some cases. In order for the partner of the company to file an action for annulment against some General Board resolutions, it is required that the partner shall attend the meeting, vote negatively for this decision and record its opposition to the resolution in the minutes. The lawsuit filed by the partner who does not meet these conditions is decided to not have the capacity to file a lawsuit, and the lawsuit is dismissed.
The right to file an action for cancellation or nullity is one of the indispensable partnership rights of every shareholder.
Conclusion
The rights of the partners in limited companies due to their title of partnership have been discussed in general terms above. It is important for the partners to know their rights and to exercise them correctly in order to prevent loss of rights. You can contact our team for legal questions and problems related to the subject.
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
