Summary: The realization of the transfer of principal capital shares of the limited companies which are established under a commercial title by one or more natural or legal entities and which are stock corporations, is subject to certain formal conditions in the Turkish Commercial Code and its justification. The validity of the share transfer is affected by many factors; it can be expanded or narrowed down with the article of association, also after the transfer is completed, the authorities of the general assembly has an influential power on the transfer along with the formal conditions.

Keyword: validity of share transfer, share transfer, formal condition of the share transfer, approval of the general assembly, article of association, transfer restriction provisions 


Within the scope of the 595th and ongoing provisions of the Turkish Commercial Code No. 6102, provisions affecting the transfer of shares were regulated. The most important conditions are: Carrying out all proceedings in written form regarding the transactions that give rise to the share transfer and the related transfer debt; Having the signatures authorized by the notary. Of course, following this transaction the authorization of the general assembly is required, unless otherwise stated on article of association

1.Share Transfer Agreement Being Generated in Written Form and Authorized in Notary

As of its nature, the share transfer agreement is a contract that gives rise to debt, so it is organized in written form rely on the Code. In this context, making both the transfer of the registered capital share and all transactions that give rise to debt in written form, is a point also specified in the justification of the law. It is possible that the commitments, as well as agreements assigning the obligation of the transfer, can all be considered as transactions that give rise to transfer debt, therefore, making them in written form is a formal condition.

Notary approval is sought after the registered capital share transfer agreement and transactions that give rise to debt are made in writing. A notary public is not authorized to review the content, it only has a limited authority to check if the signatures belong to the parties and to check if the formal conditions are met. It is possible to make the transfer of shares either by acting as principal or as a representative, however, when made with representation there must be a special authority included in the power of attorney.

The condition of making also the subsidiary liabilities in written form is anticipated. The most important of these are; the terms regarding the competition prohibition, preemption, rights of repurchase and purchase and contract penalty. These elements need to be written clearly and articulately in the contract.  The aim here is to warn the parties that they must specify their demands from each other (if there are any), otherwise, they cannot request any additional payment obligations or other demands.

2. General Assembly Approval

If it is desired to facilitate the transfer; If the provision regarding the unnecessity of the general assembly approval in case of share transfer is added to the master agreement of the company, no general assembly approval will be sought after the share transfer. However, since many companies do not even have a related provision in their master agreement, the provision of law has to be applied.

If it is desired to make the transfer difficult; It is also possible to add aggravating provisions to the company’s master agreement, in addition to the approval of the general assembly. The quorum for the decision can be aggravated, additional obligations can be imposed, for example, restrictions can be made regarding the persons who could be a transferee.. It is also possible to prohibit the share transfer, provided that it is added to the master agreement. In this case, if a share transfer is requested one day, it is required to make amendments again in the master agreement.

The general assembly can reject the transfer of shares without any reason. However; If there is a restrictive provision in the master agreement, it is possible to reject it by stating the reason accordingly. Even if the general assembly rejects it by stating the reason, It is also a matter of dispute whether this reason is valid. It is also possible that the general assembly would remain immobile to procrastinate the process, but in this case, the law assumes that the transfer has been approved if no decision is made within 3 months.

If an additional payment and ancillary payment obligation are stipulated in the company’s master agreement, a guarantee may be requested from the transferee because he is in the difficulty of payment. Another reason for refusal is that this guarantee is not given. However, the important point is; the obligation of additional payment and ancillary payment must be laid down. If this condition is not fulfilled; The general assembly will not be able to reject the transfer of shares based on the reason for not receiving the guarantee. The important point to be specified is; The general assembly reserves its right to reject without reason.

In cases where the Limited Company is single-partnered or two-partnered, the transfer of the principal capital share can be realized with the participation of these partners or the representatives of them. A partner may transfer all of their shares to another partner or may transfer some of them. In Limited Companies with two partners, where there is no other partner besides the two partners making decisions, there is no obstacle in acknowledging that this decision is made as a General Assembly decision. Because there is no General Assembly to approve this decision, other than the two partners. Hence, Hasan evaluation made by Prof. Hami Şener based on a Supreme Court Decision is as follows; In some exceptional cases, even if it is not stated in the partnership agreement that there is no need for it, the general assembly approval can still be unnecessary. Indeed, for example, if all partners have participated in the share transfer agreement and the action of claiming that there is no concurrence is qualified as a manner that requires abuse, then there is no need to make an approval decision.

3. Determination of the Real Value of the Principal Capital Share

In the reason of article 597 of the commercial law, if the company rejects the person who suggests to purchase the principal capital shares with real value and acquires them legally, the parties might disagree on the real value. It is said that, in this case, the provision requests that the real value is determined by the court. For example; In case the parties show the capital share value lower deliberately or fraudulently, the court while determining the real capital share value, will act by assuming that both parties know this fact.

4. Is Recording to the Share Ledger a Formal Condition?

Limited Companies must keep journals, ledgers, inventory books, share ledgers, books regarding decisions of the board of directors or general assembly meetings and negotiations.

Limited Companies have a book containing the principal capital shares. The name of this book is Share Ledger. If a share transfer is made, the ledger to which the transfer will be entered is the Share Ledger. The nature of the Share Ledger provides proof for those who own the company shares. In other words, the persons registered in the share ledger have the title of the company partner. The transfer of shares can only be entered in the share ledger if it is approved by the General Assembly. Entering the share transfer in the share ledger is not a constituent element of the transfer.

One of the problems frequently encountered in practice is how to enter the decision and records of share transfer in the books if it is failed to reach the commercial books of the company. Due to the disputes between the partners, the partner possessing the commercial books might be refusing to return these books. Moreover, the books might be lost or stolen. In this case, if the books cannot be reached, will the transfer process be deemed invalid? The answer to this question is no. Undoubtedly, if the commercial books have been lost or against the partner who has not returned the commercial books maliciously, the person who takes over the shares should be protected.

According to the 11th Article of the Communiqué on Commercial Books, if the decisions requiring the share transfer and the transfer itself cannot be entered in the commercial books for one of the specified reasons: “The decisions made by the director or board of directors in limited companies regarding the company management can either be recorded to the general assembly and negotiation book or an individual board of directors decision book can be kept. With this provision, the objections of the malicious partner who does not return the commercial books towards invalidating the transfer can be forestalled.

5. The Element of Registering the Transfer

The formal conditions of the transfer of principal capital shares are determined in article 595 of the Turkish Commercial Code, and apart from those, there are the transactions of notifying the transfer to the trade registry, which are not constituent.

Registering the transfer of shares to the trade registry is not a constituent transaction, but an explanatory one. If the Trade Registry Officer determines that the legal elements we have mentioned above are present, he/she registers the transfer to the trade registry. “As a matter of fact, since the process of registering to the share ledger is qualified as not constituent but explanatory, the registry director is obliged to examine whether the legal requirements sought for the registration are present or not.” The officer cannot comment on the cases in which he/she hesitates over registering. The transfer registered to the Trade Registry is announced to whom it may concern by being published in the Turkish Trade Registry Gazette.  


To make a valid share transfer in limited companies; the written form requirement and the notary approval must be fulfilled. After that, if there is no contrary provision in the master agreement, the approval of the general assembly is required. This approval may be rejected as explained above, with or without reason. After all these transactions are completed, the transfer must be registered and recorded to the share ledger. However, while the registration to the share ledger is a mandatory formal condition in the old law, the current commercial code has not rendered the share ledger registration as mandatory.

Att. Burcu Solmaz -Att. Furkan Yünlü

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