The Turkish Commercial Code (TCC) plays a vital role in regulating business activities and commerce in Turkey. Enacted in 1956 and subsequently revised in 2012, the TCC serves as the primary legal framework for commercial transactions, corporate governance, and the establishment and operation of companies in Turkey. In this article, we will provide a comprehensive overview of the Turkish Commercial Code, discussing its key features and provisions.
Key Provisions of the Turkish Commercial Code
- Company Formation and Governance: The TCC sets out provisions for the establishment, organization, and governance of companies. It classifies companies into several types, including joint stock companies, limited liability companies, and partnerships. It defines the rights and responsibilities of shareholders, the requirements for share capital, and the rules for corporate governance.
- Corporate Contracts: The TCC regulates various corporate contracts, such as share transfer agreements, merger and acquisition transactions, and joint venture agreements. It provides guidelines for drafting and enforcing these contracts, ensuring transparency and fairness in business dealings.
- Directors’ Duties and Liabilities: The TCC imposes specific duties on company directors and executives to act in the best interests of the company. It outlines their responsibilities, including fiduciary duties, disclosure requirements, and conflict of interest provisions. Directors can be held liable for any breaches of their duties, ensuring accountability and protection for shareholders.
- Capital Markets and Securities: The TCC governs capital market activities and securities offerings in Turkey. It establishes rules for public offerings, listing requirements, and disclosure obligations for publicly traded companies. These provisions promote transparency, investor protection, and fair market practices.
- Commercial Transactions: The TCC regulates various aspects of commercial transactions, including sales contracts, agency agreements, and distribution agreements. It provides rules for contract formation, performance, and termination, ensuring clarity and legal certainty in business dealings.
- Insolvency and Bankruptcy: The TCC sets out provisions for insolvency and bankruptcy proceedings. It aims to protect creditors’ rights, facilitate the restructuring of financially distressed companies, and ensure a fair and efficient resolution of insolvency cases. The TCC also introduces mechanisms for debt restructuring and preventive restructuring to help financially troubled businesses recover.
- Corporate Governance and Disclosure: The TCC emphasizes the importance of corporate governance and disclosure requirements. It establishes rules for financial reporting, auditing, and disclosure of material information to shareholders and the public. These provisions enhance transparency, accountability, and investor confidence in the Turkish market.
- Consumer Protection: The TCC includes provisions to protect consumers’ rights in commercial transactions. It sets standards for product quality, safety, and warranties, and establishes rules for distance selling and unfair commercial practices. These measures aim to safeguard consumers’ interests and ensure fair business practices.
The Turkish Commercial Code serves as a crucial legal framework for businesses and commercial transactions in Turkey. Its provisions govern company formation, corporate governance, commercial contracts, capital market activities, and insolvency proceedings. By providing a comprehensive set of rules and regulations, the TCC promotes transparency, fairness, and investor confidence in the Turkish market. It establishes a solid foundation for conducting business and facilitates economic growth in the country. Understanding the key provisions of the TCC is essential for companies and entrepreneurs operating in Turkey, ensuring compliance with the law and facilitating successful business operations.