At CCS Law, we understand the complexity of share transactions within joint stock companies in Turkiye, governed by Articles 489-501 of the Turkish Commercial Code (TCC). This guide aims to demystify the process of share transfer, providing clear insights into the types of shares and the necessary procedures to ensure a smooth transfer, appealing to our international clientele interested in Turkish corporate investments.
Understanding Share Types in Joint Stock Companies
In the realm of Turkish joint stock companies, owning shares equates to participating in both the profits and management of the company. The TCC recognizes shares as "pay senetleri," although the common term "hisse senetleri" (share certificates) is widely used. The types of shares and their transfer processes vary:
Bearer Shares: These shares must be fully paid and issued in certificate form before they can be transferred. If not fully paid, bearer share certificates are considered invalid.
Registered Shares: Issued under certain conditions when demanded by minority shareholders, representing at least one-tenth of the company capital in non-public companies and one-twentieth in public companies.
Interim Certificates (İlmühaber): Issued temporarily until the bearer shares are printed.
Naked Shares: Represent share ownership not tied to any physical certificate.
Legal Framework for Share Transfer
Transferring shares in a joint stock company can involve the complete or partial transfer of ownership rights. This transfer must align with the company's articles of association and the TCC. The process differs based on the type of share:
Bearer Shares: Transfer of ownership is effective through physical possession and requires notification to the Central Registry Agency (CRA) to be recognized legally.
Registered Shares: Transfer through endorsement and delivery of the share certificate, subject to fewer restrictions unless otherwise stipulated by law or the articles of association.
Is a Share Transfer Agreement Necessary?
While share transfers in joint stock companies are generally flexible, certain situations necessitate a formal transfer agreement, especially when transferring non-certificated shares or dealing with shares regulated by the CRA.
Share Transfer Formalities
A share transfer does not necessarily require notarization; however, formalizing the transaction through a notarized agreement can provide additional legal safeguards. Share transfers do not require registration but must be recorded in the company’s share ledger to be effective against the company.
Conclusion
Navigating the transfer of shares in Turkish joint stock companies involves understanding various share types and adhering to specific legal stipulations. At CCS Law, we offer expert legal services to ensure your share transactions are executed efficiently and in compliance with Turkish law. For further assistance, please contact us.