According to Turkish Commercial Code (“Code”) joint stock companies must convene the annual general assembly meetings at least once in a year. In these meetings the resolutions about financial statements, activity reports, election and release of board members, dividend distribution and other related issues are taken. Although the general assembly meetings must be held within 3 months after the fiscal year ends, the Code and the Regulation on the Procedures and Principles of General Assembly Meetings of Joint Stock Companies and Representatives of the Ministry of Customs and Trade to be Present at These Meetings (“Regulation”) regulate specific conditions in which the general assembly meetings may be postponed. In this article, we would like to mention about these conditions.
1-Request of The Minority Shareholders
According to the article 420 of the Code, Minority shareholders can request postponement of discussion of financial statements and affiliated issues. The “Minority” means the shareholders who holds 10% of the capital in joint stock companies and 5% of the capital in public joint stock companies. With the request of the Minority, general assembly meeting is postponed for a month with a decision of the meeting chairman without needing a general assembly decision.
If, no response has been given in accordance with the principles of honest accountability by the relevant parties, regarding the points of the financial statements that are objected to and recorded in the minutes, the Minority may request to postpone the discussion of the financial statements again. In this case, the meeting shall be postponed to one month later, once again.
2- Failure to Provide or Loss of the Meeting Quorum
The Regulation stipulates specific quorum for some resolutions such as transferring the headquarter of the company to abroad, reduction of capital, liquidation of the company, amendment on the field of operation. The specific quorum must be preserved during the meeting. If this quorum is not provided in the first meeting, the same quorum must be provided in the second meeting to be held.
Article 28/1 of the Regulation specifies that if the minimum meeting quorum regulated in the Code and the articles of association of the company cannot be met before the beginning of the general assembly meeting, the meeting shall be postponed. In addition, although the minimum meeting quorum has been reached before the meeting commences, if the decision quorum calculated per the list of attendees is not represented during the meeting, the meeting shall be postponed.
3- Failure to Provide Electronic General Assembly System
The article 1527 of the Code, enables general assemblies to be held in electronic environment. In order to be able to hold meetings in electronic environment, there must be an article in the articles of association of the company. If it is determined that the conditions stipulated under the Regulation on the General Assembly Meetings in the Electronic Environment in Joint Stock Companies are not met at the general assembly meeting, the meeting may be postponed by taking the Ministry representatives’ opinion. At the general assemblies of the joint stock companies which implement the electronic system for participation, there must be a representative from the Ministry of Trade.
4- Due to Security Reasons
The regulation stipulates that if it is determined that the general assembly cannot be hold due to security reasons, meeting can be postponed by obtaining the opinion of the law enforcement officers and the representative of the Ministry.
5- By the Decision of the General Assembly
According to the Article 28 of the Regulation, general assembly meeting can be postponed with the resolution of the general assembly without having any reason. This resolution must be taken before discussion of the agenda commences.
Lastly, we would like to state that the second or postponed meeting shall be deemed as continuation of the first meeting. Therefore, the agenda of the second meeting should be same with the previous one. The general assembly shall be called for the second meeting based on the call procedures stipulated in the law and/or in the articles of association. If the meeting is postponed due to the request of the Minority, the postponement decision shall be published in the Turkish Trade Registry Gazette and announced on the website no later than five days from the decision.
Av. Dilara KARTALOĞLU KILIÇ
TARLAN-BAKSI AVUKATLIK BÜROSU
AV. AYLİN TARLAN- AV. DERYA BAKSI