The long-awaited “Regulation regarding the Procedure and Principles of the General Assembly Meetings (“GA”) of Joint Stock Companies (“JSC”) and Government Observer of Ministry of Customs and Trade” (the “Regulation”) has recently been published in the Official Gazette. It sets forth various amendments regarding the GA meetings of JSCs.

The most important issue governed by the Regulation is the list of the GA meetings where attendance of a Ministry Observer (previously referred to as “state commissary”) is required. According to the list set forth by the Regulation, the Ministry Observers must attend the following GA meetings:

1) All of the GA meetings of the JSCs, the establishment of which are subject to the authorization of Ministry (the “Ministry”),

2) All of the GA meetings which are made abroad,

3) All of the GA meetings which are held electronically, and

4) The GA meetings where the following agenda items will be discussed:

● capital increase,

● capital decrease,

● adopting the registered capital system,

● abandoning the registered capital system,

● amendments in the articles of association regarding change of the subject of activity, merger, demerger and change of form of the company.

Furthermore, the conditions of being appointed as a Ministry Observer have been aggravated. The Ministry Observers must be at least be a university graduate and must also succeed at the exam which would made by the Ministry. Also, the Ministry Observers which would attend electronically held general assembly meetings must attend a certificate program about the procedure of such meetings and succeed at the exam of the certificate program.

Another important change relates to the preparation of the internal directive referred to under the new Turkish Commercial Code. The Regulation sets forth that the internal directive must be prepared by the Board of Directors, then submitted to the approval of the General Assembly and then registered with the trade registry within 15 days following the approval of the GA. The internal directive must also be announced at the internet sites of the companies.  The Regulation also sets forth a deadline for this matter: the internal directive must be submitted to the approval of the GA the latest in the ordinary meeting held in 2013.

At least the following issues must be described in an internal directive:

1) entrance to the place of meeting and opening of the meeting,

2) convening of the Presidential Board of the meeting,

3) the duties and authorities of the chairman of the Presidential Board,

4) procedure to be followed for the actions prior to the discussion of the agenda,

5) agenda,

6) procedure for declaring opinion and voting during the meeting,

7) writing of the minutes of the meeting and

8) the procedure to be followed after the meeting.

There is no doubt that JSCs will welcome the Regulation as it sheds light on various points left open by the new Turkish Commercial Code.

Ali Ozan Karaduman
Deniz Yeltekin