Common Contracts

Share Transfer Restraints in the Articles of Association under Turkish Law

July 26th, 2011

• Filed
  July 26th, 2011

In Turkish law, the articles of association is an agreement prepared in accordance with the principles and mandatory provisions regulating joint stock companies set forth in the Turkish Commercial Code (“TCC”) and signed by the founders to incorporate a joint stock company. Pursuant to the TCC, the internal organization, powers and duties of the branches and rights and responsibilities attached to the ownership of shares shall be stated in the articles of association. Provisions included in the articles of association in accordance with the principles and mandatory provisions of the TCC, called real provisions, bind not only the founders who signed the articles of association but also the existing and future shareholders as well as the company and its branches. However, the articles of association may also include provisions which are not required to be regulated pursuant to the TCC. These provisions are not considered mandatory provisions of the articles of association; therefore, rig