Wholesales of The Corporate Assets

In Turkish Trade Law, there are some regulations in the articles 418 and 421 pertaining to the quorums for decisions or meetings in the General Assembly. It is the deep-seated practice of the Supreme Court to declare the General Assembly decisions which have been taken without complying with the quorums for the meetings and decisions to be null and void.

Even if the Law does not stipulate the quorum number pertaining to the whole sales of the corporate assets, the 12th paragraph of the 22nd article of the Regulation on the Principles and Procedures of the General Assembly Meetings in Joint stock Companies as well as the Representatives of the Ministry of Customs and Trade Who Will Be Present In Such Meetings with the date 28.11.2012 and no: 28481 regulates that “In the General Assembly meetings, the decisions towards the wholesale of material amount of corporate assets shall be taken with the positive results of the share owners which at least constitute the 75% of the corporate capital. In case this quorum is not present in the first meeting, then the same quorum will be sought also in the second meeting.

In practice, while joint stock companies are making General Assembly decisions with regard to the whole sales of the corporate assets, they generally make the decision by the majority of the votes after organizing a meeting with the presence of the shareowners which at least constitute one fourth of the capital, in accordance with the article 418 on 421 of the Turkish trade Law and the provisions of other legislations. In other words, while they need to make the decision with the positive votes of 75% of the share owners, they are able to make a decision by a very low amount of positive votes. In this situation, the sanction which corresponds to the decision is the “Nudity” or in other words, “Nullity”.

Even if this situation is not considered as a nullity situation in the 447 article of the Turkish Trade Law, since the law does not limit the nullity situations in accordance with the 447th article, the decisions that have been taken without complying with the quorum provision for the decisions are null in accordance with the doctrine and the Supreme Court’ decisions. In this regard, even if they do not participate in and vote in the general assembly, the shareholders and this parties (creditors of the company, creditors of the shareholders, etc) provided that they prove its legal benefit, will be able to file a declaratory judgment action to declare that the general assembly decision is null and void, instead of cancellation of the general assembly decision, regardless from any certain timeframe. Because it is a declaratory judgment action, it is not subject to any proportional fees. The above mentioned legal case and the subjects have been handled in the lawsuit that we have filed in Antalya Trade Courts with regard to sales of the hotel that constitute a major part of the corporate assets, based on a decision which has been taken just in this way.