Questions About General Assembly

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It is set out in articles 616-622 of the Turkish Trade Law.

1 – When are the ordinary general assembly meetings held?
For the limited liability companies, it is obligatory to hold an ordinary general assembly meeting within three months following the ending of the relevant accounting period and at least once in a year.

2 – Who invites the general assembly to the meeting?
For the limited liability companies, the company manager (or the board of directors if there is more than one manager) is entitled to invite the general assembly to ordinary meeting.

3 – When and how are the partners invited to the general assembly?
The limited liability company partners are invited to the ordinary general assembly meeting through the announcement published in the Turkish Trade Registry Gazette or through other announcement methods (such as invitation in a local newspaper) if stated in the articles of association of the company or through the announcement posted on the website for the companies who are obliged to open a website. In addition to these announcements, the newspapers, where the announcement is published or will be published, as well as the meeting date and the agenda must be notified to the partners stated in the share ledger through a registered and reply-paid letter. The general assembly is invited for the meeting at least fifteen days before the meeting date.

4 – Which matters are provided in the invitation announcement?
For the announcements and the letters sent to the partners for inviting the general assembly for a meeting, “the meeting date and time; the meeting place; the agenda; the former and new versions of the article(s) if the agenda contains an amendment in the articles of association; the information on who invites for the general assembly; and that the financial statements, consolidated financial statements, annual report of the manager/board of directors and profit distribution proposal is available for the examination of the partners at the head office and branches, by providing the relevant addresses”. The announcement also provides a sample power of attorney for the ones who will be represented by a deputy in the general assembly meeting.

5 – What are the items of the agenda?
The following items, respectively, are available in the agenda of the ordinary general assembly meeting:

a) Opening and election of meeting committee.
b) Reading and discussing the annual report prepared by the manager or board of directors.
c) Reading the auditor reports, if the company is subject to audit.
d) Reading, discussing and approving the financial statements.
e) Releasing of the managers.
f) Determining the method on using the profit, the amount of profit to be distributed and the rate for income shares.
g) Determining the salaries of the managers.
h) Electing the managers whose office term has expired; if the office term is not set out in the articles of association, determining the office term.
i) Electing the auditor, if the company is subject to audit.
j) Other matters considered as necessary, provided to define them clearly.
If it will be discussed during the ordinary general assembly meeting, then the items related to resolving on the amendments of articles of association for adaptation to the new Turkish Trade Law are included to the agenda.

6 – Which documents are made available in the general assembly meeting?
“Company’s articles of association; share ledger; attendants list; newspaper and other documents evidencing the announcement for the meeting; annual report prepared by the manager/board of directors; auditor report, if the company is subject to audit; financial statements; agenda; amendment draft, if there will be an amendment in the articles of association” are made available at the general assembly meeting venue.

7 – Is it required to have a Ministry commissioner at the general assembly meeting?
If the number of partners is more than twenty, then it is not required to have a Ministry commissioner at the general assembly meetings of the limited liability companies.

8 – Is it possible to attend to the general assembly through electronic means?
Yes, it is possible for the limited liability company partners to attend to the general assembly meeting and cast a vote through electronic means. In order to benefit from this possibility, however, the limited liability companies are required to provide the agreement provision related to attending the general assembly meeting and casting a vote through electronic means of the Communiqué Regarding the Electronic General Assembly Meetings in Trading Companies Other than Joint Stock Companies, issued and enacted by the Ministry of Customs and Trade, exactly in their articles of association.

9 – Is it possible to attend the general assembly meeting through a deputy?
It is a general rule for the limited liability companies that the company partner attends to the meeting in person. But the partner is also entitled to appoint a deputy - a partner of the company or not – for attending to the general assembly meetings. The deputy is appointed by a power of attorney.

10 – Is it possible to hold the general assembly meeting without invitation and announcement?
Yes, it is possible. But in order to allow the general assembly to take a resolution by holding a meeting with invitation, then none of the company partners should raise an objection for holding the meeting without invitation. We recommend this method for the companies with fewer partners (such as 2-3).

General Information on Annual report

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It is set out in articles 514 (joint stock companies) and 610 (limited liability companies) of Turkish Trade Law and became effective with the regulation dated 28.08.2012 and numbered 28395.

The annual report is prepared by the company’s management and submitted to the board of directors.

The annual report provides information about the company to the company partners and other stakeholders.

Section Name  and  Content

a) General information

•    Period covered by the report
•    Trade title
•    Trade registry number
•    Address
•    Phone
•    Website and e-mail
•    Organization structure of the company
•    capital and shareholding structures and the changes occurred related to these during the accounting period
•    Remarks related to privileged shares, if available, and voting rights of the shares
•    Information on the management body, executives and number of personnel of the company
•    Rights and benefits granted to the company partners and executives
•    if available; information on the activities of the members of management body of the company carried out for themselves or on behalf of others within the scope of the permission granted by the general assembly of the company and the activities within the scope of competition ban.

b) Financial rights granted to the management body members and executives

•    Sum of financial benefits such as attendance fee, salary, premium, bonus, dividend etc.
•    Information related to the sum of the allowances, travel, accommodation and representation expenses and real and cash opportunities, insurances and similar

c) Research and development works of the company

This section provides information on the research and development works carried out by the company and the results obtained from them.

d) Company activities and important progresses related to the activities

•    Information on the investments made during the relevant accounting period of the company
•    Information on the internal control system (2) and internal audit activities of the company and the opinions of the management body on this
•    Information on the direct or indirect affiliates and share rates of the company
•    Information on the own shares acquired by the company
•    Explanation on the private and public audits carried out during the accounting period
•    Information on the lawsuits filed against the company and which might impact the financial status and activities of the company and their possible results
•    Explanations related to the administrative and judicial sanctions imposed on the company and managers/board of directors due to practices contrary to the provisions of the legislation
•    Information and evaluations if the targets set for the previous periods are achieved, general assembly resolutions are performed, and if the targets are not achieved or resolutions are not performed, then information and evaluations on their grounds
•    If an extraordinary general assembly was held during the year; then information related to the extraordinary general assembly including the date of meeting, the resolutions taken during the meeting and the transactions carried out related to these
•    Information related to the donations and aids granted and the expenditures made within the scope of social responsibility projects by the company during the year
•    If it is a member of group of companies; then the legal transactions carried out by the parent company or any member of the parent company in favor of the company or affiliated company through the instructions of the parent company and all other measures taken or avoided to be taken in favor of the parent company or any member company during the last accounting period
•    If it is a member of group of companies; according to the situations and conditions known at the moment when the abovementioned legal transactions are carried out or measures are taken or avoided to be taken, whether a duly counter performance was provided in any of the legal transactions and whether the measure taken or avoided to be taken caused a loss of the company, and if the company has incurred a loss, whether this loss was offset.

e) Financial status (3)   

•    Analysis and evaluation of the management body related to the financial status and operating results, the realization degree of the planned activities and the status of the company against the strategic targets determined
•    The sales, efficiency, income making capacity, profitability and debt/equity ratio of the company compared with the previous years and information and future expectations related to the other matters that may provide idea about the operating results of the company
•    Determination and management body evaluations on whether the capital of the company is uncovered or deep in debt
•    If available, measures considered to be taken for improving the financial structure of the company
•    Information on profit distribution policy and if profit distribution will not take place, then its ground and the proposal on how to use the undistributed profit

f) Risks and evaluation of the management body  (4)   

•    If available, information related to the risk management policy to be applied by the company against the anticipated risks
•    If established, information on the works and reports of the committee related to early detection and management of risk
•    Future risks related to sales, efficiency, income making capacity, profitability, debt/equity ratio and similar

g) Other matters

•    Explanations related to the incidents with special importance which arise after the end of the operating year and which might impact the rights of the shareholders, creditors and other relevant individuals and companies
•    This section may also include additional information considered as appropriate by the management body, provided to not be on the contrary to the provisions of this Regulation.

The matters to be considered in the annual reports of the parent company, in case of a group of companies (5)

Pursuant to the regulation, the following matters must take place in addition to the other provisions in the annual reports of the parent company in a group of companies:
a)    The situation and relevant grounds if the shares representing five, ten, twenty, twenty five, thirty three, fifty, sixty seven and hundred percent shares of a capital company are owned, directly or indirectly, or the amount of shares fall under these percentages,
b)    Information on the shares in the parent company of the companies in the group,
c)    Explanations related to the internal audit and risk management systems of the group related to the process on preparing the consolidated financial statements,
d)    If requested by one member of the management body, then the conclusion part of the report foreseen in article 199 paragraph four of the Law.

Matters to be considered related to future estimations

If future information or estimations are provided in the annual report, then it is obligatory to provide the rationales and statistical information which these are based on. The future information and estimations provided in the annual report must comply with the financial status and operating results of the company.

Preservation of annual reports and preservation period

Pursuant to article 82 of the Turkish Trade Law, each merchant is obliged to preserve the annual reports.The preservation period is 10 years. This period starts with the issuance date of the report.