Protecting minority shareholders becomes crucial as joint stock firms multiply and become more significant in Turkey's business environment. For this reason, the rights of minority shareholders in Turkey are a broad field that needs to be carefully understood in Turkey's dynamic economy. Therefore, such rights encompass a spectrum of protections, creating a sustainable business environment and providing fairness. In this article, we will look at the rights of minority shareholders in Turkey in more detail.
What are The Rights of Minority Shareholders in Turkey?
The rights of minority shareholders in Turkey offer various important benefits that are required for their safety and participation in business operations. Minority shareholders need to be aware of these rights. For example, they can actively participate in corporate governance procedures and promote justice and transparency by being aware of the rights of minority shareholders in Turkey. Besides, minority shareholders can efficiently manage risks and make well-informed decisions when they know their rights. The legal rights of minority shareholders will be explained in more detail below.
Right to Convene the General Assembly to Meeting and Add Items to the Agenda
Minority shareholders have the authority to formally petition the board of directors for the calling of a general assembly meeting or for adding particular topics to the agenda of an already planned meeting. The agenda request and meeting call must be notarized, and this request, along with the required justifications, must be filed before the announcement fee payment for the meeting's publishing in the Turkish Trade Registry Gazette. A 45-day notice is required if the board grants the proposal; if not, the minority shareholders may call the meeting independently. If the board rejects the request or fails to respond, the rights of minority shareholders in Turkey include asking the commercial court to step in and force the meeting to be called.
Right to Vote and Influence Decisions
Even if minority shareholders possess a lesser percentage of the company than majority shareholders, this right gives them an active role in the strategic direction and governance of the organization. Also, minority shareholders with voting rights can influence important decisions made at general meetings, including the election of directors, the authorization of financial accounts, and adjustments to the articles of association of the business.
Right to Request Special Audits
Even if they are not on the agenda, any shareholder may ask the general assembly to conduct a special audit to clarify specific occurrences if it is required to exercise the rights of minority shareholders in Turkey and if the right to review or receive information has been utilized previously. The company or each shareholder may, within thirty days following the general assembly's approval, request the appointment of a special auditor from the commercial court of first instance where the company headquarters are located.
Right to Information and Inspection
The Turkish Commercial Code, which promotes corporate responsibility and transparency standards, states that shareholders have a basic right to obtain a wealth of firm information. At least fifteen days before the general assembly meeting, shareholders can physically inspect audit reports, particularly financial statements and activity reports. Shareholders may obtain copies of the balance sheet; the business will pay for these requests. In the rights of minority shareholders in Turkey, shareholders can ask the board of directors about business operations and the auditors about audits during general assemblies. If the assembly fails to provide sufficient answers, shareholders can review internal correspondence and commercial records after the meeting.
Right to File a Lawsuit for Dissolution of the Company by Just Causes
When a public company has shares representing one-tenth or one-twentieth of its capital, its owners may ask the commercial court of first instance at the location of the company's headquarters to make a dissolution decision if they have good cause. Instead of terminating the agreement, the court may give the plaintiff shareholders the full market value of their shares as of the date closest to the decision date, remove the plaintiff shareholders from the business, or choose another appropriate course of action that is suitable for the circumstances.
What are The Protections For Minority Shareholders?
Minority shareholders frequently struggle with having their voices drowned out by larger stakeholders in corporate governance. In addition, when joint stock companies embrace pluralistic management, it becomes even more important to protect minority shareholders' interests. Protective measures are in place within this complex structure to defend the rights of minority shareholders in Turkey. This also means ensuring openness, fairness, and involvement in business matters.
Turkish Commercial Code Nr. 6102 introduces a number of developments associated with minority rights, which are in line with modern legal frameworks. If minority shareholders, who have important rights, use these rights effectively, there will be a transparent and fair order within the company.
In case of infringement of minority shareholder rights, a Turkish commercial lawyer may help you solve the legal case. As a reputable Turkish lawyer firm, we can provide legal consultancy in this field. Our team of experienced and English-speaking lawyers in Turkey, who specialize in Turkish commercial law, can help you overcome the challenges by offering proactive legal solutions customized to your specific needs.
You can reach our previous article from https://istanbullawyerfirm.com/blog/regulatory-compliance-for-fintech-companies-in-turkey