Bearer Shares

1. Conceptual Nature of Bearer Shares

In Turkish corporate law, a share (pay) in a Joint-Stock Company (Anonim Şirket - A.Ş.) represents three dimensions: a fraction of the share capital, a bundle of shareholder rights and duties (the status of being a partner), and the physical security (pay senedi) representing these rights. Under Article 484 of the Turkish Commercial Code (TTK), a company's articles of association may authorize the issuance of either registered shares (nama yazılı pay) or bearer shares (hamiline yazılı pay).

Bearer shares represent the ultimate commercial instrument for swift transferability. The key characteristics include:

• Anonymity (Historically): Unlike registered shares, bearer shares do not record the owner's name. Historically, this allowed shareholders to remain entirely anonymous to the company, the state, and the public.
• Fungibility & Ease of Circulation: Being structured as bearer instruments, the rights are incorporated directly into the certificate. Whoever holds the certificate is legally presumed to be the rightful owner.
• Public vs. Closed Companies: Under the Capital Market Law (SerPK), public joint-stock companies in Turkey issue bearer shares only in dematerialized form (kaydi pay). Closed (private) joint-stock companies issue them as physical paper certificates, which are now strictly regulated.

2. Registered Shares (Nama) vs. Bearer Shares (Hamiline)

Understanding the distinctions between these two share types is crucial for corporate structuring and transaction design in Turkey:

Feature	Bearer Shares (Hamiline Yazılı)	Registered Shares (Nama Yazılı)
Transfer Mechanism	Delivery of physical possession (zilyetliğin devri) + Mandatory MKK (HPKS) Registration.	Endorsement (ciro) or written assignment + delivery + Share Ledger Registration.
Transfer Restrictions (Bağlam)	Cannot be restricted by the company's articles of association.	Can be restricted (e.g., subject to board approval) under TTK m. 492.
Anonymity	Modified by the 2021 Law: Anonymous to third parties, but registered with the state database (MKK).	No anonymity; shareholder details are recorded in the company's share ledger.
Prerequisite for Issuance	Strictly prohibited to issue until the nominal value is fully paid up.	Can be issued even if partially paid, subject to capital call rules.

3. Types of Bearer Shares

Turkish law distinguishes between different legal states of bearer shares:

1. Uncertificated (Naked) Bearer Shares (Senede Bağlanmamış / Çıplak Pay): Before the physical certificate is printed, the share exists as a corporate right. Legally, a shareholder cannot transfer a naked bearer share simply as a "bearer" right because there is no certificate. Its transfer is governed by the rules of assignment of claims (alacağın temliki) under the Code of Obligations (TBK).
2. Certificated Bearer Shares (Senede Bağlanmış Pay): The physical certificates represent the classic bearer instruments. The company is legally obligated to print and distribute these certificates within three months after the full payment of the share value (TTK 486/2).
3. Interim Certificates (İlmühaber): Temporary certificates issued to represent bearer shares before the final certificates are printed. Under Turkish practice, interim certificates for bearer shares are legally treated as registered instruments and follow the rules of registered shares.
4. Dematerialized Bearer Shares (Kaydi Pay): For public companies, physical printing is replaced by digital entries at the Central Securities Depository (MKK).

4. The 2021 MKK / HPKS Registration Reform

To comply with international standards on combating tax evasion and money laundering, Turkey enacted Law No. 7262 on Preventing Financing of Proliferation of Weapons of Mass Destruction (published in the Official Gazette on December 31, 2020, and effective as of April 1, 2021). This law abolished the absolute anonymity of bearer shares in closed joint-stock companies:

• Centralized Database: Companies must notify the MKK of the identity of bearer shareholders and their holdings prior to distributing the certificates.
• Mandatory Transfer Notification: When a bearer share is sold, the transferee (buyer) must notify and register the transfer in the MKK's Hamiline Pay Kayıt Sistemi (HPKS).
• Sanction for Non-Registration: If a transfer is not registered with the HPKS, the buyer cannot exercise any shareholder rights against the company. This includes the right to attend general assemblies, vote, receive dividends, or challenge corporate resolutions. The company will legally ignore any shareholder who presents a physical certificate if their ownership is not registered in the HPKS.

5. Possession Transfer Mechanisms (Tasarruf İşlemi)

For a valid transfer of physical bearer share certificates, Turkish property law requires the transfer of possession (zilyetliğin devri). This can take several forms:

• Physical Handover (Teslim): The physical delivery of the paper certificate from the seller to the buyer.
• Short-Hand Delivery (Traditio Brevi Manu / Kısa Elden Teslim): If the buyer already holds the certificate (e.g., as a pledgee or lessee), the parties simply agree that the buyer now holds it as the owner.
• Constitutum Possessorium (Hükmen Teslim): The seller transfers ownership but retains physical possession under a different legal relationship (e.g., keeping it safe as a custodian).
• Assignment of Possession (Zilyetliğin Havalesi): If a third party (like a bank or custodian) holds the certificate, the seller instructs the custodian to hold it for the buyer.

6. Restrictions on Transfer: Articles of Association vs. Shareholders' Agreement

While the TTK states that bearer shares cannot be restricted by the company's articles of association (unlike registered shares which can have bağlam restrictions), shareholders can still restrict transfers contractually:

• Shareholders' Agreement (SHA / Pay Sahipleri Sözleşmesi): Shareholders can enter into private contracts containing right of first refusal (önalım hakkı), right of first offer (öncelik hakkı), tag-along (satışa katılma hakkı), or drag-along (birlikte satmaya zorlama hakkı) clauses.
• Legal Status of SHA Restrictions: These contractual restrictions are governed by the law of obligations. They are not binding on the company as corporate law and do not affect the corporate validity of a share transfer. If a shareholder transfers bearer shares in violation of an SHA, the transfer is corporately valid, and the buyer becomes the shareholder (provided MKK registration is complete), but the seller is liable for breach of contract and contractual penalties (cezai şart).

7. Establishing Usufruct (İntifa Hakkı) on Bearer Shares

An owner of bearer shares can establish a usufruct right (intifa hakkı) allowing another person to benefit from the financial yields of the shares (such as dividends) and, unless agreed otherwise, exercise voting rights at general meetings.

• For Certificated Bearer Shares: Tesis requires a written agreement between the shareholder and the usufructuary, the physical transfer of the certificate's possession, and mandatory registration of the usufruct right in the MKK database (HPKS).
• For Naked Bearer Shares: Established by a written assignment of claims (alacağın temliki) and notification to the company.

8. Pledging Bearer Shares (Rehin)

Pledging bearer shares is a common commercial method to secure loans in Turkish B2B transactions. The establishment depends on the share state:

• Standard Pledge: Under the Turkish Civil Code (TMK), pledging a physical bearer certificate requires a written pledge agreement, the physical delivery of the certificate to the pledgee (the bank or creditor), and registration in the MKK (HPKS). The pledgee must retain possession; if the certificate is returned to the owner, the pledge is legally extinguished.
• Pledge under the Law on Movable Pledges (TİTRK No. 6750): The Law on Pledges in Movable Properties in Commercial Transactions allows a non-possessory pledge. However, academic doctrine and recent practices confirm that for physical bearer shares, physical delivery or registration in the HPKS registry remains the safest and most effective method to ensure priority over other creditors.