Shareholders Agreement
"Why is a shareholders agreement important for Turkish companies?"
Quick Answer
Shareholders agreements typically regulate voting arrangements, share transfer restrictions, governance and board matters, dividend policies, and exit mechanisms. Under Turkish law, they generally bind the parties contractually (not the company or third parties automatically) and are often enforced through contractual remedies such as damages or penalty clauses, while the articles of association remain the primary corporate document.
Key Aspects Under Turkish Law
Shareholders agreements are primarily governed by the Turkish Code of Obligations as contracts between shareholders, while the Turkish Commercial Code sets the mandatory corporate framework through the articles of association and company law rules.
Key Points to Remember
- The Turkish Commercial Code No. 6102 sets the corporate framework (articles of association and mandatory company law rules), while shareholders agreements operate as contracts between the shareholders under the Turkish Code of Obligations
- A shareholders agreement is generally not registered with the Trade Registry. To make certain arrangements effective at the corporate level, relevant provisions may need to be reflected in the articles of association and completed through the required corporate approvals and filings
- Foreign investors have equal rights with domestic entities
- Proper documentation and corporate formalities are essential
Practical Considerations for Businesses
When dealing with shareholders agreement in Turkey, businesses should consider engaging qualified legal counsel familiar with both Turkish law and international business practices. This ensures compliance with local requirements while meeting global standards.
Documentation requirements, timeline considerations, and regulatory approvals vary depending on the specific circumstances of each case. Early planning and proper structuring can help avoid common pitfalls.
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