Corporate Law

corporate law

Corporate Law

Merger and Acquisition

Commercial companies merge by way of joining their assets and managements. This can occur by way of an acquisition of a company’s assets by another company or a merger of the assets of two companies into a newly created company. In either way, terminated companies are not liquidated.

A) METHODS OF MERGERS

  1. ACQUISITION (TCC art.136/1a): The transferee company acquires as a whole the assets of the transferor company.  The transferor company’s legal entity ends and it is removed from the trade registry. The legal entity of the transferee company does not change, only its assets increase.
  2. INCORPORATION (TCC art.136/1b): Two or more companys bring their assets together and these assets are transferred as a whole into a newly incorporated company. Merging companies are terminated, but not liquidated. TCC art.137 governs which companies are allowed to merge. Capital companies are free to merge with one another.

B) MERGER AGREEMENT

For companies to merge, a merger agreement is prepared in writing (TCC art.145). This agreement is then signed by the managing bodies of the merging companies. A merger agreeent includes all the details and principles of the merger between the merging companies and it is promissory. This agreement must be approved by the general assemblies of all the merging companies (TCC artc.145); until such time the merger’s validity is pending.

C) CONTENT

The content of a merger agreement is listed in TCC art.146 in 9 clauses. The following is the minimum mandatory provisions:

  1. a) Merger by transfer: Commercial titles, legal types and headquarters of all the merging companies.
    b) Merger by incorporation: Commercial title, legal type and headquarters of the new company.
  2. The change in the share percentage of the shareholders and equalization rate are written, if any.
  3. Rights granted by the acquirer company to the owners of the privileged or non-privileged shares.
  4. How and when the shares are transferred.
  5. The date on which the shares acquired by the merger are entitled to the balance sheet profit of the acquiring or newly established company and all the features related to this request.
    When does the right of dividend of the shares given to the acquirer or the newly established company start? Any privilege, etc.
  6. If necessary, the separation of reserve in comply with 141.
  7. The date on which the transactions and actions of the transferred partnership are deemed to have been made to the account of the transferee.
  8. Special benefits granted to governing bodies and managing partners.
  9. Names of unlimited responsible partners as required.

 

During Join-stock Company

Establishment,responsibility for undertaking and procedures.

Those who make transactions on behalf of the partnership to be established before the registration of the partnership are personally and severally responsible for these transactions and commitments unless the transaction is approved by the board of directors of the partnership within three months following the registration of the partnership. If the minute book accepts, the partnership is responsible for the transactions. These transactions are renting shops, buying materials, making service contracts, etc. In order for the founders to ask for the expenses incurred during the establishment, they must be accepted by the minute book. Otherwise, these expenses remain on the founders. Liability arising from the organization can be abolished in 2 ways: 1) prescription 2) compromise or discharge. There can not be compromise or discharge at least 4 years from the date of registration; After 4 years, with the approval of the General Assembly of compromise or discharge. However, if one or more of the shareholders, each holding 10% share in the voting in the general assembly, casts negative votes, then compromise and discharge shall not take place again. Liability lawsuits may be filed a legal action against the founders whose liability has not been abolished. The statute of limitations is 2 years and in any case 5 years from the date on which the plaintiff learned the damage and the responsible person. However, if the action constitutes a crime, the statute of limitations prescribed in the TLC is reserved.

Antalya Lawyer and Antalya Attorney Barış Erkan Çelebi and his Antalya Law Firm provide joint-stock and limited liability companies with organizations in all provinces of Turkey, registration, restructuring, contract changes, capital changes, transfer of shares, the company offers legal advice and services in mergers and acquisitions transactions.

Acquisition Of Shares, Drafting Negotiating Shareholders Agreement

A shareholders agreement (SHA) is a contract signed by either current or future shareholders, determining the relations between a shareholder and the rest of the shareholders and/or and the company. By this agreement the parties determine their responsibilities for the realization of the company’s goals and also go under the obligation to cooperate with the other shareholders. Due to the reason that shareholders agreements form a partnership independent of the company in subject, the obligations arising thereof are subject to the Law of Obligations rather than Commercial Law. Companies are considered to be third parties in terms of performance and consequences of these contracts; enforcing the contract provisions against the company or its divisions and representatives is not possible. In case of breach of contract, the injured party is entitled to remedies as per Law of Obligations.

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