“Implementation Period of Provisional Article 1 of the Capital Loss / Insolvency Communiqué Extended.”
According to Article 376 of the Turkish Commercial Code No. 6102, if it is understood from the last annual balance sheet of joint-stock companies, limited companies, and partnerships with shares that half of the total capital and legal reserves are uncollectible due to losses, the board of directors must immediately convene a general meeting and present the corrective measures they deem appropriate to the general meeting. If it is understood that two-thirds of the total capital and legal reserves are uncollectible due to losses, the general meeting called immediately must decide whether to remain with one-third of the capital or to complete the capital. If no such decision is made, the company will automatically terminate.
Regulations regarding this matter have been made in the “Communiqué on the Implementation of Article 376 of the Turkish Commercial Code” published in the Official Gazette No. 30536 on September 15, 2018.
In the temporary Article 1 of the aforementioned Communiqué, it was stated that for calculations related to capital loss or insolvency until December 31, 2023, the entire foreign currency exchange losses from unfulfilled foreign currency liabilities, as well as half of the expenses, depreciation, and personnel costs accrued from leases in 2020 and 2021, may be excluded from the calculation.
With the Communiqué on the Amendment of the “Communiqué on the Implementation of Article 376 of the Turkish Commercial Code No. 6102” published in the Official Gazette No. 32007 on November 8, 2022, the deadline for the temporary Article 1 has been extended from December 31, 2023, to December 31, 2024.
You can access the relevant General Communiqué here.
Best regards,
BİLGENER
