09.11.2022/71
Extension of the Application Period for Article Temporary 1 of the Communiqué on Procedures and Principles to Be Followed in the Event of Capital Loss or Insolvency
According to Article 376 of the Turkish Commercial Code No. 6102, if it is determined that half of the total capital and legal reserves is lost due to a loss in the most recent annual balance sheet of joint-stock and limited companies, as well as partnerships with shares, the board of directors shall immediately call a general assembly and present corrective measures to the general assembly. If it is determined that two-thirds of the total capital and legal reserves is lost due to a loss, the convened general assembly must decide whether to proceed with one-third of the capital or complete the capital. If no such decision is made, the company will automatically be dissolved.
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 15.09.2018.
In the temporary Article 1 of the aforementioned Communiqué, it was stipulated that until 31.12.2023, when calculating capital loss or insolvency, the entire foreign exchange loss from unfulfilled foreign currency liabilities, as well as half of the expenses, depreciation, and personnel expenses arising from leases accrued in the years 2020 and 2021, could be excluded from the calculation.
With the amendment to the Communiqué on the Implementation of Article 376 of the Turkish Commercial Code, published in the Official Gazette No. 32007 on 08.11.2022, the application period of Temporary Article 1 has been extended from 31.12.2023 to 31.12.2024.
You can access the relevant General Communiqué here.
Best regards,
BİLGENER
