“Implementation Period of Provisional Article 1 of 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 Liability Companies and Limited Partnerships with Shares that half of the total capital and legal reserves are uncovered due to losses, the board of directors shall immediately call the general assembly for a meeting and present to this general assembly the remedial measures it deems appropriate.
If, according to the last annual balance sheet, it is understood that two-thirds of the total capital and legal reserves are uncovered due to losses, the company will automatically terminate unless the general assembly, which is called for an immediate meeting, decides to be content with one-third of the capital or to complete the capital.
The Communiqué on the Procedures and Principles Regarding the Implementation of Article 376 of the Turkish Commercial Code, published in the Official Gazette dated 15.09.2018 and numbered 30536, sets forth the relevant regulations.
In the calculations made in the provisional article 1 of the aforementioned Communiqué regarding capital loss or insolvency until 31.12.2023, half of the total of all foreign exchange losses arising from foreign currency denominated liabilities that have not yet been fulfilled and half of the total of lease expenses, depreciation and personnel expenses accrued in 2020 and 2021 may not be taken into account was ruled.
Temporary Article 1 of the Communiqué on Procedures and Principles Regarding the Implementation of Article 376 of the Turkish Commercial Code No. 6102 has been extended from 01.01.2024 to 01.01.2025 with the Communiqué published in the Official Gazette dated 31.10.2023 and numbered 32355.
The relevant Communiqué is available here.
Sincerely,
BİLGENER
