Abstract :
There are no clear statements in the Turkish Commercial Code regarding defects of decisions of joint-stock company executive board of directors; that is whether it is possible to file any cases against these decisions and if so what the character of these cases should be. In the Turkish Commercial Code, there only exist some rules about taking compensation actions against regarding executive board members. (the Turkish Commercial Code: articles 336-341, 309, 346) The Turkish Commercial Code consists some general articles that regulate the absence and/or invalidity of the jointstock company executive board of directors; however there are no rules for executive board of directors’ decisions that may be parallel to Article 381 that provides an annulment for general board of directors’ decisions that are not in accordance with the articles of incorporation or with general norms of good will. Article 391 of the new Turkish Commercial Code provides regulations regarding the invalidity of joint-stock company executive board of directors and consequences thereof by setting some examples. Also recently amended Article 460 of the Turkish Commercial Code provides that the joint-stock companies that are not open to public, if the executive board of directors has been given the power to raise the capital to its maximum by initial or amended articles of incorporation; the executive board of directors may decide to raise the capital, may issue shares, and may restrict the righs of aqusition of new shares for shareholders. In case of theses decisions to be not in accordance with the Code, and/or with the articles of incorporation and/or with specifically norms of honesty, shareholders or members of the executive board of directors may bring actions for annullment within one month after the due process announcement of the decision . Invalidity of the executive board of directors’ decisions has been widely regulated by the new Turkish Commercial Code. However, invalidity should be a very exceptional sanction for the purposes of certainty and predictability of the law, since the consequences of such an invalidity decision happens to be considering all decisions of the executive board of directors to be void from the start and in retrospect.Thus these executive board of directors’ decisions have no effect neither for shareholders nor for creditors; and may be claimed to be invalid anytime without any statue of limitations. In my opinion, by the new Turkish Commercial Code it should only be provided that the executive board of directors’ decisions may be annulled in a certain time under certain limited conditions, and invalidity should not be a sanction at all. A new legislation parallel to the current Securities Exchange Act would be acceptable for all incorporated companies. And also, annullments of the decisions against the equality principle and/or the articles of incorporation, and/or not to be in accordance with the corporation’s basic structure, and/ or to be disinterested with the capital conservation principle, and/or to be derogative about the shareholders’ indispensible rights appears to be much more plausible and sustainable in terms of law.
NaturalLanguageKeyword :
Joint , Stock Company , Executive Board of Directors , Invalidity of joint , stock company executive board of directors decisions
