ABSTRACT
In this Article, the arrangements regarding the borrowing relations between the shareholders and the joint stock company which are subject to different regulations in the Turkish Commercial Code numbered 6102 and the old Turkish Commercial Code numbered 6762 will be examined comparatively and the reflections of the examined differences regarding the present application will be evaluated.
I. INTRODUCTION
In this article the evaluation regarding the borrowing relations between joint stock companies will be done and shareholders, first of all shareholders’ obligation/debt before the Company will be evaluated and in this context firstly information about principle of capital maintenance, later information about the single debt principle and its exceptions will be given.
Afterwards, the information regarding the shareholders’ prohibition of borrowing from company considering the new and old legislations will be given. In this regard information regarding the capital element, single debt principle, principle of maintenance capital will be given, later the cases in which shareholders loan the company will be evaluated within the framework of the Turkish Commercial Code (“TCC”). In this context, investing the receivables as capital will be explained and the relation between the company and shareholder will be evaluated in this manner.
II. PRINCIPLE OF MAINTENANCE CAPITAL
Principles that shall be examined within the scope of the shareholders’ prohibition of borrowing firstly the principle of maintenance capital shall be examined/ handled. Joint stock companies are determined as the equity companies under the TCC. In this regard, as one of the essential elements of the company, the capital, shall be committed and this commitment shall be fulfilled. Therefore, shareholders who paid their committed shares of capital and/or members of the board of directors who are not shareholders and/or their relatives is aimed to prevent the damage which may occur by borrowing from the company.
In order to ensure the continuity of the main activity subjects in joint-stock companies, the capital shall be protected. In this regard, shareholders’ borrowings from the company under the law may be partially prohibited subject to certain conditions is a practice in line with the abovementioned principle.
III. SINGLE DEBT PRINCIPLE AND ITS EXCEPTIONS
As it is stated explicitly under the Article 329 of the TCC with numbered 6102, the joint stock companies are the company which has determined capital and is divided into shares, which is solely responsible for its assets due to its debts. The shareholders’ debts to the company are regulated under the second paragraph of the same Article 329. Letter of the mentioned article explicitly states that the shareholders are only obligated with the capital shares they committed. This regulation under the law is named as “single debt principle”. Single debt principle, means that shareholder is solely obligated with the payment of the committed capital share. Therefore, as a rule, it is not possible to burden the shareholder with another obligation against the statement of the law1.
The shareholders were not allowed to reclaim what they gave to the company as capital, provided that the rights to the liquidation shares were reserved Article 480/3 of the TCC. In this context, the legislator has emphasized the shareholder’s obligation that the payment of the shared that was committed, and made clear that the return of the capital given to the company cannot be requested under the above-mentioned principle of maintenance capital.
IV. SHAREHOLDERS’ PROHIBITION OF BORROWING
Another issue that should be examined within the context of borrowing relationships between shareholders and the company, is the shareholders’ prohibition of borrowing in joint stock companies. Under the TCC numbered 6102, shareholders are not allowed to borrow from the company, except for certain conditions, different from the old TCC numbered 67622. It is a wellknown practice in a joint stock company where the company’s account is used for personal expenses, and it is even known that the money is being withdrawn from the company like a bank. It is understood that the main purpose of the legislator while bringing up this regulation is to prevent the use of capital which is one of the essential elements of the companies, that are clearly stated as the equity company under the law, by their shareholders for personal purposes. In addition to shareholders, it appears that non-shareholding board members and their close relatives are also subject to the same prohibition under different conditions and exceptions3.
Situated practice in Turkey, especially in family businesses, a general tendency was observed at the point of use of the company’s capital4. When assessed in this context, the legislator specifically arranged this when preparing the new legislative act, since the use of corporate capital for personal interests must be avoided so that the company can continue to fulfill its activity. In the first prepared draft, the legislator has made it very difficult for shareholders to owe the company by regulating: “Except the debt arising from the subscription, the shareholders cannot borrow from the company. Unless the debt is accrued from a transaction made by the shareholder regarding the scope of the business of the company and is subject to same or similar conditions with the precedents, with the company.” However, due to the everyday practices of the commercial life and the usual tendencies, the entry into force of this article was hindered by the lobbying activities and the article was amended by Law numbered 6535 without entering into force. As a result of the lobbying activities, the amended article has entered into force as follows:
“Shareholders can not owe to the company unless they fulfill their outstanding obligations arising from capital commitments and the company’s free reserves together with the interest are not at a level to cover losses of the previous year.”
With this amendment the legislator preferred not to prohibit the borrowing however bind it to a specific conditions. Pursuant to the Article of Law, if a shareholder has a debt regarding the capital commitment - it shall be paid by the shareholder- and if the company does not make profit, it is not possible for the shareholder to borrow from the company. As it is clearly stated that, pursuant to the principle of maintenance capital it is possible for the shareholder to borrow from the company with the exception that if the company is in financial crisis.
As it is seen, in the first text, the borrowing issue is regulated in a very narrow scope, with relevant law amendment, vast opportunity is provided to the shareholders for borrowing from the company. Although the regulations that are explained above the relevant provisions of the TCC are amended because of the fact that the shareholders could not keep up with the first text regarding their accustomed practices and with the fulfillment of certain conditions it gave the opportunity to the shareholders for borrowing. Even though the amended provision seems to regulating the prohibition it can be claimed that the rule is borrowing and the exception is not to borrow5.
V. COMPANY OWE TO THE SHAREHOLDERS AND RECEIVABLES TO BE SUBJECT TO THE CAPITAL INCREASE
As it is known the capital of the Company may be provided by the shareholders as cash and/or in kind. Before the company, it does not seem like a problem to borrow from the shareholders. In the practice, in some capital increase cases, the company’s borrowings amount may be subjected to the capital increase and necessary procedure shall be completed in this regard6.
While the previous law was into the force, without need further procedural transaction, receivables of the shareholder was added to the capital, with the amended regulation, a set of transactions set forth to be completed under the related provisions of the TCC.
From this point, in the practice, Article 127 of the TCC it is possible to invest the receivables as capital to a company. In this regard, the borrowings of the company that was received from its own shareholders, will be the shareholders’ receivables, it is possible to invest the receivables as capital to a company. However the accustomed practice which is adding the borrowings that is given by the shareholder to the company as the capital (internal debt) continued until the publishing of the Circular dated July 15, 2013 and numbered 67300147.431.04/ 559478/4979 – 5665 of the Ministry of Customs and Trade General Directorate of Internal Trade, in the Circular it is regulated as follows:
“Article 127 of the Turkish Commercial Code numbered 6102, the receivables may be invested as the capital in the companies and the first paragraph of the Article 342 of the Law is reserved. In the first paragraph of the Article 342 of the Law it is regulated that the undue receivables shall not be capital. Hereunder, Article 127 of the Law addition of the receivables to the capital is possible, in this case from the point of the Article 342 of the Law, relevant shares shall be evaluated as a kind of an asset and pursuant to the Article 343 these shall be assessed.”
Because of the vagueness of the “receivables” wording in the mentioned Circular, even in cash receivables it is conditioned to be assessed by an expert. Thus, in the situations where the transfer of the receivables is the issue the process is getting longer, even though there is no need for an expert opinion the expenses arising from the courts and experts were covered. In practice, upon the request of the shareholders, the civil registries actions were otherwise, therefore with the publication of the Circular dated September 29, 2013 and dated 7329 the General Directorate of Internal Trade the practices that are mentioned above are included in the legislation. Pursuant to Circular:
“In the case of the receivable of the shareholder from the company were subject to the capital increase, in the assessment of the receivable, pursuant to Article 343 of the Law it may be submitted the expert’s report that was appointed by the basic commercial court where the company is located, it is also evaluated that the submitting of a certified public accountant’s report or an independent accountant and financial advisor report or inspection report of the inspector of a company that is subject to inspection regarding these assessments may be submitted.”
As it is seen, it is now possible to obtain a certified public accountant report instead of an expert examination for the cash borrowings that the shareholder gave to the company.
VI. CONCLUSION
As it is explained above, one of the main elements of the equity companies which is determined as the capital under the legislation, solely obligation of the shareholders to the joint stock company is to pay the committed capital.
This obligation of the shareholder to the company, under the first draft of the TCC that was enacted in 2012, it is prohibited the shareholders borrowing from the company to prevent the obligation from weakening that is mentioned. However, since the opposite situation is accepted in ongoing practice it is accepted as an obstacle for the commercial life and a public opinion occurred for rearrangement.
As a result, with the Law numbered 6335 the text of the provision was amended, with the subsequent change the abovementioned prohibition is weaken with some additional conditions, and the opportunity to borrow from the company by the shareholder is provided again.
Due to the fact that, as it is explained above and as it is understood from the statement of the article’s text, before the borrowing was exception and the rule was not borrowing, with the amended text not borrowing is the exception and the indebtness is subject to certain conditions.
Addition to this, advance to shareholder by company is not prohibited acting as it is not harmful to the capital element. Even it is possible to subject the shareholders’ receivables from the company the capital increase with the fulfilment of the conditions under the Circular that was published by the Ministry of Customs and Trade as it is mentioned above.
BIBLIOGRAPHY
BAHTİYAR, Mehmet, Şirketler Hukuku Temel Esaslar, İstanbul 2001.
ÇALAL, Salih, 6102 Sayılı Yeni Türk Ticaret Kanunu’nda Borçlanma Yasağına İlişkin Düzenlemeler, Yaklaşım Hukuk, January 2013, Issue: 241.
NAZALI, Ersin, Ortaklara Borçlar Hesabının Sermayeye Dönüşmesinde Ne Değişti?, Vergi Dünyası, September 2013, Issue: 385.
PULAŞLI, Hasan, Şirketler Hukuku Şerhi, Adana 2009.
PULAŞLI, Hasan, Bağlı Nama Yazılı Pay Senetleri, Ankara 1992 (Anılış: Pay Senetleri).
SATICI TOPRAK, Özdem, Anonim Şirketlerde Şirkete Borçlanma Yasağı, Yaklaşım Hukuk, January 2014, Issue:253.
FOOTNOTE
1 Anonim Şirketlerde Tek Borç İlkesi ve İstisnaları, https://www.eris.av.tr/dosya/27c46ab676..pdfi, (Last Access: 09.01.2018).
2 Reason of the Article: “This provision is new and aims to prevent faulty and bad practice which is common in commercial life with the significant damages due to its expanded scope. Because with this provision it is aimed to prevent the shareholders borrowing from the company such as withdrawing from the company, using the company’s vault for many works and transactions including capital commitment and making personal expenses from the treasury of the company.”.
3 Özdem Satıcı Toprak, Anonim Şirketlerde Şirkete Borçlanma Yasağı, Yaklaşım Hukuk, Ocak 2014, Sayı:253.
4 See also 3rd footnote.
5 Salih Çalal, 6102 Sayılı Yeni Türk Ticaret Kanunu’nda Borçlanma Yasağına İlişkin Düzenlemeler, Yaklaşım Hukuk, January 2013, Numbered: 241.
6 Ersin Nazalı, Ortaklara Borçlar Hesabının Sermayeye Dönüşmesinde Ne Değişti?, VERGİ DÜNYASI, Numbered: 385, SEPTEMBER 2013.
