ABSTRACT
In principle, bearer certificate is not issued for partially paid shares in non-public joint stock companies. For registered share certificates, the shares are not obliged to be issued as certificate unless there is a minority shareholder demand. The status of transfer of shares and rights and obligations provided by the shares to the shareholders differs according to whether or not the share is tied up to a certificate. Firstly, the concept of share and then the concept of basic share is to be introduced briefly. The transfer of these shares, which are not tied up to a certificate, is to be explored under the current legal regulation and literature. Transfer methods differences is to be analyzed on the ground that the price of the basic share has been paid or not.
I. INTRODUCTION
As a high proportion of the world exchanges are structured as joint stock companies, joint stock companies are one of the essential elements for almost all countries where capitalist economic systems are dominant and effective1. Article 329 of the Turkish Commercial Code No. 6102 (“TCC”), describes joint stock companies as: “(1) A joint stock company is a company whose capital is certain and divided into shares and which is solely responsible for its debts as an amount of its assets2. Shareholders are solely responsible to the company and their responsibility is limited to their subscribed shares.” In accordance with the article, it may be analyzed that two important elements of joint stock company capital are ‘being divided into shares’ and ‘being specific’.
Capital is essential in joint stock companies. In principle, it is sufficient to commit the capital to become a shareholder and transferring the title of a shareholder to a third person is also simple3. It is a legal obligation to have a share in order to be a shareholder in joint stock companies, therefore the concept of ‘share’ has an important role in these companies4. Thus the concept of transfer of shares is highly crucial in such companies. This study shall introduce the concept of share firstly, then the connection between capital and share. The issues of transfer of such shares shall be analyzed under the transfer of basic shares.
II.THE CONCEPT OF SHARE
A share forms the basis of the law of jointstock companies as a technical concept. It is also the source of many features and principles, unique to joint-stock companies. Article 329 of the TCC provides a framework for the concept of share in joint stock companies5. As per Article 329 of the TCC, capital of joint stock companies is divided into shares and the responsibility of the shareholders towards the company is limited to capital price of which they undertake to pay. The fact that the TCC has used the term ‘share’ in the definition of joint stock companies underlines the importance of share in such companies. the concept of share to clarify is so worth noting firstly.
Pursuant to Article 486/1 of the TCC, share is formed in two ways: the registration of (i) the articles of association signed during establishment of the joint stock company and the establishment of the joint stock company, or the capital increased during the capital increase process of the joint stock company to the trade registry6. The shareholder has various financial and administrative rights related to the share owned by the shareholder7.
The concept of share is clarified under literature since no clear definition is provided by the law8. Among all the share definitions made by doctrine, according to the share definition which is best suited to our subject, the share represents the rights and obligations generated by share ownership. In this sense, share is the basis of the rights and obligations it has brought with its birth9. This explanation of share is preferred under this article due to the fact that the basic share transfer, main subject matter of that work is related to the transfer of the rights and obligations to the third party arising from the share itself.
A. Transfer of Share
One of the most important characteristics of joint stock companies is that their shares are transferable without constraint as a general principle. Transferability of share enables shareholders to transfer the shares without needing another person’s permission.
As per Article 484 of the TCC, “share certificates shall be bearer or registered.” It is important to note that bearer shares cannot be issued when the price for share is paid in partial10. Pursuant to the Article 486 paragraph 3 of the TCC, it is the legal obligation to attach the share to registered shares in cases that there is a minority demand in the non-public joint stock companies. In TCC context, the legislator does not impose an obligation to bind the shares of non-public joint-stock companies to registered share certificate for the shares that share price are not fully paid11. In order to gain the title of a shareholder in joint stock companies, it is not necessary to issue shares / certifi cates before the payment of share price. As explained above, in non-public joint stock companies, the share is not obliged to be attached to share certificates in the form of legal instruments before payment of share price. However, upon the request of the shareholders, shares may be issued as different types of share certificates in order to represent shareholding12.
The rights of the shareholder or the shareowner do not pose changes according to the share is bound to an instrument. The fact that the share is attached to an instrument only simplify the transfer/circulation of the share. The basic shares which are not tied up to an instrument is transferred with a different process than the shares which are tied up to an instrument.
III. THE CONCEPT AND TRANSFER OF BASIC SHARE
A. Basic Share
The share is issued by the establishment of the company or a capital increase in the future. This type is called ‘basic13 which is not tied up to a bill such as equity or certificates at the moment that is born14. The Court of Cassation indicates in the line with that approach15. As mentioned above, the shares in joint stock companies may remain in the form16 of not being tied up to an instrument since the law does not pose such requirement before the payment of the share price are completed.
Pursuant to Article 484 of the TCC, bearer shares or registered shares may remain basic without being attached to the instruments, and these basic shares shall be treated as any shares attached to the instruments17.
These shares that are not tied up to an instrument are divided into two as basic registered shares and basic bearer shares18. According to Poroy, Tekinalp and Çamoğlu: “(t)he basic share may be the subject of all kinds of transactions such as share certificates; may be transferred or pledged, usufruct rights may be granted, or seized and may be subject to rights of preemption, redemption or repurchase19. In this respect, the shares tied to a certificate and the shares that are not tied to a certificate do not pose any differences in terms of the rights, obligations and transactions20. The shares are subject to different transfer methods depending on bearer or registered shares. Basic shares cannot be transferred like the shares that are tied up to a certificate, a different transaction method is envisaged for their transfer. The fact that the share has remained basic, that is not attached to the share certificate, does not prevent the transfer of the share21. According to Sevi: “(t) he TCC does not impose a rule for the transfer of basic shares and therefore the transfer of the basic share will be made according to the general provisions22”. In accordance with the doctrine, according to the Court of Cassation rules that basic share may transfer in Turkish law23. The Court of Cassation, stated that “if the stock (share) of the joint stock company has not been issued as certificate, this share of the debtor is called as basic share and may be transferred to the others by the debtor or pledged and may be confiscated by the creditors of the debtor24.” As it is clearly stated, basic shares can be subject to share transfer transactions.
1. Share Transfer of Fully Paid Basic Share
According to the most scholars, fully paid basic shares are subject to transfer transactions in accordance with the provisions of the transfer of receivables in Turkish law as observed in some European countries such as Switzerland25. Correspondingly, the Court of Cassation also states that fully paid basic shares may be subject to transfer according to the provisions of the transfer of receivables26. Sevi points out that “as the matter of fact the fully paid share, aside from the subsidiary liabilities, does not include any financial liabilities for the shareholder, therefore, the transfer of the shares due to the rights it has bare such as right to claim, the transfer of these shares shall be made in accordance with the assignment of the receivables regulated in the provisions of TCO Article 183 ff.”27 The shareholder’s obligation to pay the share price has been completed in fully paid shares. The shareholder has no debt to the company and the shareholder may have claim from the company. For this reason, the literature and thus the Court of Cassation apply the provisions of the transfer of receivables in case of the fully paid bare shares mutatis mutandis28.
The transfer of the receivables, regulated under the Article 183 ff. of the Turkish Code of Obligations (“TCO”) points out that “(u)nless the law, contract or the nature of the work obstruct, the creditor may transfer his / her receivables to a third party without seeking the consent of the debtor.” In principle, the creditor can freely transfer his / her receivables to a third party without the consent of the debtor. The fully paid basic shares shall be transferred to a third party by the shareholder without the approval of the company pursuant to the TCO. In addition, the transfer of the receivable pursuant to Article 184 of the TCC is subject to the written procedure and moreover it shall be recorded in the book of shares in accordance with Article 499/1 of the TCC since the transferred share is a basic share29. At this point, it should be noted that the partnership may refrain from register the share transfer to the book of shares, provided that the articles of association contain provisions in accordance with Article 490 of the TCC. It should be stated that the shareholder agreement may contain transfer restrictions regarding shares and in such case, the decision of the board of directors will be required for registration in the book of shares As a result, if a share transfer restriction is not banned under the shareholder agreement, fully paid shares may be transferred without the permission of a third party or the debtor in accordance with the provisions of the transfer of the receivables in TCO.
2. Share Transfer of Basic Shares Which Are Partialy Paid
The transfer of the shares tied up to a bill is different from the transfer of the shares which are not tied up to a bill. In the vein, the transfer of the fully paid basic shares is different from the transfer of the not fully paid or partially paid basic shares. this subject matter has not been regulated under the law. Poroy, Tekinalp and Çamoğlu indicate that“transfer of the unpaid or partially paid basic share, contains the instrument of taking over the debt of the transferee, namely internal undertaking of the debt under the article 195 of TCO30.” According to Acar, “ (…) in cases where the share of the partnership has not been tied up to an instrument, a double distinction shall be made in terms of basic shares in order to determine when the share of the partnership has been earned and the transfer of the receivable in respect of fully paid shares provisions; In terms of unpaid shares, the provisions of the assignment of the receivable-debt shall be applied together31.” The most scholars indicate that the transfer of the unpaid shares fully or partially paid have the characteristics of internal undertaking of the debt. Because the share transfer agreement concluded by the shareholder and a third party is in fact an internal undertaking of dept agreement as the shareholder has not yet paid the entire share price of the capital to the joint stock company. As stated above, fully paid basic shareholders do not have any debts to the company, but the same cannot be claimed for unpaid basic shares so “ the unpaid share includes the obligation to pay the promised share price in the nature of the asset for the shareholder”32. In this case, the person who takes over the unpaid share also undertakes the capital payment debt of the previous shareholder.
Pursuant to Article 195 of the TCO, four similar, but essentially different institutions are regulated under the name of undertaking legislative debt.. The internal undertaking of the debt is important to state33. As per Article 195 of the TCO, “(t)he person who makes an internal undertaking agreement with the debtor is obliged to recover the debtor from the debt by performing the debt himself or by undertaking the debt with the consent of the creditor.” Oğuzman and Öz, as prominent scholars, states that “the internal undertaking of debt agreement is a contract between the debtor and the third party, which includes the third party’s commitment to release the debtor from the debt. With this agreement, the third party (T) undertakes to free the debtor (D) from the debt34.” The person who takes over the debt with the consent of the creditor assumes the obligation to fulfill the debt itself under the TCO regime. As stated above, the internal undertaking of the debt applies mutatis mutandis the total or partial unpaid share transfers. The debt born by the third party is the shareholder’s debt to pay the capital share. The reason for this is that the shareholder’s share provision constitutes a right of receivable for the partnership35. In this case, the share transfer agreement to be concluded between the shareholder and the third party shall be concluded the transfer of unpaid shares that have not been fully paid as the agreement to be concluded have the characteristics of internal undertaking of debt under the pursuant to article 195 of the TCO. The form requirement of the contract of undertaking internal debt (contrary to the contract of transfer of receivables) has not been regulated under the TCC. According to Sevi, “for this reason, it may be considered that, in accordance with the principle of freedom of form prevailing in our law, the parties are free to conclude the transfer contract in an oral, written or official manner without being bound to any particular form (TCO art. 12/1)36. ” It should be noted that the creditors’ permission is required to enforce the internal undertaking of debt agreement under the article 195 of the TCO. Therefore, the basic share transfer of shares which are not fully paid or partially paid should be approved by the company. To be brief, the share transfer agreement made concerning the basic shares which are not fully paid or partially paid by the shareholders is in fact the internal undertaking of debt contract regulated under the TCO and the creditor’s permission is required for this transaction. Likewise, regarding the legal limitations of the transfer of shares, the transfer of basic registered shares can only be actualized with the approval of the company unless the transfer takes place through the inheritance, the sharing of the inheritance, the provisions of the property regime between the spouses or the compulsory execution under the article 491 of the TCC. The scope of such approval is valid only if the credit proficiency of the transferee is doubtful and the requested assurance are not given by the transferee and the company may refuse to grant the approval.
IV. CONCLUSION
The transfer of shares in joint stock companies may be restricted under the Turkish TCC. While the transfer of tied up bonds takes place in accordance with the provisions of the TCC, the transfer of basic shares which is not explicitly regulated under the TCC takes place in accordance with the provisions of the TCO. The transfer of the basic shares varies depending on whether the price of the basic share has been paid or not. In the case of fully paid basic shares, the regulations for transfer of the receivables shall be applied in the transfer of these shares since the shareholder has no debts to the company. The internal undertaking of debt provisions shall be applied in the basic share transfers, which is fully or not fully paid. The shareholder’s capital debt to the company has not been fulfilled by the shareholder.
BIBLIOGRAPHY
ALTAŞ, SONER. Şirketler Hukukuna İlişkin Yüksek Yargı Kararları – Anonim Şirketler – Limited Şirketler, ( Ankara: Seçkin Yayıncılık, 2018).
AYHAN, RIZA / ÇAĞLAR, HAYRETTİN / ÖZDAMAR, MEHMET. Şirketler Hukuku Genel Esaslar, (Ankara: Yetkin Yayınları, 2019).
BAHTİYAR, MEHMET. Ortaklıklar Hukuku, (İstanbul: Beta Yayıncılık, 2019)
BESEN, MURAT. Anonim Ortaklıklarda İmtiyazlı Paylar, (İstanbul: Onikilevha Yayıncılık, 2018)
BOZKURT, TAMER. Şirketler Hukuku, (Ankara: Legem Yayıncılık 2019).
CİVELEK YAŞAR, ESRA. Yasal Mal Rejiminin Tasfiyesinde Sermaye Ortaklıkları Payı, (İstanbul: Aristo Yayıncılık, 2019).
KIR, OKAY. Anonim Şirketler, ( İstanbul: Aristo Yayınevi, 2019).
OĞUZMAN, KEMAL / ÖZ, TURGUT. Borçlar Hukuku Genel Hükümleri, (İstanbul: Vedat Kitapçılık 2016).
POROY, REHA / TEKİNALP, ÜNAL / ÇAMOĞLU, ERSİN. Ortaklıklar Hukuku (İstanbul: Vedat Kitapçılık, 2019).
POROY, REHA / TEKİNALP, ÜNAL / ÇAMOĞLU, ERSİN. Ortaklıklar ve Kooperatif Hukuku, (İstanbul: Vedat Kitapçılık, 2010). PULAŞLI, HASAN. Şirketler Hukuku Genel Esaslar, (Ankara: Adalet Yayınevi, 2017). SEVİ, ALİ MURAT. Anonim Ortaklıkta Payın Devri, (Ankara: Seçkin Hukuk, 2018).
ŞENER, ORUÇ HAMİ. Teorik ve Uygulamalı Ortaklıklar Hukuku, (Ankara: Seçkin Yayıncılık, 2019).
ŞENER, ORUÇ HAMİ. Yeni TTK Döneminde Anonim ve Limited Ortaklıklara İlişkin Verilen Yargıtay Emsal Kararlarının Değerlendirilmesi, (Ankara: Seçkin Yayıncılık, 2019).
TANÖR, REHA. Türk Sermaye Piyasası, (İstanbul: Beta Yayıncılık, 2000). Court of Cassation’s Decisions Court of Cassation 11. C.C., dated 07.03.1994 numbered E. 4752, K.1775. Court of Cassation 11. C.C., dated. 03.11.2014, numbered E. 2014/6567, K, 2014/16638. Court of Cassation 12. C.C., dated .29.06.2015, numbered E. 2015/7283, K. 2015/18263. Court of Cassation 17. C.C., dated 15.10.2015, numbered E.2015/9767, K.2015/10637.
FOOTNOTE
1 Mehmet BAHTİYAR, Ortaklıklar Hukuku, (İstanbul: Beta Yayıncılık, 2019), p. 107.
2 14.02.2011 dated,27846 numbered Official Gazette (OG).
3 Tamer BOZKURT, Şirketler Hukuku, (Ankara: Legem Yayıncılık, 2019), p. 185.
4 BOZKURT, p. 183
5 Ali Murat SEVİ, Anonim Ortaklıkta Payın Devri, (Ankara: Seçkin Yayıncılık, 2018), p. 29.
6 Çağatay Serdar ŞAHİN, “Ticaret Şirketlerinde Ortakların Kişisel Alacaklılarının Şirkete Yöneltebilecekleri Haciz Talepleri”, Selçuk Üniversitesi Hukuk Fakültesi Dergisi, Volume: 27 No: 1, 2019, p. 167.
7 BOZKURT, p.391.
8 See Rıza AYHAN/Hayrettin ÇAĞLAR/Mehmet ÖZDAMAR, Şirketler Hukuku Genel Esaslar, (Ankara: Yetkin Yayıncılık, 2019); Murat BESEN, Anonim Ortaklıklarda İmtiyazlı Paylar, (İstanbul: On İki Levha Yayıncılık, 2018); Tamer BOZKURT, Şirketler Hukuku, (Ankara: Legem Yayıncılık, 2018).
9 Hasan PULAŞLI, Şirketler Hukuku Genel Esaslar, (Ankara: Adalet Yayınevi, 2016), p. 535.
10 See TTK Article 484/2.
11 See TTK Article 426 and 499.
12 BESEN, p. 11.
13 BOZKURT, p. 395.
14 Oruç Hami ŞENER, Teorik ve Uygulamalı Ortaklıklar Hukuku, (Ortaklıklar Hukuku) (Ankara: Seçkin Yayıncılık, 2019), p. 615.
15 Court of Cassation 17.C.C., dated 15.10.2015, numbered E.2015/9767, K.2015/10637.
16 Soner ALTAŞ, Şirketler Hukukuna İlişkin Yüksek Yargı Kararları – Anonim Şirketler – Limited Şirketler, (Ankara: Seçkin Yayıncılık, 2018), p. 386.
17 AYHAN/ ÇAĞLAR/ ÖZDAMAR, p. 410.
18 Oruç Hami ŞENER, Yeni TTK Döneminde Anonim ve Limited Ortaklıklara İlişkin Verilen Yargıtay Emsal Kararlarının Değerlendirilmesi, (Ankara: Seçkin Yayıncılık, 2019), p. 88.
19 Reha POROY, Ünal Tekinalp, Ersin Çamoğlu, Ortaklıklar Hukuku I, (İstanbul: Vedat Kitapçılık, 2019), p. 618.
20 Reha TANÖR, Türk Sermaye Piyasası, C. II, Halka Arz, (İstanbul: Beta Yayıncılık, 2000), p. 84.
21 ŞENER, Ortaklıklar Hukuku, p. 615.
22 SEVİ, p. 343.
23 Court of Cassation 11. C.C., dated 07.03.1994 numbered E. 4752, K.1775.
24 Court of Cassation 12. C.C., dated .29.06.2015, numbered E. 2015/7283, K. 2015/18263
25 POROY/TEKİNALP/ÇAMOĞLU, s. 618. See Talih UYAR, “Anonim ve Limited Şirketlerde; Şirketten ve/ veya Şirket Ortağı’ndan Alacaklı Olan Üçüncü Kişilerin Şirket’i ve/veya Şirket Ortağı’nı Takip Hakkının Kapsamı”, İstanbul Barosu Dergisi, Volume: 89, No: 2015, p.68; ŞENER, Ortaklıklar Hukuku p.615
26 Court of Cassation 11. C.C., dated. 03.11.2014, numbered E. 2014/6567, K, 2014/16638.
27 SEVİ, p. 344.
28 04.02.2011 dated, 27836 numbered Official Gazette (OG).
29 POROY/TEKİNALP/ÇAMOĞLU, p. 619.
30 POROY/TEKİNALP/ÇAMOĞLU, p. 619.
31 Esra CİVELEK YAŞAR, Yasal Mal Rejiminin Tasfiyesinde Sermaye Ortaklıkları Payı, (İstanbul: Aristo Yayıncılık, 2019), p. 98.
32 SEVİ, p. 344.
33 Kemal OĞUZMAN/Turgut ÖZ, Borçlar Hukuku Genel Hükümleri C II, (İstanbul: Vedat Kitapçılık, 2016), p. 597
34 OĞUZMAN/ÖZ, p. 598.
35 SEVİ, p. 344.
36 SEVİ, p. 345.
