OBLIGATIONS REGARDING THE WEBSITES OF PUBLICLY HELD COMPANIES

I. INTRODUCTION

Since publicly held companies include companies operating in the capital markets and whose shares are traded on the stock exchange, they are subject to disclosure obligations in order to ensure investor confidence and market transparency. Within this framework, companies’ websites emerge as one of the primary tools for communication and information transfer. Websites both facilitate public access to information that is required to be published under the legislation and provide an effective platform for demonstrating companies’ compliance with corporate governance principles. Regulations such as the Turkish Commercial Code numbered 61021, (“TCC”) and the Capital Markets Law numbered 63622, (“CML”) require publicly held companies subject to independent audit to provide comprehensive and up-to-date disclosures on their websites, thereby contributing to investor information. Among the information and documents required to be disclosed on the website are financial statements, general assembly information documents, material event disclosures, internal directives, board of directors’ activity reports, and reports on compliance with corporate governance principles; these contents must be kept current on the website for a specified period. Accordingly, the regulatory obligations make systematic and detailed information sharing on digital platforms mandatory for companies.

II. LEGAL BASIS

The increasing digitalization, the acceleration of capital flows, and the expansion of the investor base have made it necessary for companies to make their obligations to inform shareholders and the public both visible and accessible. At this point, the websites of publicly held companies stand out as a tool both for public disclosure and for ensuring compliance with corporate governance standards. In the doctrine, public disclosure is a concept expressed as a set of principles that help protect the interests of shareholders and creditors, assist in the conscious exercise of rights, prevent the deception of investors in the capital markets, secure their participation in these markets, and support both internal and external audit3. It is also one of the fundamental principles adopted in Communiqué on Corporate Governance No. II-17.14 and constitutes the legal basis for companies’ obligations to ensure investor confidence and market transparency. In addition, this principle has been adopted as the fourth fundamental principle under the heading “Disclosure and Transparency” in the Corporate Governance Principles published by the Organisation for Economic Co-operation and Development5.

The provisions introduced by the legislator through regulations such as TCC and CML aim to provide shareholders, investors, creditors, and the public primarily with accurate and up-to-date information. In this context, the websites of publicly held companies are not merely promotional tools; they have become channels of information subject to legal regulation, oversight, and supported by enforcement measures6. The source of the obligations concerning the websites of publicly held companies consists of the TCC, the CML, secondary regulations implementing these laws, and the relevant regulations. Below, the legislation under which the obligations of publicly held companies regarding their websites are regulated is examined.

A. Provisions under the TCC

Certain amendments were made to the Turkish Commercial Code through Law No. 6335, and within this framework, the provisions regarding the obligation of publicly held companies to establish a website were reorganized. Prior to the amendment made under the Turkish Commercial Code and the Law Amending the Turkish Commercial Code on Its Entry into Force and Implementation numbered 6335 (“Law No. 6335”)7, Article 1524/1 of the TCC provided that every capital company was obliged to establish a website. The scope of this article included corporations, limited liability companies, and limited partnerships with capital divided into shares. The phrase “every capital company” in Article 1524 of the TCC was repealed by the amendment and replaced with the expression “capital companies subject to independent audit pursuant to the fourth paragraph of Article 397.” With this change, the obligation to establish a website no longer applied to all capital companies; it became an obligation only for capital companies subject to independent audit. Indeed, the obligation previously imposed on every capital company was removed by the amendments made under Law No. 6335 before the regulation entered into force, and the authority to determine which companies would be subject to independent audit was granted to the Council of Ministers under the Law, which today rests with the President8. This amendment significantly narrowed the scope of companies required to establish a website. With the introduced innovation, Article 1524 of the TCC;

“Capital companies subject to independent audit pursuant to the fourth paragraph of Article 397 are obliged to establish a website within three months from the date of their registration in the trade registry and to dedicate a specific section of this website to the publication of notices that the company is legally required to make. The contents to be published on the website must be published within the period specified in this Law, if such a period is indicated; if no period is specified, within five days from the date on which the transaction or event on which the content is based occurs; and in cases where registration or publication is required, within five days from the date of such registration or publication. Contents that are required to be published for the period between the company’s establishment and the date of the website’s establishment shall also be placed on the website on the date it is opened.”

Within this framework, the most critical issue for determining whether companies are subject to the obligation regulated under Article 1524 of the TCC is the determination of whether the companies are subject to independent audit.

1. Capital Companies Subject to Independent Audit

Pursuant to Article 397/4 of the TCC9, the authority to determine which capital companies shall be subject to independent audit is vested in the President. Within this framework, under the currently effective Decision on the Determination of Companies Subject to Independent Audit (“Decision”), the principles regarding which companies are subject to audit have been established. Accordingly, some companies have been included directly within the scope of independent audit regardless of their fields of activity, while others have been included in this scope only if they exceed certain financial and structural threshold values. Pursuant to Article 3 of the Decision, companies subject to independent audit are divided into two main groups; (i) those subject to audit without any criteria and (ii) those exceeding the specified threshold values:

Companies subject to audit regardless of criteria are those operating in strategically important fields explicitly listed in Annex (I) to the Decision. This list includes institutions such as investment firms, portfolio management companies, mortgage financing institutions, leasing companies, banks, rating agencies, factoring and finance companies, asset management companies, and savings finance companies. Companies not included in this list are subject to audit if they exceed at least two of the three established criteria concerning total assets, annual net sales revenue, and number of employees for two consecutive financial periods. The specified threshold values are as follows: for publicly held companies, total assets of 30 million TL, annual net sales revenue of 40 million TL, and 50 employees; for companies listed in Annex (II), total assets of 60 million TL, annual net sales revenue of 80 million TL, and 100 employees; and for other companies, total assets of 75 million TL, annual net sales revenue of 150 million TL, and 150 employees.

Article 5 of the Decision sets out the principles regarding its implementation. Accordingly, when the threshold values are exceeded for two consecutive years, the company becomes subject to audit from the following financial period. If the threshold values remain below the specified levels for two years or decrease by more than 20% in a single year, the audit obligation ceases. In the assessment process, financial data for the last two financial periods and the average number of employees are taken as the basis; in addition, the subsidiaries and affiliates of the companies are considered collectively.

The purpose of this regulation is to ensure that financial statements are examined by auditors independent of the enterprise within the framework of transparency, reliability, and compliance with international auditing standards. Accordingly, independent audit is positioned as a fundamental audit mechanism that ensures the accuracy of financial information, strengthens the corporate governance approach, and consolidates stability and confidence in the capital markets10.

B. Provisions under the CML and Secondary Regulations

SPKn m. 15; The information disclosure obligations of publicly held joint-stock companies through their websites are not limited solely to the TCC but are further detailed in the Capital Markets Law No. 6362 and the secondary regulations issued within the framework of this Law. Article 15 of the CML provides that:

“Information, events, and developments that may affect the value, price, or investment decisions of capital market instruments shall be disclosed to the public by the issuers or the relevant parties”11.

In order to ensure transparency in the capital markets, issuers and capital market institutions are subject to public disclosure obligations. This obligation requires companies to provide up-to-date and accessible information through their websites in order to support the decision-making processes of shareholders and potential investors.

Although there are numerous secondary regulations detailing the implementation of the CML, among them, the Communiqué on Material Events No. II-15.1, the Communiqué on Corporate Governance No. II-17.1, the Communiqué on Mergers and Divisions No. II-23.2, and the Communiqué on Financial Reporting No. II-14.1 stand out in terms of obligations regarding public disclosure. These regulations have detailed the fulfillment of public disclosure obligations via the internet, the timeframes for publishing content, and the conditions of access.

The Communiqué on Material Events No. II-15.1 requires companies issuing capital market instruments to publish material events concerning their activities, which must be publicly disclosed, simultaneously on the Public Disclosure Platform and their websites within a specified period. The Communiqué provides that the disclosures must be complete and accurate and requires that information capable of affecting investment decisions be announced without delay.

The Communiqué on Financial Reporting No. II-14.1 and the Communiqué on Mergers and Divisions No. II-23.2 also aim to enhance transparency by determining the scope, formal requirements, and publication periods of contents that publicly held companies are obliged to publish on their websites, such as financial reports and documents relating to mergers or divisions.

It is essential that the contents are published in a current, accurate, and complete manner. In addition, the obligation includes ensuring that the published documents remain accessible for specified periods and are archived and preserved when necessary. Accordingly, shareholders and other stakeholders are protected and able to use their rights regarding the company in an informed manner by accessing true, clear, complete, and sufficient information concerning the company’s economic condition and complex interest relationships, as well as information audited by the company’s internal control mechanisms and independent audit firms12.

C. Provisions in the Regulation on Websites to be Established by Capital Companies

The Regulation on Websites to be Established by Capital Companies (“Regulation”)13 was regulated pursuant to Article 1524 of the TCC and governs the scope and technical details of the website obligation. Article 1524/4 of the TCC14 provides that:

“The registration of the site under a number and other related issues are regulated by a regulation by the Ministry of Customs and Trade.”

The Regulation details the general obligation envisaged in Article 1524 of the TCC by setting out technical principles regarding the form, scope, preservation, accuracy, and form of the contents to be published on the website.

Article 6 of the Regulation sets out in detail the contents that companies are obliged to publish on their websites. The scope of the contents that publicly held companies falling within this scope are required to publish on their websites is examined in detail below. In this context, the Regulation provides a detailed framework by listing, in 35 separate paragraphs, the elements that companies are obliged to include in the section dedicated to information society services. The Regulation also specifies that the website to be established pursuant to the TCC must be registered with the company’s Central Registration System number.

Thus, the Regulation establishes an infrastructure that is both consistent with the TCC and capital market regulations and aimed at protecting investors.

III. SCOPE OF OBLIGATIONS

A. Required to Be Published on the Website

Within the framework of the TCC and the relevant regulations, the contents that must be made accessible on company websites are divided into two main groups. These groups consist of contents that must be published continuously and contents that must be updated and published at specified intervals. Documents to be published continuously include fundamental information such as the company’s MERSIS number, trade name, registered address, committed and paid-up capital, and the board of directors or managers. Additionally, information regarding auditors may also be shared within this scope. In the event of any change in the content, the updated version must be published on the website as of the date of the change. On the other hand, contents that must be published at intervals of at least six months include annual activity reports, articles of association, financial statements of recent years, general assembly notices, decisions taken, and relevant announcements. Furthermore, information regarding representation and binding authority, as well as internal regulations concerning the procedures and principles of the general assembly in joint-stock companies, also fall within this category.

Pursuant to Article 1524/5 of the TCC, unless a longer period is specified in the TCC, other relevant legislation, or administrative regulations, the contents added to the website must remain published for at least six (6) months from the date indicated thereon. Failure to comply with this period shall result in the relevant content being legally as not published15.

During a merger process, the merger agreement and report, along with the financial statements and activity reports of the last three years, and interim balance sheets if deemed necessary, must be published on the company’s website at least thirty days prior to the date on which the general assembly will make a decision. With respect to these documents, a notice indicating shareholders’ right to inspect the documents and where they may be accessed must be shared electronically at least three business days prior to the provision of the documents.

Notices of convocations for the general assembly must be made accessible on the company’s website on the same day they are published in the Turkish Trade Registry Gazette at the latest. In the event that the discussion of the financial statements is postponed, this situation must be announced on the same platform within five days. In addition, annulment and nullity actions filed against general assembly resolutions, as well as final judicial decisions related to such actions, must also be published on the website. Furthermore, the minutes of the meetings of the general assembly and of the special assembly of privileged shareholders must be published online within five days from the date of the general assembly.

Amendments to the articles of association are also among the contents required to be published. In this context, resolutions on amendments adopted at the general assembly must be announced on the company’s website within five days after their publication in the Trade Registry Gazette. In a registered capital system, resolutions on capital increases adopted by the board of directors, information regarding new shares, and, if applicable, restrictions on pre-emptive rights must be published in the same manner. In the event of a reduction of the capital, reports on the reasons and methods of the reduction, as well as the general assembly notice, also fall within this obligation. Notices to creditors regarding the capital reduction must, as with other notices, be published on the website no later than five days after their publication in the Trade Registry Gazette.

Decisions of the board of directors or the management board regarding representation authority, reasoned reports prepared in the event of the restriction or removal of pre-emptive rights, calls for payment of share capital, and notices to shareholders in default are also among the documents required to be published online. Technical reports prepared by the board of directors for meetings to be held electronically must also be published. These documents are not limited to being registered and announced in the trade registry; they must also be published on the company’s website and made accessible to the public.

Share acquisition or transfer transactions by enterprises within a group of companies, the shareholding information of directors and their relatives, and control agreements are also transactions that must be disclosed to the public. Such notifications must be published on the website no later than five (5) days after the transaction is executed or after publication in the Trade Registry Gazette.

Actions for the dissolution of the company and final judicial decisions related to such actions must also be announced for the information of the public. Calls and notices to defaulting shareholders must likewise be published online within five days from the date of the announcement.

All these provisions are considered part of a corporate governance approach that reflects companies’ responsibility not only to the trade registry but also to the general public.

It is important not only for companies to establish a website but also to properly publish the contents required to be disclosed on that site. Matters such as the timeframe within which the contents must be posted on the website, the manner of publication, and the period during which the published content must remain accessible are among the key considerations under this obligation. For the proper fulfillment of the obligation, the first paragraph of Article 1524 of the TCC regulates the publication period of the contents, while the fourth paragraph sets out the principles regarding the use of directed messages and their modification16. A directed message is a notice published in the section of the company’s website designated for this purpose, with the date and the phrase “directed message” in parentheses added at the beginning. A directed message does not replace notification to a third party individually; however, if published on the website, the relevant persons are deemed to have been notified when they rely on the directed message. Moreover, this system essentially constitutes a re-publication of information that has already become public through registration in the trade registry.

B. Sanctions in Case of Non-Compliance

The sanctions applicable in the event of non-compliance with the above-mentioned obligation to establish a website and the obligation to publish certain contents required by law on this website are regulated in Article 1524/2 of the TCC17:

“Failure to comply with the obligations set forth in the first paragraph shall constitute grounds for the annulment of the relevant resolutions, give rise to all consequences of non-compliance with the Law, and result in the liability of the managers and members of the board of directors at fault. Criminal provisions are reserved.”

Accordingly, the failure to publish on the company’s website the elements specified in the Regulation, their late publication, their removal before the prescribed period, or the failure to comply with other formal requirements stipulated for publication may result in the nullity of the relevant element. Furthermore, if a resolution which, pursuant to the Regulation, must be announced on the website is not duly published, the annulment of such resolution may be sought.

Article 562/12 of the TTC ruled on that members of the management body of companies that fail to establish a website shall be punished with a judicial fine ranging from one hundred (100) days to three hundred (300) days, and those who fail to duly post the content that must be placed on the website shall be punished with a judicial fine of up to one hundred (100) days18.

For this reason, it is of particular importance that publicly held companies, which are under an obligation to establish a website, actually create their websites, upload the required content thereto in accordance with the relevant provisions of the Regulation, and keep such content up to date. Otherwise, as stated above, serious consequences such as annulment of resolutions, liability of the managers, and criminal sanctions may arise.

Nevertheless, this provision of the law is criticized in legal doctrine due to its ambiguity. In the relevant paragraph, the phrases “Criminal provisions are reserved.” and the statement that a breach of the obligation would constitute grounds for annulment are included. In particular, the violation of the obligation to establish a website or to publish content cannot be regarded, in a technical sense, as a ground for annulment, and such an interpretation is not compatible with legislative drafting technique. Moreover, the scope and sanctions of the regulation are criticized in the doctrine for not being sufficiently clear and specific, and it is considered that the unclear parts should be clarified19.

IV. CONCLUSION

The disclosure of information by publicly held companies through their websites is of significant importance in line with the principles of transparency, accountability, and public disclosure, which constitute fundamental principles of the capital markets. With the increase in digitalization, investors’ expectations for rapid, accurate, and direct access to information have made it imperative for companies to structure these platforms not merely for promotional purposes, but also as an information channel through which they fulfill their legal obligations. In this respect, websites have become a tool for regularly sharing developments related to company activities and publishing various information and documents required by legislation. The purpose of public disclosure, however, is not limited to informing shareholders alone. In an effective public disclosure mechanism, the interests of not only current shareholders but also potential investors, savers in the capital markets, company employees and managers, as well as the state, are at stake. Therefore, the principle of public disclosure concerns a broad audience, particularly investors20.

Primarily under the TCC and the CML, as well as secondary regulations and the Regulation, explicit provisions have been introduced for publicly held companies regarding numerous documents and information that they are obliged to publish on their websites. Financial statements, annual activity reports, material event disclosures, information documents for the general assembly, amendments to the articles of association, merger and demerger transactions, and many similar contents must be published in accordance with the relevant legislation, subject to specific form and time requirements.

However, the publication of the content is not deemed sufficient; it is also of importance that such information be presented properly, accessibly, and in an up-to-date manner. In cases where the contents required to be published are not placed on the website in due time and in due form, the criminal sanctions set forth under Article 562 of the TCC will apply. Consequently, the websites of publicly held companies are regarded not merely as a technical platform, but also as an integral part of corporate governance and the public disclosure system.