The new Turkish Commercial Code introduced a few changes related to the obligations of companies regarding their directors and board of directors. These changes came into force in 2012, after the new law, especially created to be in accordance with the international standards, was published in the Official Gazette.
One of the major changes in the Turkish legislation is the one about the structure of the board of directors that can be composed of at least one person. In the past, there was a requirement that the board of directors to be constituted of minimum three members.
This provision is better for foreign investors who can do business abroad easier because the board meetings can be organized in a simple way. The board members don’t have to go in person to these meetings, as it was stipulated in the old legislation; they can be present in an electronic environment and sign the documents required electronically.
So, the foreign citizens won’t have to spend time and money to travel abroad in order to assist to different board meetings. This provision ensures a business friendly environment in Turkey for foreign entrepreneurs who are allowed to appoint legal entities, if they want, as board members who don’t have to be shareholders.
For a joint stock company, it is mandatory to have a board of directors.
Who can be director of a Turkish company
When you want to select directors for your company in Turkey, you should know that they can be foreigners and you need to respect the Turkish legislation as any other local entrepreneur. The foreign directors will have the same rights and obligations as the local ones.
The directors of a company in Turkey have certain obligations regarding the financial situation. If there are financial problems, the directors must inform the shareholders and prepare a report regarding the reasons of that situation and different methods to remedy this.
The directors are liable for the damages produced to the company because of their fault and they must respond in front of the shareholders and creditors. The director is required to always act in the best interest of the company, avoiding the conflict of interests. They must act with caution in their activities for the benefit for the company.
If you need more information about how you can appoint a director of a Turkish company or you need legal assistance for your company, you may contact our law firm in Turkey. Our Turkish lawyers will help you with all the legal aspects of a business in this country.