Author: Prof. Dr. H. Ercument Erdem
The process for revision of the Swiss corporate law was initiated in 2007, and the process continued for some time. During this process, the reform on accounting law and excessive compensation of managers, separately, entered into force, and the corporate law reform was delayed. On 28 November 2014, the Federal Council published a new draft bill on the Swiss corporate law reform, and the Draft Bill on Corporate Law Reform (“Draft”) was submitted for consultation on 15 March 2015.
The draft makes provisions in different areas. In general, the Draft covers revision on capital structure, shareholders’ rights, excessive compensation of managers, and other provisions that are not directly relating to corporate law. This newsletter addresses the substantial revisions proposed by the Draft, and comparison of these revisions with the Turkish Commercial Code (“TCC”).
Provisions on Capital Structure
Art. 621 of the Draft allows for share capital to be in foreign currency. Accordingly, actions concerned with the share capital, such as the formation of legal reserves, distribution of dividends, and determination of over-indebtedness, may be determined in foreign currency. The purpose of these provisions is to eliminate the inconsistencies between corporate law and accounting rules that already allow for accounting in foreign currency. In accordance with Art. 332/1 of the TCC, the minimum amount of share capital is stipulated in Turkish Liras. Additionally, Art. 70/1 of the TCC provides that financial statements shall be prepared in Turkish, and using Turkish Lira. The Tax Procedural Law (“TPL”) provides an exemption regarding bookkeeping in foreign currency for certain companies (Art. 251/1 and 2 of TPL). Except for those as stated, there are no provisions in Turkish Law that allow accounting and capital denomination in foreign currency.
