Annulment of General Assembly Resolutions of Joint Stock Companies and the Influence Rule
Author: Att. Ecem Cetinyilmaz
Introduction
The shareholders, board of directors, and each member of the board of directors are entitled to challenge the general assembly resolutions, subject to several conditions. Reasons for annulment are listed under Turkish Commercial Law No. 6012 (“TCC”) as the breach of the law, breach of the articles of association, and breach of especially good faith. This article focuses on annulment cases brought by especially the minority shareholders and the implementation of the influence rule. On the other hand, the rules of procedure have not been addressed.
Annulment of Resolutions
The right to claim for annulment of general assembly resolutions is the principal defense mechanism that the minority shareholders are entitled to against the abuse of the majority shareholders. It is neither possible to remove, nor limit, such right by the articles of association or a general assembly resolution, nor it is conditional upon whether or not the capital commitment has been paid by the claimant shareholder. Article 446 of the TCC regulates the shareholders who can challenge the resolutions in two separate groups: shareholders who attended the meeting but cast negative votes; and shareholders regardless of whether or not they attended the meeting.
