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Directors of Turkish joint stock companies can be held liable for their actions or failure to act for various reasons. Apart from numerous liabilities, duties and responsibilities stipulated under the Commercial Code, directors of joint stock companies may also be held liable under tax laws and laws imposing criminal liabilities.
One of the financial benefits of being a shareholder in a joint stock company is the opportunity to participate in profit sharing. Under Turkish law, obtaining dividends is deemed a basic shareholder’s right. This update looks at how dividends are distributed among shareholders and transferred abroad.
Corporate governance is accepted as an important pillar in the architecture of the 21st-century global economy. However, no two countries handle corporate governance in exactly the same way. Comparative research has explored two distinctive patterns in advanced industrial countries: the shareholder system and the stakeholder system. The challenge is to decide under which system Turkey falls.
The legal framework within which foreign foundations, associations and other non-governmental organizations (NGOs) operate in Turkey has been amended and new regulations have been issued within the context of Turkey's efforts to harmonize its legislation with that of the European Union.
The Commercial Code is likely to be updated in the next few years to cope with the changing needs of market players. Internal committees, ethic codes, minimum education levels for board members and similar corporate governance-related concepts are expected to be introduced. Meanwhile, the Capital Markets Board's programme for 2003 includes plans for the introduction of a best practice code.
Recent economic downturns have affected many Turkish companies. Article 324 of the Commercial Code details the procedure to be followed by a company's board of directors if the company's net assets fall below a certain level.