Communique on the Procedures and Principles Governing the Enforcement of Article 376 of the Turkish Commercial Code (Share Capital Loss / Technical Insolvency)

The Communique on the Procedures and Principles Governing the Enforcement of Article 376 of the Turkish Commercial Code numbered 6102 (“Communique”), which concerns Article 376 of the Turkish Commercial Code (“Code”) regulating the share capital loss and technical insolvency of companies, entered into force upon publication in the Official Gazette on September 15, 2018.

The recently promulgated Communique aims to provide concrete guidelines to be followed by companies that are experiencing serious financial troubles. The Communique establishes the details of the measures to be taken when the assets of joint-stock companies, limited liability companies and partnerships divided into shares are not sufficient to cover their liabilities, or when they face technical insolvency. The Communique follows the structure of the Code, in that it provides different measures for the loss of half and two-thirds of the share capital and legal reserves and for technical
insolvency.

For full copy of the alert, please click here.