What is the Special Assembly of Privileged Shareholders?

According to the Turkish Commercial Code (TCC), the Special Assembly of Privileged Shareholders is a body that must convene in joint-stock companies when specific important decisions may infringe upon the rights of privileged shareholders. Instances requiring the approval of this assembly include amendments to the articles of association or granting the board of directors the authority to increase the capital.

In the following cases, privileged shareholders’ rights are deemed violated, necessitating the convening of the Special Assembly of Privileged Shareholders:

1. Amendments to Articles of Association: When the general assembly makes an amendment affecting privilege rights.
2. Capital Increase: Decisions by the board to introduce new privileged shares as part of capital increase plans.
3. Revocation or Limitation of Privileges: Any decision that revokes or restricts privilege rights or limits them to a specified period.

The board of directors must call the Special Assembly of Privileged Shareholders to convene within one month of the general assembly’s decision announcement. If the board fails to call the meeting, each privileged shareholder may apply to the commercial court within fifteen days after the deadline to convene the assembly.

• Quorum and Voting Requirements: The assembly must reach a quorum with at least 60% of the privileged capital represented and may take decisions by the majority of shares present.
• Non-Attendance: If the assembly does not convene despite being called, the general assembly’s decision is considered approved.

Decisions made in the assembly must be documented with minutes, which must be submitted to the board of directors within ten days. Alongside the minutes, a list of signatures from dissenting shareholders is also provided.

• Annulment Case: If the Special Assembly does not approve a decision, the board may initiate an annulment case within one month, arguing that the general assembly's decision did not violate shareholder rights. This case is heard at the commercial court where the company is headquartered.

A Ministry representative must attend the assembly, and the minutes gain official status with their signature. The minutes and relevant details are published in the Turkish Trade Registry Gazette.

Attorney Hüseyin Bayar, founder of Bayar Law Office, has thoroughly examined the operation, rights violations, and annulment procedures for the Special Assembly of Privileged Shareholders under Article 454 of the Turkish Commercial Code.

Legal Notice: This article was written by Attorney Hüseyin Bayar and belongs to Bayar Law Firm. Unauthorized use or copying is prohibited.