In joint-stock companies under Turkish Commercial Code numbered 6102 (“TCC”), share certificates can be issued as in two types, which are registered or bearer.
In accordance with the Law numbered 7262, fundamental changes have been made on the issuance of bearer share certificates. As part of these regulations which are made to comply with the Financial Action Task Force (“FATF”) recommendations, it has become possible to track holders of bearer share certificates by registering them to the Central Registry Agency in Turkey - Merkezi Kayıt Kuruluşu A.Ş. (“MKK”) in order to fight against the financing of terrorism and money laundering.
Prerequisites to issue a bearer share certificate
To issue a bearer share certificate as per TCC,
1. Company's articles of association have to include an article stipulating that the share certificates are bearer,
2. Either in company establishment or capital increase, registration of company's articles of association has to be completed by the trade registry, and
3. Share price has to be paid in full.
If bearer share certificate is issued before these prerequisites are met, it will be invalid, and this invalidity will not be remedied even if the conditions are met afterwards. In such a case, joint-stock company has to reissue share certificates according to the procedure outlined in the TCC and Communiqué on Notification and Registration of Bearer Share Certificates to the Central Registry Agency (“Communiqué”) after the prerequisites are met.
Notifications to be made by share certificate holders and companies according to Communiqué
The Communiqué set forth three notifications to be made either by the share certificate holder or company.