Electronic General Assembly and Board of Directors meetings, which have been included in our legislation with the enactment of Turkish Commercial Code numbered 6102 in 2012, have become an increasingly attention-grabbing issue with rise in the importance of social distance in our lives due to COVID-19.
As a matter of fact, Article 1527 of the Turkish Commercial Code allows the meetings of the Board of Directors of the Joint Stock Company and the Board of Managers of the Limited Company to be held electronically and also the General Assembly meetings in the Joint Stock Companies and Limited Companies on the condition that it is regulated in the company’s articles of association. In this context, the conditions arising from :
-the “Communique on the Board Meetings to be held electronically in commercial companies other than Joint Stock Company General Assemblies”, published in the Official Gazette on 29.08.2012.( Communique) in terms of Board of Managers / Board of Directors meetings and Limited Company General Assemblies; and
– “Regulation Regarding The Electronic General Assembly Meetings Of Joint Stock Companies” (“Regulation”) published in the Official Gazette on 28.08.2012 for Joint Stock Company annual general assembles, must be fulfilled. If we take a look at the essential points of these conditions:
Requirement for the Existence of a Provision for Electronical Meeting in the Articles of Association: Joint Stock companies that would like to hold their Annual General Assemblies electronically are required to add the sample article about electronically participating to and voting in annual meetings as regulated in Article 5 of the Regulation to their articles of association, without any amendment. In a similar way, it is mandatory to include the provision which is stipulated in the Article 8 of the Communique in the articles of association of joint stock companies / limited liability companies, which will implement the system of attending and voting electronically to the Board of Directors meetings. Limited liability companies that will implement the electronic participation and voting system in their annual General Assemblies must have the sample provision which appear in Article 6 of the Communique in their articles of association.
(During the Pandemic Period, within the scope of Covid-19 measures the Ministry of Commerce allowed companies to hold a general assembly or board of directors meetings electronically, even if there is no provision in the articles of association.
In this context, it has been reported that all companies which have not held the annual meeting/ shareholders’ assembly yet, can validly hold their e-general assembly meetings through e-GKS, even if there is no provision in their articles of association, based on the authority given by the Ministry of Commerce, until the end of 2020.)
Technical Requirements: In order to vote electronically in accordance with Article 1527 of the Turkish Commercial Code, the Regulation and the Communique;
– The company must have a website that is allocated to this purpose.
– If it is the Board of Directors in question, it is necessary to make an arrangement on this subject in the Company’s internal directive or take a principle decision. If it is the General Assembly in question, the relevant shareholder must make a formal request for this and in any case, a technical report must prove the eligibility of electronic media to participate effectively, this report must be registered and formally announced via the Trade Registry.In addition, shareholders and members of the Board of Directors who wish to use the electronic environment must inform the company of their e-mail addresses.
According to the regulation, electronic participation in general assemblies for Companies listed on the stock exchange in accordance with the Capital Market Law will take place through the electronic platform provided by the Central Securities Depository (“MKK”) And for other companies, it is carried out on the information system which they will set up or get support services in accordance with Turkish Commercial Code Art.1527.3.As explained in detail below, it is also possible for unlisted stock companies to obtain this service from Central Securities Depository.
Obligation to have a Ministry Representative at the General Assemblies of Joint Stock Companies in Electronic Environment: Companies implementing the electronic participation system to the General Assembly are obliged to have a representative of the Ministry of Customs and Trade in accordance with the “Regulation on the Procedures and Principles of the General Assembly Meetings of Joint Stock Companies and the Ministry of Customs and Trade Representatives Attending These Meetings”
Secure Electronic Signature: In order for the general assembly to be held electronically, the participants must have secure electronic signatures.
E-General Assembly and E-Board of Directors Services provided by the Central Registry Agency:
As the Central Securities Depository (CSD) of Turkish Capital Markets, the official institution that provides registration, settlement and custody services to its members, As well as providing Electronic General Assembly services for both public and non-public companies, they have also started to prvoide Electronic Board of Directors services for all companies, whether public or not, by the year 2020. The “e-General Assembly” and “e-YKS”, where this service is provided, are information systems where joint stock / limited partnership annual meetings and also joint stock company Board meetings and other Board meetings of companies can be held in a legally valid manner in electronic environment.
Conclusion: As can be seen, for many companies, holding E-General Assembly and Board of Directors meeting still require various technical and bureaucratic conditions; For companies which can not fulfil these mandatory conditions, it may be considered, at least, to take Board of Directors resolutions by way of distributing the resolution text amongst members for collecting signatures in accordance with the old practice as permitted by the Turkish Commercial Code, and delay their General Assembly meetings until the dates that they will feel secure.
For Electronic general meeting system:
For Electronic board of directors system:
Our previously published article about the e-YKS service which provided by CRA: