6) Company Law

Content of Chapter

The Company Law legislation comprises of two main components: "company legislation" and "accounting and auditing".

The rules regarding companies include the main principles on registries, mergers, divisions, impediments, branches, shareholders and receivables. The rules on accounting and auditing regulate the balance sheets of limited liability and joint-stock companies and financial reporting, auditing and accounting principles.

For chapter 6- company law, explanatory screening meeting was held on 21 June 2006, bilateral screening meeting was held on 20 July 2006. One opening benchmark was notified for the opening of the chapter to negotiations.

Opening Benchmark

"Türkiye, presents a detailed strategy to the Commission which has to cover all the necessary changes for compliance with the legislation in terms of company law and financial reporting and at the same time the accurate implementation mechanisms. Strategy, in order to include all these areas, has to cover identified target dates of detailed plans to ensure further alignment with the acquis in this context and should include institutional capacity building measures.” 

A detailed "Strategy Document" including actions and time-frames for legislative alignment and improvement of enforcement was submitted to the EU in order to meet the opening benchmark. Having fulfilled the opening benchmark, the Chapter is opened for negotiations on 17 June 2008 at Intergovernmental Conference.

In addition to the benchmark regarding the Additional Protocol, 5 closing benchmarks are notified for the provisional closure of the negotiations.

Closing Benchmarks

In addition to the benchmark regarding the Additional Protocol, 5 closing benchmarks are notified for the provisional closure of the negotiations in EU Common Position Paper. The so-called technical benchmarks are:

1. Türkiye adopts the Turkish Commercial Code, the law on the entry into force and implementation of the Turkish Commercial Code aligning with the acquis, as well as all relevant legislation aligning with the EU acquis.

2. Türkiye modifies the Capital Markets Law in line with the relevant acquis.

3. Türkiye fully aligns its accounting, financial reporting and statutory audit legislation, including its secondary legislation, with the EU acquis.

4. Türkiye sets up the Turkish Auditing Standards Board as the sole supreme authority in determining auditing standards and ethics, authorising independent auditors and audit companies under a public oversight system and monitoring their activities within the frame of quality assurance.

5. Türkiye reinforces its administrative capacity to appropriately implement and enforce the acquis under Company Law.

Progress Achieved

Following developments have been achieved within the framework of the “Strategy Document” commitments:

Regarding the closing benchmark on Turkish Commercial Code, the Turkish Commercial Code and the Law Pertaining to the Enforcement and Implementation of Turkish Commercial Code were published in the Official Gazette No. 27846 of 14.02.2011. Both laws entered into force on 1 July 2012.

In order to ensure more efficient implementation of the new Code and due to the negative public opinion on some of the articles of the Code, a study on a draft law for amendments on the existing Code has been carried out until 1 July 2012. Within this context, Law No.6335 on “Amending Turkish Commercial Code and the Law Pertaining to the Enforcement and Implementation of Turkish Commercial Code” was published in the Official Gazette No. 28339 of 30.06.2012. With the amendments most of the imprisonments have been altered to fines, the scope of disclosure that companies have to comply has been limited and some aspects of independent audit have been regulated. Studies regarding the secondary legislation still continue.

Regarding the closing benchmark on Capital Markets Law, the new Capital Markets Law No. 6362 (CML) was published in the Official Gazette No. 28513 of 30.12.2012. Part Two/Chapter Three of the Law regarding the Publicly-Held Corporations regulates issues on Company Law.  The new Law includes measures required for the functioning and development of the capital market in a reliable, transparent, effective, stable, fair and competitive environment. The Law also aims to regulate and supervise the capital markets in order to safeguard the rights of investors. Studies regarding the secondary legislation still continue.

Regarding the closing benchmark on the establishment of a single authority for public oversight, accounting and auditing standards, the Public Oversight, Accounting and Auditing Standards Authority was established with the “Statutory Decree on the Organization and Duties of the Public Oversight, Accounting and Auditing Standards Authority” which was published in the Official Gazette on 2 November 2011. The Public Oversight, Accounting and Auditing Standards Authority succeeded the Turkish Accounting Standards Board. The Authority constitutes and publishes Turkish Accounting Standards in conformity with international standards, determine auditing standards and provide unity of implementation, confidence and quality, authorize independent auditors and independent auditing institutions and monitor their activities and perform public oversight in the field of independent auditing.

For the implementation of International Accounting Standards (under the Regulation 1606/2002 of the European Commission), Public Oversight, Accounting and Auditing Standards Authority adopts the standards and their amendments which are issued by the International Accounting Standards Board (IASB).

For the purpose of strengthening the administrative capacity, the Ministry of Customs and Trade carries out the Central Registry System (MERSIS) Project for online processing of company-related actions. The Project aims to allow rapid, easy and reliable access to the information of companies, cooperatives, the branches of foreign companies in Türkiye, the associations and foundations for which the trade registry is compulsory.

With the establishment of Public Oversight, Accounting and Auditing Standards Authority, the fourth closing benchmark was fulfilled. The Commission still works on the evaluation of the state of alignment of the legislation in this chapter.

Related Directory in the European Commission

Company Law Chapter is under the responsibility of DG Financial Stability, Financial Services and Capital Markets Union and DG Justice and Consumers.

For further information:

http://ec.europa.eu/finance/auditing/index_en.htm

http://ec.europa.eu/finance/company-reporting/index_en.htm

http://ec.europa.eu/justice/civil/company-law/index_en.htm