Transfer of Shares in Joint Stock Companies - YouTube

Hello everyone.

This is Gurulkan Çakır’s Youtube Channel.

Today’s topic is Transfer of Shares in Joint Stock Companies.

Basically, JSCs can issue two types of shares under Turkish Law.

Namely, registered shares and bearer shares.

In principle, both the registered and bearer shares can be transferred freely without being

subject to any restrictions.

However, there are various exceptions to this rule.

As the name implies, the owner of the bearer shares is the person who holds them in his possession.

Consequently, it is possible to transfer the bearer shares simply by delivering its possession

to the transferee.

It is not mandatory to register the bearer shares to the share ledger.

If not registered, it is impossible for the company to prohibit or limit the transfer

of the bearer shares.

In principle, even the registered shares can be transferred without being subject to any

restrictions.

On the other hand, there are some exceptions to this general rule.

Some of the exceptions are found in the commercial code itself.

Also, transfer restrictions can be foreseen in the articles of association, provided that

they are stipulated in express wording.

Unless the approval of the company has been taken, the registered shares that were not

fully paid cannot be transferred.

The JSC’s power to approve or reject the transfer cannot be used arbitrarily.

The company can abstain from approving the transfer of unpaid registered shares only

if there is reasonable doubt regarding the solvency of the new owner and the collateral

asked by the company was not provided.

It can be stipulated in the AoA that its registered shares, regardless of being paid-up or not,

can only be transferred upon the approval of the JSC.

In case the company that has a limitation in its AoA goes into liquidation, such limitation

will lose its ground and it will be possible to transfer its shares without taking the

approval.

The company may refuse to give its approval in case of an important reason if this is

expressly stated in its AoA.

Unlike limited liability companies, it is not permissible to put a complete ban on the

transfer of shares in a Joint Stock Company.

Turkish Commercial Code has not granted the JSC an unlimited discretion in its right to

avoid approving the transfer of shares.

It is possible to stipulate in the AoA that when a shareholder wants to sell his shares,

other shareholders who have been granted a right of first refusal will be able to buy

such shares before third parties.

The bearer shares of a JSC can be freely transferred by merely delivering their possession to the

transferee.

Even though it is not obligatory, a JSC can issue share certificates.

When there is no share certificate, a written share transfer agreement must be made between

the seller and purchaser.

The transfer of shares must then be registered in the share ledger.

Transfer of shares may trigger various types of taxes such as income tax, corporate tax,

value added tax and stamp duty depending on certain variables.

There are certain exemptions as well.