The Communiqué (“Amendment Communiqué”) Amending the Communiqué on Procedures and Principles Regarding the
Implementation of the Article 376 of Turkish Commercial Code No. 6102 (“Communiqué”) has been published in the Official
Gazette dated 26 December 2020 numbered 31346 and entered into force as of its publication date.
By the Amendment Communiqué, certain explanatory regulations related to the situations of capital loss and insolvency,
and additional expense items that can be excluded from the calculations regarding capital loss and insolvency have been
introduced.
What’s New:
Regarding half of the sum of the capital and legal reserves becoming unsecured due to losses:
The wording “
due to losses” has been added to the heading of the article regarding “half of the sum of the
capital and legal reserves becoming unsecured”, as a case of capital loss regulated under the Communiqué.
In this regard, it is also clarified that at least half of the sum of the capital and legal reserves becoming unsecured
refers to the case in which “the loss is either equal to half or, more than the half and less than 2/3 of the sum of the
capital and legal reserves”.
Regarding two thirds of the sum of the capital and legal reserves becoming unsecured due to losses:
The case in which “two thirds of the sum of the capital and legal reserves becoming unsecured due to losses” has been
amended as the case in which the loss is either equal to or more than two thirds of the sum of the capital and legal
reserves.
Regarding capital decreases:
Per the Amendment Communiqué,
the fact that remaining capital may be less than a third of the capital before loss,
regarding capital decreases that may be implemented when two thirds of the sum of the capital and legal reserves become
unsecured due to losses, is emphasized through alteration of the statement of “to continue with a third of the capital”
with “to continue with
the remaining capital”.
Accordingly, provided that at least half of the sum of the capital and legal reserves are preserved within the equity,
capital decrease may be carried out down to the minimum share capital amount, being TRY 50.000 and TRY 10.000 in terms
of joint stock companies and limited liability companies, respectively.
Regarding the completion of the unsecured amount of capital:
Per the Communiqué, in case a decision is adopted by all or some of the shareholders to cover the deficits in the
balance of sheer, every shareholder will be obliged to pay an amount of money that would cover the amount that became
unsecured due to losses. Accordingly, any payment made regarding these, are to collected and monitored in the capital
completion fund account within the equity.
The Amendment Communiqué provides that
the capital completion fund may be used only by setting off losses.
Regarding capital increases without any capital decrease:
In case a decision is made to increase capital without a capital decrease at the amount of the losses, the amount that
will ensure that at least half of the sum of the capital and the legal reserves are preserved within equity is required
to be paid before the registration of the capital increase.
However, it is also stipulated that capital may be increased at the desired amount and then be decreased, without the
requirement of paying the amount mentioned above, by paying the share contributions in full.
Regarding calculations about capital losses and insolvency:
The Communiqué provides that losses stemming from exchange rate differences related to the unpaid foreign currency
liabilities of companies may be excluded from the calculations regarding capital losses and insolvency until 1 January
2023.
By extending the items to be excluded from such calculations which were solely comprised of exchange rate losses per the
Communiqué, the Amendment Communiqué provides that half of the sum of (i) expenses stemming from leases accrued in 2020
and 2021, (ii) amortizations, and (iii) labor costs from such calculations.
However, even such expense items are not to be included in financial statements, the Amendment Communiqué provides that
these are to be indicated in footnotes for information.
Conclusion
Certain explanatory regulations regarding financial position analyses and certain expense items that may be excluded
from calculations regarding insolvency have been introduced by the Amendment Communiqué and these matters must be taken
into account by companies during their assessments.
Please click
here to access
the full text of the Amendment Communiqué.
Nur Duygu Bozkurt Kadirhan, Senior Associate
Burak Batı, Associate