Author
Çığşar, Melis Gizem
Publication Date
2018-11
Subject
Law
Type
Document
Language
Turkish
Digital
Yes
Manuscript
No
Library
Özyeğin University
Record ID
eebd0217-8477-41e0-a59c-1719ea35df34
Library Location
Department of Private Law
Date
2018-11
Sample Text
Limited company capital shares can be pledged to provide security for a receivable. Pledging of the capital shares of a limited company has become an issue that needs to be examined because the limited company has both the characteristics of an individual and a capital company and the shares held by the partners are special. The pledge established on the limited company share is established on the property rights owned by the partner. For this reason, the pledge established on the share is within the scope of TCC art. regarding the pledge of rights under the movable pledge provisions of the Turkish Civil Code. It is established within the framework of the provision of 955/III. In this context, with reference to the provision regarding the pledge of the share, the Turkish Commercial Code article regarding the transfer of the capital share. Provision 595 applies. The Turkish Commercial Code, which paves the way for capital shares to be pledged, also allows share pledges to be subject to company approval. In this case, the pledge of the share, TCC art. TTK art. regarding the transition with reference to article 600 (2). Provision 595 applies. Thus, in both cases, the right of lien is established by notarizing the signatures of the parties in addition to the written pledge agreement. However, if the pledge is subject to approval, additional general assembly approval is required to establish the pledge. If the pledge is subject to general assembly approval, the company may refrain from granting permission only if there are justified reasons. Therefore, with the Turkish Commercial Code, it is quite clear that limited company shares can serve as collateral. If the receivable secured by the pledge is not met, the creditor is satisfied by converting the pledge into cash. In case a pledge is established on the principal capital share of the limited company, as a result of the receivables secured by the pledge not being met by the debtor, the creditor obtains his receivables by converting the share into cash., The share capital of a limited liability company can be subject to a pledge to constitute security for a receivable. Establishment of a pledge over the shares of a limited liability company is a matter that should be examined due to the fact that the limited liability company contains the features of both a partnership and a corporation together and the shares of the partners of the limited liability company have special characteristics. A pledge over a capital share is established over the property ownership of a shareholder. Therefore, the pledge right on a capital share shall be established in accordance with Article 955/3 of Turkish Civil Code, which concerns pledge rights over moveable assets. In this context, as per the stated provision, Article 595 of Turkish Commercial Code which concerns the transfer of basic capital shares shall apply to the establishment of a pledge on the capital share. The Turkish Commercial Code requires that the establishment of a pledge over a capital share be subject to the prior approval of the company. In this case, as per, Article 600/2 of the Turkish Commercial Code, Article 595 of Turkish Commercial Code which concerns the transfer shall be applied to the establishment of pledge right on a capital share. Thus, in both cases, the pledge right must be established by a written pledge agreement, as well as the notarized signatures of the parties. But if the pledge is subject to approval of the company, the approval of the general assembly is also required to establish the pledge right. Where the pledge is approved by the general assembly, the board of the company may only refrain from giving permission if there are justified reasons. Therefore, the shares of a limited liability company can function as collateral according to Turkish Commercial Code. Upon non-payment of the receivable that has been secured with the pledge, the creditor shall be satisfied by conversion of the pledge into cash. In case there is an establishment of a pledge right on the basic capital share of the limited liability company, the creditor shall be satisfied by conversion of the share into cash as a result of the debtor's non-payment of the receivable which has been secured with the pledge.
