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CORPORATE LAW | TURKEY
NOVEMBER 2020
 

COVID-19: EXTENSION OF TIME RESTRICTIONS FOR PROFIT DISTRIBUTION IN TURKEY

Effective from 16 April 2020, a provisional article was added to the Turkish Commercial Code No. 6102 with the Omnibus Bill No. 7244, which provides that until 30 September 2020, a maximum of 25% of the net profit of capital companies for the year 2019 can be distributed, that profits of previous years and free reserve funds of such companies could not be subject to any distribution, and that their general assemblies would not be authorised to empower the managing body of the company for distribution of advance dividends.

By virtue of the amendment communiqué published in the Official Gazette dated 28 October 2020 and numbered 31288, the Communiqué on Procedures and Principles Regarding the Implementation of Provisional Article 13 of the Turkish Commercial Code numbered 6102 ("Communiqué"), the limitation period provided for capital companies until 30 September 2020 has been amended by the Ministry of Customs and Trade ("Ministry") and extended until 31 December 2020.

Furthermore, with said amendment communiqué, references to the term "profit" stated in Article 5 of the Communiqué regarding the exceptions, and in Article 6 requiring obtaining of approval from the Ministry, has been replaced with "profit or advance dividend". Accordingly, both the titles and the contents of said articles have been revised so as to include the dividend advances. Thus, it has been clarified that the exceptions and implementation set out in the abovementioned articles are not only applicable to profits, but also to advance dividend distributions.

 
CONTACTS

ARPAT ŞENOCAK

Partner
T +90 (212) 385 29 56

senocak@odsavukatlik.com

    PINAR VEZIROĞLU DILEK

    Associate
   
T +90 (212) 385 29 63
    
veziroglu@odsavukatlik.com

MERT KARAKAŞLAR

Associate
T +90 (212) 385 29 73

karakaslar@odsavukatlik.com