Existing Facilitations for Capital Loss and Over-Indebtedness Calculations are Extended until 2026
Article 376 of the Turkish Commercial Code numbered 6102 (the “TCC”) regulates the measures to be taken and the precautions to be implemented by the board of directors of the company, and the procedures to be followed in cases where the company suffers capital loss or becomes over-indebted, to ensure the protection of the financial structure of the company and to secure the rights of creditors of the company.
The Communiqué on the Procedures and Principles for the Implementation of Article 376 of the Turkish Commercial Code numbered 6102 (the “Communiqué”), published on September 15th, 2018, further details the implementation of the relevant article. One of the most striking aspects of the Communiqué is the exemption granted under Provisional Article 1 regarding the calculation of companies’ capital loss and over-indebtedness. According to this exemption, the following points may be disregarded and not taken into account in the calculations conducted within the scope of Article 376 of the TCC regarding capital loss or over-indebtedness:
This exemption was initially introduced with the Communiqué in 2018, to be valid until January 1st, 2023, it was subsequently extended to January 1st, 2024, in 2022, and to January 1st, 2025, in 2023, and finally, with the Communiqué Amending the Communiqué on the Procedures and Principles for the Implementation of Article 376 of the Turkish Commercial Code numbered 6102, published in the Official Gazette dated December 25th, 2024, the exemption has been further extended to be applicable until January 1st, 2026.
With this temporary extension for the exemption, companies are given additional time to manage the effects of the current economic fluctuations and to improve their financial structures. Therefore, it is essential for companies to take this matter into consideration in their financial planning.
TCC Administrative Fines are Updated for 2025
With the Communiqué on Administrative Fines to be Imposed in 2025 Pursuant to the Turkish Commercial Code numbered 6102, published in the Official Gazette dated December 24th 2024, the administrative fines applicable under the TCC for 2025 have been updated, and these fines have been increased at the revaluation rate of 42.93% as determined in the General Communiqué on the Tax Procedure Law (Serial No: 574), published in the Official Gazette dated November 27th 2024.
The violations under the Communiqué and their corresponding administrative fines to be applied in 2025 are outlined in the below table:
|
Violation Description |
Article Ref. (TCC) |
Administrative Fine 2025 (TRY) |
|
Failure to register transactions required to be registered with their legal period |
33/2 |
17,686 |
|
Providing false statements for registration and records |
38/1 |
35,416 |
|
Unlawful or improper use of trade names |
51/2 |
35,416 |
|
Failure to duly maintain corporate books in accordance with legal procedures |
562/1-a |
70,920 |
|
Failure to duly retain copies of documentation related to the company’s activities in written, visual or electronic format |
562/1-b |
|
|
Failure to obtain opening, interim or closing legalization of corporate books |
562/1-c |
|
|
Failure to duly maintain commercial books and other required records in the Turkish language and to comply with other bookkeeping procedures |
562/1-d |
|
|
Failure to duly prepare the inventory book in accordance with the legal procedures |
562/1-e |
|
|
Failure to duly submit documents required to be retained in electronic mediums |
562/1-f |
|
|
Failure to prepare financial statements in accordance with the accounting standards published by the Public Oversight, Accounting and Auditing Standards Authority. |
562/2 |
70,920 |
|
Failure to notify the Central Securities Depository of bearer share certificates and related shareholder information before distribution of the bearer share certificates |
562/13-a |
138,498 |
The administrative fines indicated in the above table shall apply to administrative fines imposed between January 1st, 2025, and December 31st, 2025, and such amounts are updated annually based on the revaluation rate. Careful compliance with these obligations under the TCC is crucial to avoid the imposition of administrative fines.
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