Content and Functionality of Signature Circulars in Practice and Under Turkish Law

Signature Circular is an official document signed before the Notary in which signature powers of the Company and its branches are determined and the limitations of such powers are detailed. In practice, signature circular is mostly requested by public authorities, banks and third parties in which the Company is represented. Scope and degree of the Company representatives’ signature powers are determined in the signature circular. In case third parties other than the individuals listed outside the Board Members/Limited Liability Company partners are vested with the power of authorization, the limitation of the transactions and the level of authorization of such individuals are determined. Submitting the signature circular for a transaction enables to certify the signature authorities of the signers.

At the incorporation stage of the Company (Joint Stock or Limited Liable), signature circular is based on the Articles of Association. Even though it is possible to appoint third parties as the signature authorities according to the Turkish legislation, the provisions of the Articles of Association determine the appointment procedure of managers or Board members.

It should be noted that it is not necessary to issue a separate Articles of Association for branches located in Turkey since the branches operate in line with the Articles of Associations of the main Company. In such circumstances, signature circular is issued on the bases of the branch representative’ power of attorney. Such signature circular issued before the Notary includes all provisions of the aforementioned power of attorney and authorizes the individual with the power to represent and bind the Company before third parties.
Companies incorporated in Turkey, following the completion of the incorporation transactions and registration of their Articles of Association at the Trade Registry and in the course of their operations, may remove, change or appoint the signature authorities by resolutions settled at the Board of Directors (for Joint Stock Companies) or Partner’s Assembly meetings. In such circumstances, above mentioned resolutions shall be registered at the Trade Registry and a new signature circular shall be issued before the Notary following such registration.

In addition to the aforementioned fact, the signature circular issued before the Notary shall include branch or Company title, registration number of the Trade Registry and date and in the event that the signature authority is not a Turkish native, an English-Turkish statement of a translator shall also be added.



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