Share certificates may be bearer or registered. The transfer of bearer share certificates shall be effective for the company and third parties only upon the transfer of possession. Unless otherwise stipulated in the Turkish Commercial Code or the articles of association, registered shares may be transferred without any restriction. Transfer by legal transaction may be made by transferring the possession of the endorsed registered share certificate to the transferee (Article 489-490 of the TCC).
The principle in joint stock companies is that registered shares may be freely transferred. The only exception to this principle stipulated in the Turkish Commercial Code is the registered shares that have not been paid in full. Such shares may be transferred only with the approval of the company, even if not specified in the articles of association. This provision is a guarantee for the unpaid share price. The company should not be confronted with persons who are unable to pay for unpaid shares.
Pursuant to Article 492 of the TCC, the articles of association may stipulate that registered shares may only be transferred with the approval of the company. If the company is in liquidation, the restrictions on transferability are dropped. Article 492/1 of the TCC, while stating that the articles of association may provide that registered shares may be transferred only with the approval of the company, only sets the principle. The principle is that the restriction on transferability may be made by such an articles of association (other than the restriction under Article 491 of the TCC) and by making the transfer subject to the approval of the company.
The principle does not allow companies to include in their articles of association the provision “The transfer of registered shares is subject to the approval of the company.” The principle leaves it to the following articles how such a restriction should be written in two different classes of companies. The Company shall register the holders of unregistered shares and registered share certificates and the holders of usufruct rights with their names, surnames, titles and addresses in the share ledger. Unless it is proved that a share has been duly transferred or a usufruct right has been established, the transferee and the usufructuary cannot be recorded in the share ledger. The Company shall indicate the registration in the share certificate. In relations with the company, only the person registered in the share ledger shall be deemed to be the shareholder and the beneficial owner.
It is also stated in the decisions of the Istanbul Regional Court of Justice that the transfer of registered share certificates through assignment of receivables is possible; Istanbul Regional Court of Justice 43. Civil Chamber dated 7.4.2022 and numbered 2022/623 File No 2022/441 Decision No.; “…In joint stock companies, for the transfer of a registered share certificate, an ASSIGNMENT DECLARATION or a complete endorsement on the back of the certificate, as well as the transfer and delivery of the possession on the certificate is required. . The transfer of a registered share certificate shall be effective against the company only upon registration in the share ledger ( Art. 416 TCC No. 6762; Art. 490 TCC No. 6102). Registration in the share ledger is explanatory, not constitutive. It does not affect the validity of the transfer, nor does it have a constitutive effect for the transfer.” (In the same direction, Istanbul Regional Court of Justice 12th Civil Chamber’s Decision No. 2018/320 File No. 2019/447 dated 28.3.2019; Istanbul Regional Court of Justice 13th Civil Chamber’s Decision No. 2018/476 File No. 2019/279 dated 27.2.2019; Istanbul Regional Court of Justice 13th Civil Chamber’s Decision No. 2020/1896 File No. 2021/37 dated 21.01.2021; 11th Civil Chamber of the Court of Cassation dated 25.11.2019 2019/416 File No. 2019/7469 Decision No.
It is also emphasized in the decisions of the Court of Cassation that the transfer of registered share certificates through assignment of receivables is possible (Court of Cassation General Assembly of Civil Chambers dated 12.11.2014 . 2014/11-801 File No. 2014/891 Decision No. ; 11th Civil Chamber of the Court of Cassation 27.10.2015 T. 2014/15601 File No. 2015/11180 K. ; 11th Civil Chamber of the Court of Cassation 15.06.2009 T. 2008/3401 File No. 2009/7321 K. ; Y.11.HD. 15.06.2009 T. 2008/3401 File No. 2009/7321 Decision No. ; 11th Civil Chamber of the Court of Cassation dated 08.11.2004 2004/1848 File No. 2004/10978 Decision No.).
As a result, in the transfer of share certificates in joint stock companies, there are transfer transactions that can be made by endorsement of share certificates or by declaration of assignment. While the transfer of bearer share certificates becomes effective upon the transfer of possession, the general principle is that registered shares are freely transferable. However, certain restrictions may be imposed with the security of unpaid share fees and with the approval of the company. It is possible to specify these limitations in the articles of association. Furthermore, a declaration of assignment or endorsement is required for the transfer of share certificates. The registration of the transfer of shares is important to identify the shareholders and beneficial owners. The transfer of registered share certificates through assignment of receivables is considered legally valid. Therefore, the transfer of share certificates in joint stock companies must be carried out in accordance with the relevant legislation and the company’s articles of association.