General liabilities of the members of the board of directors in joint stock companies under the provisions of Turkish commercial law

Abstract

Purpose- The purpose of this study is to include the general legal liabilities of the members of the board of directors in closed joint stock companies as regulated in the Turkish Commercial Code (TCC) Art. 553 within the scope of the study. The special liability circumstances in TCC regarding the members of the board of directors will be held out of the scope of this study. In joint stock companies, the board of directors is one of the legally mandatory bodies that must be present. According to this provision, the legal liability of board members is based on the principle of fault. However, unlike the abolished Commercial Code, this regulation has adopted the principle of differentiated solidarity regarding the responsibility of the board members abandoning the principle of joint liability. This study covers basic acknowledgements about the principle of fault, differentiated solidarity, liability lawsuit in terms of legal liabilities of the members of the board of directors in joint stock companies. Methodology- In accordance with the principle of fault regarding the liabilities of the members of the board of directors, the fault must be proven for the members to be held legally responsible. The basis for the wrongdoing here may be the legal relationship between the board member and the joint stock company, or the unfair actions of the board members. Since the law maker has removed the presumption of negligence against the board of directors in liability lawsuits to be filed against the members of the board of directors with law No. 6335, the proof of the fault is determined according to the general provisions. The kind of fault that should be existent in the members is objective fault, not subjective fault. According to the principle of objective fault, a board member is obliged to adopt the consideration and care shown by a conscious, sensible and reasonable person in the same social environment. In the presence of these traits and circumstances, members do not bear liability since no kind of faulty act can be attributed. TCC No. 6102 Art. 557 has brought a significant change to the members of the board of directors. With this change, in terms of fault liability instead of joint liability, differentiated solidarity concept has been adopted. Differentiated solidarity means that if more than one party is obliged to indemnify the same damage, each is held liable to the extent that the damage can be charged to each party based on its wilful misconduct and on a case-by-case basis.In order to be able to speak of joint liability principle, to begin with, more than one person should be held responsible for the damage. When the incurred damage is caused by more than one person, there is joint liability among the actors. Findings- In accordance with TCC Art. 553, members of the board of directors shall be held legally liable for the damage they cause to the company, shareholders and company creditors in case they fail to fulfill their obligations arising from the law and articles of association at the extent of their fault. To file a liability lawsuit, the members must act in defiance of the articles of association and the regulations regarding and these acts must lead to a loss of the company. Art. 555 of TCC states that the company and the shareholders have the right to file a suit due to the loses of the joint stock company. Pursuant to the aforementioned provision, the provisions of Art. 553 set forth that members of the board of directors are obliged to pay the losses of the company resulting from their faults to the joint stock company. Conclusion- Unlike the former Commercial Code, TCC numbered 6102 has brought novel changes to the regulations regarding the general liability conditions of members of board of directors in Art. 553. No member without a fault shall be held responsible based on Art. 553. As a result of the amendment made by the law No. 6335, thanks to removal of the principle of the presumption of negligence, the members of the board of directors are relieved of the burden of proving their innocence. In addition, introducing the principle of differentiated solidarity with the Art. 557 an understanding that holds each member of the board of directors responsible only in proportion to their faults in the external relations has been adopted. With this regulation, no member will be held liable for any kind of loss and corruption beyond their control