The managers’ decisions submitted to the approval of the general meeting: Review of Turkish Commercial Code regulations

Abstract

Article 625/2 of the Turkish Commercial Code (TCC), adapted from the Swiss Code of Obligations (Obligationenrecht 811, hereinafter referred as OR 811), allows managers to submit certain decisions and individual matters to the approval of the general meeting. This paper purports to reveal how this article could be interpreted and the regulations to be made in the agreements of limited liability companies in Turkish law. To do that, an interpretation of article 625/2 of TCC is developed. In addition, the effect of this article on the liability of the managers and the references made to articles 51 and 52 of the Turkish Code of Obligations (TCO) are explained. With a regulation added in the agreement of the company, the managers would either be required to submit or they would be free to choose to submit certain decisions and individual matters to the approval of the general meeting. Considering that the submission slows down the decision-making process and causes additional costs, granting the managers the right to choose becomes an important issue. However, the approval of the general meeting does not remove the liability of the managers. So when a lawsuit for liability is filed against managers, the approval of the general meeting may decrease the payment for compensation (articles 51 and 52 of TCO)