Legislation About Stock Certificates
A registered stock certificate (RSC) is a negotiable instrument that clearly identifies its owner through the details inscribed on it.
A RSC is issued to a specific individual or legal entity, representing their ownership stake in a joint-stock company. In Turkey, shares and their corresponding certificates in joint-stock companies are typically registered.
Section 484 of the Turkish Commercial Code (TCC), numbered 6102, states, “Stock certificates must be either registered or bearer. Shares that are not fully paid-up cannot be issued as bearer stock certificates. Any issued contrary to this rule are considered null and void. However, the rights for compensation of the affected parties are preserved.”
This specifies the nature of stock certificates within a joint-stock company, which must be designated as either bearer or registered.
Mandatory Issuance
Under the old Turkish Commercial Code No. 6762, there was no requirement for joint-stock companies to issue stock certificates. Before the implementation of Law No. 6102, many companies did not issue stock certificates unless they recognized tax benefits from share transfers that were documented through certificates. However, with the enactment of the TCC numbered 6102 on July 1, 2012, there became a statutory obligation for joint-stock companies to issue registered shares when certain conditions are met.
Condition for Mandatory Issuance
TCC No. 6102 mandates the issuance of registered stock certificates if minority shareholders request it. Specifically, Article 486 of the TCC states, “Upon the request of the minority shareholders, registered stock certificates shall be issued and distributed to all such shareholders.” Minority shareholders are defined as those holding at least one-tenth of the company’s capital. Therefore, when minority shareholders make such a request, the company is obliged to issue and distribute registered stock certificates to all shareholders, not just the minority.
Issuance of a registered stock certificate requires expertise and care. For you questions and requests, please contact us.
