In joint stock companies, the general assembly is of critical importance as the highest decision-making body. The decisions taken can directly affect the future of the company and the rights of its shareholders. For this reason, it is essential that general assembly decisions comply with the law and principles of honesty.

However, fair and legal decisions may not always be taken. In such cases, the cancellation lawsuit mechanism provided by the Turkish Commercial Code (TTK) comes into play. In this article, we will examine in detail the issue of cancellation of general assembly decisions in joint stock companies.

Reasons for Cancellation of General Assembly Decisions

According to Article 445 of the Turkish Commercial Code, general assembly decisions can be canceled in the following cases:

Contradiction with the law or the articles of association: If the general assembly decision is contrary to the mandatory provisions of the TCC or the articles of association of the company, it may be annulled.
Violation of the rule of honesty: The general assembly decision can be annulled if it is aimed at a purpose that violates the rights of shareholders or third parties, harms the company or provides unfair gain.
Irregularity: If the general assembly meeting was convened irregularly or the voting procedures were unlawful, the decision taken may be annulled.
Lack of quorum: If the legal majority required to take the decision is not achieved, it may be annulled.

Who Can File a Cancellation Case?

According to Article 446 of the Turkish Commercial Code, the following persons may file a lawsuit for the annulment of the general assembly decision:

Shareholders: Regardless of the percentage of shares he owns, a shareholder can file a lawsuit if he thinks that the general assembly decision violates the rights of himself or other shareholders.
Board of Directors: If the board of directors thinks that the general assembly decision is against the law or the articles of association, it can file a lawsuit.
Board Members: Each board member can file a lawsuit if he/she thinks that the general assembly’s decision is unlawful.

How to File a Cancellation Case?

A lawsuit for the annulment of the general assembly decision is filed in the commercial court of first instance where the company headquarters is located. The lawsuit must be filed within three months from the date of the general assembly decision. This period is a limitation period and if it is exceeded, the right to sue is lost.

In the case, it must be clearly stated the reason for the annulment of the general assembly decision for which annulment is requested. Additionally, evidence that will form the basis of the case must also be presented.

Case

As a result of the review, the court decides to cancel or reject the general assembly decision. If the court decides to annul the decision, the legal consequences of the annulled decision disappear.