According to Article 486 of the Turkish Commercial Code (TTK) No. 6102, shares must be printed and distributed to shareholders within three months following the payment of all bearer shares. This rule is mandatory in all public and non-public joint stock companies.
So, why was this rule introduced?
• Facilitating the transfer of shares: Bearer shares can be transferred more easily than registered shares. In this way, the change of hands of company shares accelerates and its liquidity increases.
• Protecting the rights of shareholders: Since the bearer share is a negotiable instrument whose owner’s identity is unknown, it can be transferred to the company without notification. This situation is important in terms of protecting the rights of shareholders. Because, even if the shareholder can transfer his shares without notifying the company, the company will not be aware of this transfer. This may lead to the shareholder being deprived of his rights against the company.
• Making it easier to track capital flows: Printing and distributing bearer shares makes it easier for the company to track capital flows. Because the company can keep records of the number of shares it prints and to whom it is distributed.
So, what happens if bearer shares are not printed?
If bearer shares are not printed or distributed in violation of Article 486 of the Turkish Commercial Code, shareholders may file a lawsuit against the company and request their printing and distribution. Additionally, if the company does not fulfill this obligation, shareholders can hold the company responsible for the losses they suffer.
Printing and distributing bearer shares is an important obligation in joint stock companies. Failure to fulfill this obligation may harm the rights of shareholders and cause financial losses to the company.
