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Rightful Termination of Companies

In article 636/3 of the Turkish Commercial Code numbered 6102, the termination of limited liability companies for just cause was mentioned;

“In the presence of just cause, each partner can request the dissolution of the company from the court. Instead of the request, the court may decide on the payment of the real value of the share of the plaintiff partner and the dismissal of the plaintiff partner from the company or any other solution that is appropriate and acceptable to the situation.”

Although the termination of the company for just cause is mentioned in the article in question, what these just causes are not even counted as an example. The court will evaluate and determine whether there is a just cause by evaluating the just cause according to the nature of each concrete event.

If it is necessary to give a few examples of just cause;

– Violation of the obligation to treat the partner equally by the company management

– Subjecting the partner to the exclusion, pressure or harassment of the partners with majority votes

– Irreversible damage to the trust relationship between partners

– Continuous deprivation of the shareholder’s right to dividend

– Preventing the partner from entering the company by turning the conflict between the partners into violence and crime

– Continuous loss of the company

– Officers abuse of their duties etc.

It is possible to count many examples of the existence of a just cause. As a result of the trial made by the court, if it is determined that there is a just cause based on the dissolution of the company, the acceptance of the lawsuit will be required. However, as stated in the article of law, even if the Court is satisfied that there is a just cause, it may decide on alternative solutions that will ensure the continuation of the company instead of dissolution. A single example is given in the article of law on what these alternative solutions are; that is, the plaintiff partner is dismissed from the company by paying his share. However, this is not the only alternative solution. Again, according to the characteristics of each concrete event, it should be ensured that the problems that cause just cause are tried to be eliminated by using mechanisms such as annulment of the decision of the general assembly, dismissal of directors or the legal responsibilities of the managers. Because the termination decision is the last resort and if there is another solution, this solution should be tried first.

Where is the competent court?

Commercial Courts of First Instance are the courts for termination of limited liability companies for just cause. The competent court is where the headquarters of the legal entity of the company shown as the defendant is located.

Is there a certain period of time to file a lawsuit?

The legislator has not set a deadline for this case to be filed. However, this does not give the right to open the case at any time. Because, in accordance with the principle of honest behavior, which is the 2nd article of the TMK, the case must be opened within a certain period of time. Since the lawsuit filed after a long period of time after the existence of a just cause will be contrary to Article 2 of the TMK, it will have to be rejected in terms of time.

Is a relative or fixed fee to be paid when filing a lawsuit?

This case has no monetary value. For this reason, the fee is taken as a fixed fee.

Who has the right to file the case? So who is the plaintiff in this case?

The company partner is entitled to file a lawsuit for termination of limited companies for justified reasons. It doesn’t matter how much share this partner has, it is enough to be a company partner. It is not possible to restrict the partners’ right to sue with the contract to be signed.

If the plaintiff partner loses the title of partnership while the case is ongoing, it will require the dismissal of the case. However, there are two exceptions to this situation. These exceptions are the partner’s bankruptcy or transfer of his share. In case of bankruptcy of the partner, the new shareholder has the right to continue the lawsuit in case of bankruptcy administration and transfer of his share.

If a limited liability company consists of a single partner, in this case there is no situation requiring a rightful termination action, since the partner alone constitutes the general assembly and can decide on the dissolution of the company with a written decision.

If the partner, who is given the right to exit, does not leave the partnership and fills a rightful termination lawsuit, the case must be rejected for contradicting Article 2 of the TMK.

Should the lawsuit be brought against the company or against the partners?

The defendant in this case is the legal entity of the company. If a lawsuit is filed against the partners, the case will be rejected out of the absence of hostility. The only exception to this situation is that the company consists of two partners. In this case, if the partner who filed a lawsuit showed the other partner as the defendant, the existence of hostility will be accepted and the case will be filed. The Supreme Court and doctrinal views are in this direction.

In the case filed, the defendant is the legal entity of the company and the company manager will represent the case. However, in cases where the suing partner is also the sole director of the company, a trustee will be appointed to the company and the trustee will represent the legal entity of the company.

Will the simple trial procedure or the written trial procedure be applied?

A simple trial procedure is applied in cases of termination of limited liability companies for just cause.

Hunting. Oznur Yesilnacar

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Özlem Zennup Özkök

Arb. Av. Özlem Zennup Özkök, 2010 yılında Bilkent Üniversitesi Hukuk Fakültesi’nden mezun olmuştur. Bursa Barosu’na kayıtlı avukat ve arabulucudur. Türkiye’nin önde gelen hukuk bürolarında edindiği şirketler hukuku ve birleşme-devralma deneyiminin ardından Bursa’da Özkök Hukuk Bürosu’nu kurmuştur. Aile hukuku, şirketler hukuku ve gayrimenkul uyuşmazlıkları alanlarında çalışmaktadır.

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