Shareholder Disputes
Disputes between shareholders are among the most draining problems a company can face, because the other side is someone you run the company with. We conduct negotiations between shareholders and prepare shareholders’ agreements and share transfer restrictions that prevent disputes; when a dispute arises, we conduct actions arising from the articles of association and the shareholders’ agreement, actions to annul general assembly resolutions and proceedings to protect minority rights.
What is a shareholder dispute?
A shareholder dispute is a disagreement between a company’s shareholders on matters such as management, profit distribution, capital increases, share transfers or exit. Such disputes often come to light through a general assembly resolution, a board action or an attempted share transfer.
How the dispute is resolved depends on the provisions of the articles of association, any shareholders’ agreement, the shareholders’ percentages and the rights granted by the Turkish Commercial Code.
What rights do minority shareholders have?
In non-public joint stock companies, shareholders representing at least ten per cent of the capital have rights such as calling a general assembly and adding items to the agenda, requesting a special audit and, where there are just causes, suing for dissolution of the company. Instead of dissolution, the court may order the claimant shareholder to be bought out at the value of their shares, or another solution appropriate to the situation.
Every shareholder also has the right to information and inspection, and the right to bring an action to annul general assembly resolutions that breach the law or the articles of association.
Scope
- Conducting negotiations between shareholders
- Preparing shareholders’ agreements
- Drafting provisions restricting share transfers
- Conducting civil actions arising from the articles of association and shareholders’ agreements
- Annulment of general assembly resolutions, and protecting and pursuing minority rights
How We Work
- Reviewing the dispute, the company documents and the shareholders’ positions
- Assessing the options of negotiation, exit or litigation
- Conducting negotiations between shareholders and preparing the settlement text
- Where necessary, bringing actions for injunctions, annulment, special audit or dissolution
- Restructuring the company and its agreements after the dispute
Team
Zeynep Nur Çivicik
Partner
Dr. Deniz Okuyucu
Counsel
Buse Yüceer
Associate
Sercan Dolanbay
Associate - Trademark Attorney
Frequently Asked Questions
Within what period must we challenge a general assembly resolution?
In a joint stock company, an action to annul a general assembly resolution must be brought within three months of the date of the resolution. As a rule, the shareholder must have voted against the resolution at the meeting and had their dissent recorded in the minutes. Resolutions that are null and void because they breach mandatory provisions of the law can be challenged without time limit.
Can a shareholder sell their shares to anyone they choose?
In a joint stock company, transfers of registered shares can be restricted by the articles of association; in a limited liability company, share transfers require general assembly approval by law. Additional arrangements such as pre-emption, tag-along and drag-along rights can also be made in a shareholders' agreement.
Can a shareholder who cannot get along with the others be expelled?
In a joint stock company, expelling a shareholder is generally not possible. In a limited liability company, expulsion is possible by general assembly resolution on grounds set out in the company's articles, or by court decision for just cause. This is why exit mechanisms should be set out in the agreement from the start.
How can a shareholder who is not in management obtain information about the company?
At the general assembly, a shareholder can ask the board for information about the company's affairs and can inspect the financial statements and reports. If information is refused, they can apply to the court. If specific events need to be clarified, a special audit can also be requested.
Would you like to discuss this service? Schedule a meeting with us — the first meeting is free of charge.
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