Seizing the Shares of Limited or Joint-Stock Company Shareholders due to Their Personal Debts 13 December 2019
The shares at companies with share capital are considered as seizable since they have an economical value. Therefore, it is possible for the personal creditors of the shareholders to commence an execution proceeding through general tax lien or foreclosure.
Article 133 of Turkish Commercial Code (“TCC”), titled “the personal creditors of the shareholders”, which regulates the seizure of the shares of the shareholders at the company, is as follows;
(1) As long as a partnership company remains, a creditor can demand his right from the dividend of the shareholders in compliance with the company’s balance sheet, or from the liquidation profit if the company is liquidated. If the balance sheet of the company has not been prepared yet, the creditor can claim seizure on the dividend and liquidation profit of the shareholder which will be calculated as a result of the preparation of the balance sheet.
(2) In addition to claiming the debts from the dividends or liquidation profits of the shareholder, the creditors can claim liquidating or seizing the uncertificated or certificated securities of the shareholder, pursuant to articles on movables of Enforcement and Bankruptcy Law, dated 09.06.1932 and numbered 2004. The seizure is registered to the share ledger, upon request.
(3) Except these, the creditors have right to request the seizure of the shareholder’s receivables from the company.
4) The provisions above do not prevent creditors from claiming the shareholder’s receivables outside the company.
It is stated in the reason of the provision that the provision is a revised version of the related provision of the previous Turkish Commercial Code, numbered 6762, by considering the needs of the practice and the decision of Supreme Court.
The first paragraph is related with the partnership companies; however, the second paragraph does not only cover the joint-stock companies and shares, but also limited companies and uncertificated securities by stating the phrase of “companies with share capitals”. Therefore, there is no difference if the share is certified, uncertified, or if the share belongs to a joint-stock company or limited company, in case of claiming seizure or liquidation of the share. Additionally, article 133 of TCC aims to provide transparency by stating that the seizure could be registered to the share ledger in case of request.
Article 133 of TCC also clarifies which provisions shall be applied in case of seizure or liquidation, by stating that articles 88 and article 94 of Enforcement and Bankruptcy Law, numbered 2004. According to article 94 of Enforcement and Bankruptcy Law; “In case a right of usufruct, nonshared heritage or a share of a company is seized, the execution office shall notify the third parties. In this way, if debtor’s share in a specific immovable is seized, the execution officer shall notify the directorate of land registry to annotate it. In case share certificate is issued in joint-stock companies, the share of the debtor shall be seized through a notification which shall be sent by the execution office to the company. Registration of the seizure to the share ledger is an obligation, however, even though the registration is not issued, the date of the notification shall be considered as the date of the seizure. The seizure shall be notified to the registry of commerce to be registered. In this case, the seizure shall be considered as invalid if it violates the rights of the creditors. The sale of the seized shares is subject to the provisions on sale of movable goods. The execution office shall take measures for other movables to prevent from being transferred.”
Additionally, since the delivery of the share certificate does not provide the delivery of the shareholder right, seizing the share of the shareholder does not seize the partnership interest.
What are the conditions and the procedure of seizing the share in limited companies?
Shares in limited companies can be seized upon delivering the seizure notification. Additionally, it is also possible for a duly seizure that the executive officer could go to the headquarter of the company in person and record the seizure in the share ledger.
What are the conditions and the procedure of seizing the share in joint-stock companies?
As it is known that issuing share certificates is not an obligation for joint-stock companies. However, if share certificates are issued, they could be seized by the execution office pursuant to article 88 on seizing movables of Enforcement and Bankruptcy Law. The rights arising from having share could also be seized by delivering the company a seizure notification, in accordance with article 94 of Enforcement and Bankruptcy Law. Upon notifying the company with seizure notification, the seizure date is considered as the date of notification even though the seizure is not registered in the share ledger, although it is an obligation to register it in the share ledger. Additionally, a duly seizure of share could be commenced through notifying the seizure to the company by the execution officer who comes to the headquarter of the company, personally. In this case, the date of the notification is considered as the date of the seizure. After having a duly notification in compliance with article 94 of Enforcement and Bankruptcy Law, regarding the joint-stock companies’ shares which are considered as valuable papers, the shares are kept by the company on behalf of the debtor, if the company has not objected or if the objection of the company is rejected.[1]
Conclusion:
It is possible to seize the shares of the shareholders in limited or joint-stock companies, pursuant to Turkish Commercial Code, numbered 6102, and the provisions on sales of movables of Enforcement and Bankruptcy Law, numbered 2004, are applied. In this case, after the request of personal creditor of the shareholder regarding the seizure of shares at the company, execution office notifies the seizure statement to the company and the registry of commerce which the company is registered. Additionally, a duly seizure of share could be commenced through notifying the seizure to the company by the execution officer who comes to the headquarter of the company, personally.
[1] 12nd circuit of Supreme Court numbered E.2013/16016 K. 2013/23512 dated 24.6.2013
Türkçe Versiyonu İçin
