What Are The Liabilities Of Shareholders And Manager For The Debts Of Limited Liability Company? 3 October 2016
I. Limited Liability of Shareholders
Pursuant to Article 573 Paragraph 2 of Turkish Commercial Code (“TCC”) numbered 6102, “Shareholders shall not be responsible for the debt of the company; they shall be responsible only for paying for the basic capital shares for which they subscribed and for fulfilling their obligations to make additional payments and for secondary performances set forth in the articles of association.” Therefore, liability of partners is limited with basic capital shares which they subscribed to pay; however, this responsibility is only accountable towards Limited Liability Company (“LLC”).
This article shall be regarded with the Article 602 of TCC titled “Responsibility of Shareholders” which states that, “the company shall be responsible for its debts and liabilities only with its assets.” According to this article, “the company” is responsible for its debts and liabilities only with its assets, therefore, creditors of the company cannot commence legal proceedings against shareholders[1].
II. Public Claims That Cannot Be Collected From LLC
a. Liability of Shareholders for Public Debts
Exception of the principle of shareholders’ nonliability for the debts of LLC is for the public debts of the company. This issue is regulated under The Law on Collection Procedure of Public Assets (“LCPA”) numbered 6183. Pursuant to Article 35 Paragraph 1 of LCPA, “The shareholders of limited liability companies are directly responsible for public claims which wholly or partially cannot be collected or apparently will not be collected from the assets of the company, in proportion to their capital share and shall be subject to legal proceedings in accordance with the provisions of this law.”
The conditions which shall be met in order to apply abovementioned provision are as follows:
i. The claim must be public claim.
ii. Public claim shall not be wholly or partially collected from LLC OR it must be apparent that public claim will not be collected from LLC.
After aforementioned requirements are fulfilled, public claim can be collected from shareholders. However, it is not possible to commence execution proceeding directly against shareholders regardng public claim. In the decision dated 31.3.2008 and numbered E. 2007/2139 K. 2008/4159, of 11th Civil Chamber of Supreme Court, emphasized that the main responsibility of shareholders is to pay their basic capital shares; and the primary responsible of public claims is LLC; therefore, public claim must be collected firstly from own resources of the company.
Liability of shareholders for public claims which cannot be collected from LLC is in proportion to their capital shares, according to the related provision.
Article 35/2 of LCPA regulates that when shareholder transfers his capital share, assignee and assignor shall be jointly and severally liable for public claim which occurred before the assignment of share. Pursuant to Paragraph 3 of same article; when shareholders are different at the date of debt’s occurrence and maturity, they shall be jointly and severally liable for payment of public claim in accordance with first paragraph of this article.
b. Liability of Manager for Public Debts
Legal representatives are also liable for public debts which cannot be collected from assets of LLC[2].
Pursuant to Article 10 of Tax Procedure Law numbered 213, “If legal entities … are taxpayer or tax responsible, their obligations shall be executed by their legal representatives … If legal representatives fail to fulfill these obligations, the amount of tax debt of a company which cannot be wholly or partially collected from the assets of the legal entity shall be collected from the personal assets of the legal representatives.”
In addition to the abovementioned provision, pursuant to Article 35 of LCPA, it is repeated that “Public claims which wholly or partially cannot be collected or apparently will not be collected from the assets of the legal entities … shall be collected from the personal assets of the legal representatives … in accordance with the provisions of this law.”
It must be concluded from the two provisions above that, manager who is legal representative of LLC is personally liable for public debts which cannot be completely or partially collected from the assets of company. The point that must be considered is that limited liability principle of shareholders is not applicable for manager because while shareholders are liable for such public claims in proportion to their capital shares, manager is responsible for the whole public debt.
[1] Ünal Tekinalp, Sermaye Ortaklıklarının Yeni Hukuku, Vedat Kitapçılık – İstanbul 2015, p. 515
[2] Prof. Dr. Hasan Pulaşlı, Şirketler Hukuku Genel Esaslar Güncelleştirilmiş ve Genişletilmiş 4. Baskı, Adalet Yayınevi – Ankara 2016, p. 814
Türkçe Versiyonu İçin
