Appointment of Authorized Signatories with Limited Representation by Board of Directors relying on the Internal Directive of the Company 26 March 2018
Unless otherwise stipulated in the articles of association or unless the Board of Directors (“BoD”) comprises one member, representational authority shall be exercised by the BoD by affixing two signatures in accordance with Article 370 of the Turkish Commercial Code numbered 6102 (“TCC”). On the other hand; with the following regulation, which has been added to the Article 371 of the TCC as its 7th paragraph in 2014, the companies become entitled to appoint authorized commercial agent or another merchant assistants with limited representation by relying on an internal directive and they could register the same to trade registry.
““In addition to representatives set out above, the Board of Directors may appoint board members not having the authority to represent or persons who have a contract of employment with the company as a commercial agent with limited authority or as other merchant assistant. Duties and powers of those so appointed will be expressly determined in the internal directive to be drafted in accordance with Article 367. In this case, registration and announcement of the internal directive will be obligatory. Commercial agents and other assistants to merchants may not be appointed by an internal directive. Commercial agents or other assistants to merchants authorized in accordance with this paragraph will be registered with and announced by the commercial registry. The Board of Directors will be jointly and severally responsible for all damages to be caused by such persons to the company and third parties.”
Powers and the scope of these powers of commercial agent and other merchant assistants have been were drawn by the Turkish Code of Obligations (“TCO”) numbered 6098. Under TCO, there was no obligation to register any issue related to the powers of commercial agent or other merchant assistants. However, in practice, companies were registering the limitations on transaction amount to trade registry. Nonetheless, since there was not such an obligation foreseen within the scope of TCO, these limitations had no effect for third person with good faith and the company was bound with the related transaction unless the mention third person was aware of the lack of power of the concerned representative.
This amendment in TCC induced many discussions and uncertainty on different aspects including the possible consequences of the registration of these limitations on the powers of merchant assistants appointed in accordance with the Article 371/7 of TCC for third persons and the liability of these representatives with limited power. For instance; it is contradictive that whether joint liability principle the liability of board of directors from the acts of signing authorizes with limited representation falls within either the differentiated joint liability of TCC or whole joint liability under TCO.
With this regard, since there has been no explanatory decision of Supreme Court on this issue yet, content and the application of this new paragraph and its consequences in business life stay uncertain. Therefore the members of the Board of Directors desiring to appoint such a merchant assistant with limited powers should receive legal consultancy from professionals who are expert in the area before making such an appointment in order to be aware of the possible consequences that might arise from the transaction these people will make.
Türkçe Versiyonu İçin
http://www.kasaroglu.av.tr/tr/sinirli-imza-yetkilileri
