The Single-Member Board of Directors According to the New Turkish Commercial Code

The New Turkish Commercial Code was adopted on 13 January 2011 and entered into force with the exception of certain provisions on 1 July 2012. The New Turkish Commercial Code introduced many important innovations and changes, of which, those related to the law of corporations stand out. Especially, many obstacles encountered by foreign investors when they attempt to establish corporations in Turkey were eliminated by the New Turkish Commercial Code. Among the changes in question are many practical and functional innovations, such as the acceptance of independent auditing upon the abolishment of the board of auditors, which was previously a department of joint-stock companies, and the obligation for companies to set up a company web-site. The New Turkish Commercial Code has enabled the joint-stock companies to comprise one shareholder only, which, earlier, could have been founded by at least five shareholders. Another complementary regulation was also made in relation to the structure of the board of directors in joint-stock companies: The board of directors, previously required to comprise at least three members, could henceforth be formed by a single member. This situation is the result of and the obligation from regulations in Turkish Law decreeing the possibility to establish joint-stock companies by a single shareholder. However, the field of application for the single-member board of directors adopted to provide coherence with the single-shareholder joint-stock company is, in fact, not limited to only such companies; a single-member board of director can also be preferred in joint-stock companies with multiple shareholders. This memorandum was prepared to indicate the conditions and principles for the formation of the single-member board of directors in joint-stock companies. Some of the requirements for the membership in a multiple-member board of directors are not stipulated for single-member board of directors in Turkish law. In addition, principles for the representation, meetings, and decision-making of the single-member board of directors are different from those of multi-member board of directors in various cases. For this reason, this work aims to discuss the single-member board of directors in the New Turkish Commercial Code in general terms, insomuch as it differs from the multiple-member board of directors.