LIABILITY OF JOINT STOCK COMPANY BOARD MEMBERS FOR DEFECTS ARISING FROM THE TURKISH COMMERCIAL CODE

Abstract

According to Article 359 of the Turkish Commercial Code, the board of directors of a joint-stock company consists of one or more real or legal persons appointed in the articles of association or elected by the general assembly of the joint-stock company. Except for the exceptions provided for by the legal regulation, the joint-stock company is managed and represented by the company's board of directors. The management and representation authority undoubtedly also brings responsibility. According to Article 369 of the TCC, the members of the board of directors of a joint-stock company are responsible for performing their duties with the care of a prudent manager and for protecting the interests of the company by complying with the rules of honesty. As a result of this responsibility, the members of the board of directors of a joint-stock company will be liable for the damages they cause, primarily to the company, its shareholders and the company's creditors, if they violate their responsibilities arising from the law and the articles of association through their faulty actions.

When the relevant provisions of the Turkish Commercial Code No. 6102 are examined, it is seen that the liability of the board members of joint-stock companies is, as a rule, liability based on fault, and strict liability is an exception. For managers, including board members, strict liability is foreseen in individual provisions of the Law. The liability foreseen for the actions of board members for “Unlawful Documents and Declarations” regulated in Article 549 of the TCC, “False Declarations Regarding Capital” regulated in Article 550/1 of the TCC, and “Collecting Money from the Public” regulated in Article 552 of the TCC is strict liability.