INVALIDITY OF GENERAL MEETING RESOLUTIONS OF JOINT STOCK COMPANIES
In joint stock companies, the general meeting (“GM”) is the fundamental organ of will where shareholders express their will and take decisions regarding the company’s business and transactions. GM resolutions are considered legal acts as they constitute collective expressions of will that produce legal consequences. For these resolutions to be valid under the law, they must comply with the rules set out in the law and the articles of association regarding both their formation and content. In particular, compliance with the quorum requirements for meetings and resolutions, and the fact that the resolutions do not contravene the law, the articles of association, or the principle of good faith, constitute the fundamental conditions for validity.
The conditions for the existence and validity of GK decisions are regulated in detail by various provisions of the law. If a decision is inconsistent with these provisions or with the provisions of the articles of association of a public limited company regulated within this framework in terms of its formation or content, the decision is considered ‘defective’ in legal terms. Such defects are subject to different sanctions depending on the nature of the violated legal rule. Indeed, in doctrine and practice, the cases of invalidity relating to GK decisions are examined under four headings: non-existence, nullity, suspended invalidity and cancellability.
- What is Non-Existence?
In public limited companies, nullity refers to the absence of the constituent elements necessary for a general meeting decision to acquire legal existence. In this case, since there is no legally valid decision, the transaction in question is deemed never to have come into existence and does not give rise to any rights or obligations. In this respect, nullity constitutes the most severe sanction among the types of invalidity. [1]
For a general meeting resolution to be formed, two fundamental elements must be present in accordance with mandatory regulations: the first is that the general meeting must be conducted in accordance with the rules of procedure, and the second is that a resolution must be passed at this meeting. If either of these elements is missing, it cannot be said that a legally valid decision has been made. Therefore, if a meeting is presented as having taken place when it did not, or if a decision is presented as having been made without any voting process, the transaction is invalidated.
Examples of situations that could lead to nullity in practice include: the meeting not being convened by the authorised body or person, a meeting being held without notice except in the exceptional cases provided for in Article 416 of Turkish Commercial Code No. 6102, a decision being accepted as having been taken without a vote, or a decision being presented as having been taken without a general meeting being held. Furthermore, decisions taken in the absence of a representative of the Ministry at meetings where their presence is required by law are also deemed null and void. On the other hand, the prevailing view in doctrine and the practice of the Court of Cassation is that decisions taken when the quorum for the meeting and decision-making is not met should also be considered null and void. [2]
- What is Nullity?
Nullity occurs when a GK decision has its constituent elements (such as a meeting and a decision) but its content or subject matter is contrary to mandatory rules of law, public order, morality, or personal rights. A null decision is considered ‘stillborn’; that is, it has no legal effect from the moment it is issued. [3]
Indeed, Article 447 of the TCC lists the cases of nullity with the phrase ‘in particular’. The legislator’s choice of this phrase indicates that the cases specified in the article do not constitute a limited list, but rather provide illustrative examples of situations where nullity may apply. Article 447 of the TCC lists the following cases of nullity:
a) Resolutions that limit or eliminate the shareholder’s rights to participate in the general meeting, minimum voting rights, litigation, and other rights that are inalienable by law:
Certain rights recognised by law are inalienable, not only for the benefit of the shareholder but also to protect the fundamental structure of the public limited company. In this context, powers such as the right to attend the general meeting, be represented, the minimum voting right, and the right to bring legal action arising from the law cannot be removed or restricted, even with the consent of the shareholder. In this context, general meeting decisions that prevent shareholders from participating in the general meeting or subject their participation to additional conditions, eliminate the minimum voting right, or limit the use of the legal rights to bring legal action as provided for by law are considered null and void. In particular, regulations that eliminate legal avenues of recourse relating to structural changes, group company relationships, liability, and dissolution lawsuits are evaluated within this scope. [4]
b) Resolutions that restrict the shareholder’s rights to obtain information, examine and audit beyond the extent permitted by law:
The rights of shareholders in joint stock companies to obtain information, examine and audit are regulated to ensure the transparency of the company and to enable shareholders to make informed decisions, and are among the inalienable rights. Therefore, the removal or restriction of these rights by a general assembly decision beyond the limits set out in the law is subject to nullity sanctions in accordance with Article 447/1-b of the TCC. In this context, decisions such as completely abolishing the right to obtain information and examine, unlawfully shortening the period for examining financial statements, restricting the right to request a special auditor, or making the exercise of these rights subject to conditions not provided for by law are considered null and void. Similarly, decisions restricting the examination rights granted to shareholders in structural transactions such as mergers, divisions, and changes in type, or decisions removing the authority to dismiss the board of directors, are also subject to the same sanction.[5]
c) Decisions that disrupt the fundamental structure of the joint-stock company or violate the provisions on the protection of capital:
The corporate structure of a public limited company is based on fundamental principles such as the principle of anonymity, the division of capital into shares, each share creating an independent shareholder position, the limited liability of shareholders solely to the company, the free transfer of shares, an independent audit mechanism, functional separation between organs, the non-transferable powers of organs, and the accountability of management. General assembly resolutions that violate these structural principles are subject to nullity sanctions to the extent that they undermine the systematics and balance of the joint-stock company. Indeed, such resolutions are deemed absolutely void, as they not only constitute a violation of the law but also have the potential to eliminate the corporate framework that constitutes the very reason for the company’s existence.
Action for Determination: An action for determination of nullity is not expressly and specifically regulated in the TCC. However, in doctrine, it is accepted that nullity and nullity cases are different in terms of their causes but the same in terms of their legal consequences; therefore, it is argued that the regime of actions relating to the assertion of nullity can also be applied by analogy to actions brought for the purpose of determining nullity.
Since a GK decision that is null and void is deemed never to have existed from the outset in terms of the legal order, it is not necessary to file an objection or bring an action for annulment in order to render the decision void. This is because there is no decision that has acquired legal existence. However, in order to eliminate any doubts that may arise in practice and to ensure legal certainty, it is possible to file a lawsuit to determine nullity if there is a legal interest.
This lawsuit constitutes a determination lawsuit aimed at establishing that the GK decision in question is null and void. The ruling issued by the court is not constitutive but explanatory in nature and reveals the legal situation of non-existence that already exists[7].
- What is Suspended Invalidity?
Suspended invalidity refers to situations where a general assembly decision is legally established and valid but is subject to the fulfilment of additional conditions stipulated by law in order to produce its effects and consequences. In this context, the entry into force of certain resolutions is contingent upon the consent of specific shareholders, the approval of a separate committee, or the completion of supplementary procedures such as registration in the commercial register. In practice, the most typical manifestation of suspended invalidity is the requirement for resolutions adopted by the general meeting to be subject to the approval of the committee of privileged shareholders in the cases provided for by law. Unless this approval is obtained, the decision remains suspended; that is, it does not produce legal consequences.[8]
- What is Revocability?
In public limited companies, the revocability of GK decisions means that a decision can be annulled through judicial proceedings if it contradicts the law, the articles of association or the principle of good faith, even if its constituent elements are complete. These decisions continue to produce results as valid decisions in the legal world until they are annulled by the court; however, once the annulment decision becomes final, the decision is retroactively annulled from the date it was taken. [9]
Reasons for Annulment:
Contravention of the Law: The concept of ‘contravention of the law’ set out in Article 445 of the TCC is interpreted broadly to cover all written norms in the legal system, not limited to the provisions of the TCC. In this context, other laws, the company’s articles of association, and regulatory acts such as statutes, regulations, decrees, and circulars are also considered within the scope of this concept. Therefore, a request for the annulment of a general meeting resolution may be based not only on an allegation of non-compliance with the provisions of the TCC, but also on non-compliance with all normative regulations, including the Constitution, falling within the scope of private and public law.
Contradiction with the Articles of Association: The resolution does not comply with the provisions of the articles of association, which constitute the company’s constitution. For example, regarding the term of office of board members, Article 362 of the TCC stipulates that members may be elected for a maximum term of three years and that the same person may be re-elected unless otherwise provided in the articles of association. This provision clearly states that the articles of association may impose restrictions or prohibitions on re-election. In this context, even if the articles of association contain a provision stating that the same person cannot be re-elected as a member of the board of directors, a general assembly decision to re-elect that person constitutes a violation of the articles of association. This violation is assessed under Article 445 of the TCC and leads to the annulment of the relevant general assembly decision. [11]
Contravention of the Principle of Good Faith: In terms of the grounds for annulment of general assembly decisions, contraventions of the law or the articles of association have relatively clearer boundaries, and the identification and proof of such contraventions are also relatively easier. In contrast, it is difficult to speak of the same clarity and predictability in assessments made under the principles of good faith and the prohibition of abuse of rights. The criterion of violation of the principle of good faith set out in Article 445 of the TCC is essentially a special reflection of the principle of good faith regulated in Article 2 of the Turkish Civil Code No. 4721 in company law. However, in the context of the annulment of general assembly decisions of joint-stock companies, it is not possible to say that a fully established and uniform set of criteria has been put forward in the doctrine regarding the objective criteria for determining cases of breach of the principle of good faith or abuse of rights.
Majority shareholders in public limited companies hold a decisive position both on the board of directors and in general meeting resolutions. If these powers are exercised in accordance with the company’s interests and in a manner appropriate to its function, there can be no question of illegality. However, if the majority uses these powers to infringe upon the rights of minority shareholders, a situation arises that requires intervention under company law. In this context, it is not sufficient for a general meeting resolution to be formally compliant with the law and the articles of association; the resolution must also be consistent with the principle of good faith. Otherwise, there is an abuse of majority power, which leads to the annulment of the relevant resolution. [13]
Violations of the principle of good faith can manifest themselves in various concrete forms in practice. In this context; the election of a person to the board of directors despite age, health or competence deficiencies that effectively prevent them from being a member;
the discharge of board members who are at fault for the company’s bankruptcy; the discharge of some board members acting in concert while others are not; and the refusal to discharge board members without just cause, despite the balance sheet and activity reports being unproblematic, may constitute a breach of the principle of good faith. Similarly, decisions to relocate the company’s headquarters from the place of business to another location, solely for the purpose of hindering minority shareholders’ access to and control over the company, in a manner that cannot be justified by the company’s interests, are also incompatible with the principle of good faith. [14]
In this context, the determination of a breach of the principle of good faith is not based solely on a subjective assessment but on certain objective criteria. In practice, particular consideration is given to whether the decision serves the company’s genuine interests, whether there is an objective and reasonable commercial justification for the decision, whether majority power has been used to the detriment of minority shareholders, and whether the economic consequences of the decision upset the balance of interests between the company and its shareholders. Furthermore, in GK decisions concerning discharge, relocation of the company’s headquarters, termination of the company, or the exercise of shareholder rights, the following aspects are also evaluated together: whether majority power was used for purposes other than its intended purpose, whether the decision is objectively based on the company’s interests, and whether it results in the exclusion of minority shareholders.
Examples of Rescindable Decisions:
Capital Increase Decisions: Capital increase decisions taken solely to reduce the share ratio of minority shareholders and exclude them from the company, even though the company has no need for such an increase (dilution), may be rescinded due to violation of the principle of good faith. [15] Increasing capital when the company has sufficient fixed assets and capital structure and does not need to make new investments may also be considered contrary to the principle of good faith.
In its decision dated 30 September 2020, No. 2019/5331 E., 2020/3709 K., the 11th Civil Chamber of the Court of Cassation examined whether the general assembly decision violated the principle of good faith, considering the specific circumstances of the case. The decision took into account the ongoing divorce proceedings between the plaintiff and the other partner, the fact that the company had not distributed dividends for a long time, the plaintiff’s filing of a lawsuit to collect dividends from previous periods, and the absence of an objective commercial reason requiring the company to increase its capital using past profits. In light of all these facts, the Court of Cassation concluded that the capital increase decision in question was intended to cause harm to the plaintiff and was therefore incompatible with the principle of good faith.
However, it would be inaccurate to conclude that every capital increase decision is automatically voidable. Indeed, as emphasised in the decision of the 11th Civil Chamber of the Court of Cassation dated 19 April 2018, No. 2016/9546E., 2018/2903 K., shareholders are generally required to accept such decisions even if they cannot participate in capital increases. This is because the current amount of share capital does not constitute an acquired right for shareholders. Therefore, objecting to a capital increase on the grounds that it will reduce share ratios or economic value does not, in itself, constitute grounds for annulment. Conversely, the situation differs if the capital increase is carried out with the intention of causing harm to specific shareholders in a manner that cannot be justified by the company’s interests. Such use is considered an abuse of majority power and constitutes a breach of the principle of good faith. In such a case, the annulment of the relevant general meeting resolution may be considered.
Requirement to Use Internal Resources: Pursuant to Article 462 of the TCC, if the balance sheet contains funds (internal resources) that are permitted by law to be added to the capital, it is prohibited to increase the capital through a cash capital commitment from outside without converting these funds into capital. A capital increase decision taken without complying with this legal requirement constitutes a violation of the law and is subject to the penalty of annulment under Article 445 of the TCC. [16]
Relocation of the Company’s Headquarters: If the company’s entire operations are located in one city (e.g., Istanbul), a decision to relocate the headquarters to a very distant location (e.g., Kahramanmaraş) without a valid reason, with the aim of making it difficult for shareholders to participate in the general meeting, is grounds for annulment. [17]
Discharge Resolutions: The non-discharge of board members by the GM without just cause, despite their having performed their duties fully, or the discharge of some members while a member in a similar situation is arbitrarily not discharged, may be subject to annulment under the principle of good faith. [18]
Violation of the Right to Information: Failure to answer questions asked by shareholders at the meeting or providing incomplete information may lead to the cancellation of the decision if this situation has affected the shareholder’s voting intention (if there is a causal link). [19]
Violation of the Rule of Adherence to the Agenda: Discussing and deciding on a matter not on the GK agenda (except for legal exceptions) is a defect that can be annulled.[20]
Profit Distribution: Decisions to distribute dividends to some shareholders while excluding others, contrary to the principle of equal treatment, or to withhold distribution without just cause, may be subject to annulment proceedings.[21]
Annulment Proceedings:
Must be initiated within three months of the date the decision was taken, at the Commercial Court of First Instance in the location of the company’s headquarters. This period is subject to a statute of limitations and is taken into account ex officio by the court.[22] According to TTK 446:
- Those who are present at the meeting, vote against the decision, and have their opposition recorded in the minutes,
- Whether present at the meeting or not, whether they voted against or not; shareholders who claim that the notice was not given in accordance with the procedure, that the agenda was not properly announced, that persons or representatives without the authority to participate in the GK attended the meeting and voted, that permission to participate in the GK and vote was unjustly granted, and that the aforementioned irregularities were effective in the adoption of the general assembly decision,
- The board of directors,
- If the implementation of the decisions would result in personal liability, each member of the board of directors may file an action for annulment.
Filing an action for annulment does not automatically suspend the implementation of the decision. However, pursuant to Article 449 of the Turkish Commercial Code, the court may, after obtaining the opinion of the board of directors, decide to suspend the implementation of the decision in order to prevent irreparable damage.
[1] Mehmet Toprak, ‘Circumstances Requiring the Nullification of General Assembly Decisions of Joint Stock Companies’, Law Faculty Journal, Volume 11, Issue 2, December 2025, pp. 191-213.
[2] Mehmet Bahtiyar Company Law, 16th Edition, Beta Basım Yayım Dağıtım A.Ş., Istanbul, 2022.
[3] Hasan Pulaşlı, ‘The Invalidity and Penalties of General Assembly Resolutions of Joint Stock Companies,’ Istanbul University Faculty of Law Journal (İÜHFM), Vol. LXXI, No. 2, 2013,
[4] Mehmet Bahtiyar Partnership Law, 16th Edition, Beta Basım Yayım Dağıtım A.Ş., Istanbul, 2022.
[5] Fırat Karadoğan, Cases of Invalidity of General Assembly Resolutions in Joint Stock Companies, Foreign Trade Institute Working Paper Series, Discussion Papers, 2016.
[6] Mehmet Bahtiyar Partnership Law, 16th Edition, Beta Basım Yayım Dağıtım A.Ş., Istanbul, 2022.
[7] Merve Çam, Nullity of General Assembly Resolutions in Joint Stock Companies According to Turkish Commercial Code No. 6102, Master’s Thesis, Istanbul Commerce University Institute of Social Sciences, Department of Private Law, Istanbul, 2022.
[8] Umur Karakaya, Annulment of General Assembly Resolutions of Joint Stock Companies Due to Violation of the Rules of Good Faith, Doctoral Thesis, Istanbul Aydın University Graduate School of Education, Department of Private Law, July 2024.
[9] Fırat Karadoğan, Cases of Invalidity of General Assembly Resolutions in Joint Stock Companies, Institute of Foreign Trade Working Paper Series, Discussion Papers, 2016.
[10] Umur Karakaya, Annulment of General Assembly Resolutions of Joint Stock Companies Due to Violation of the Rules of Good Faith, Doctoral Thesis, Istanbul Aydın University Graduate School of Education, Department of Private Law, July 2024.
[11] Rıdvan Alkan, Annulment of General Assembly Resolutions in Joint Stock Companies within the Context of the Turkish Commercial Code, Master’s Thesis, Doğuş University Graduate School of Education, Department of Private Law, Istanbul 2021.
[12] Umur Karakaya, Annulment of General Assembly Resolutions of Joint Stock Companies Due to Violation of the Rules of Good Faith, Doctoral Thesis, Istanbul Aydin University Graduate School of Education, Department of Private Law, July 2024.
[13] Rıdvan Alkan, Annulment of General Assembly Resolutions in Joint Stock Companies in the Context of the Turkish Commercial Code, Master’s Thesis, Doğuş University Graduate School of Education, Department of Private Law, Istanbul 2021.
[14] İsmail Kırca, Nullity of General Assembly Resolutions of Joint Stock Companies, On İki Levha Yayıncılık, 2022.
[15] Rıdvan Alkan, Cancellation of General Assembly Resolutions in Joint Stock Companies within the Context of the Turkish Commercial Code, Master’s Thesis, Doğuş University Graduate School of Education, Department of Private Law, Istanbul 2021.
[16] Umur Karakaya, Annulment of General Assembly Resolutions of Joint Stock Companies Due to Violation of Good Faith Rules, Doctoral Thesis, Istanbul Aydın University Graduate School of Education, Department of Private Law, July 2024.
[17] Umur Karakaya, Annulment of General Assembly Resolutions of Joint Stock Companies Due to Violation of the Rules of Good Faith, Doctoral Thesis, Istanbul Aydin University Graduate School of Education, Department of Private Law, July 2024.
[18] Supreme Court of Appeals 11th Civil Chamber Decision No. 2016/5229, dated 09.05.2016, Case No. 2015/10277
…Although the other board members were discharged at the general meeting in question, the plaintiff was not discharged . No specific reasons were given for the decision not to discharge him.
The court partially accepted the case on the grounds that the general assembly’s decision not to discharge the plaintiff was contrary to the rules of good faith.
[19] Supreme Court of Appeals, 11th Civil Chamber, 19 July 2007, 2006/2171 E., 2007/10775 K. Decision
… If a wrong decision was made at the general assembly meeting due to a violation of the partner’s right to information, the decision may be annulled on the grounds of this violation of the right to information, among other reasons…
[20] Rıdvan Alkan, Annulment of General Assembly Decisions in Joint Stock Companies in the Context of the Turkish Commercial Code, Master’s Thesis, Doğuş University Graduate School of Education, Department of Private Law, Istanbul 2021.
[21] Umur Karakaya, Annulment of General Assembly Decisions of Joint Stock Companies Due to Violation of the Rules of Good Faith, Doctoral Thesis, Istanbul Aydın University Graduate School of Education, Department of Private Law, July 2024.
[22] Rıdvan Alkan, The Annulment of General Assembly Resolutions in Joint Stock Companies in the Context of the Turkish Commercial Code, Master’s Thesis, Doğuş University Graduate School of Education, Department of Private Law, Istanbul 2021.
