The Turkish Commercial Code No. 6102 (“TCC”) defines a limited liability company as “a type of partnership established by one or more real or legal persons under a trade name; its main capital is certain and consists of the sum of capital shares”. In this study, as GRC LEGAL, we will try to answer important questions that we frequently encounter in practice within the scope of the representation of the General Assembly by the manager body in limited liability companies.

What is the Director Body in Limited Liability Companies & Who is it composed of?

For the management and representation of the limited liability company, real or legal persons appointed among the partners or third parties are called managers. In limited liability companies, the manager is a mandatory organ like the general assembly, and the managers elected to the management and representation body of the company automatically acquire the title of organ.

The legislator has not restricted the number of directors. If more than one director is elected for the management and representation of the limited liability company, the board of directors shall be in question. If the number of directors is more than one, one of these directors is appointed as the chairman of the board of directors by the general assembly. Although it does not matter whether the chairman of the board of directors is a shareholder of the company or not, at least one shareholder must be present in the board of directors.[1]

In the event that a limited liability company is represented by a single manager, decisions will be taken by this person, and a specific meeting and decision quorum will not be required. This manager is also authorised to make all announcements and disclosures regarding the convening of the general assembly and the conduct of the general assembly meetings, unless the general assembly decides otherwise or there is a different provision in the company agreement. [2]

Finally, pursuant to the TCC, it is also possible for the director to be a legal entity. Pursuant to Article 623/2 of the TCC, “if one of the directors of the company is a legal entity, such person shall appoint a real person to fulfil this duty on behalf of the legal entity.” Thus, although the title of director is held by the legal entity, the duty of director is fulfilled by a real person representative selected by the legal entity.

What are the Conditions for Limiting the Authorities of the Directors?

The directors who have powers other than the powers that the general assembly cannot delegate[3] are called unlimited authorised directors. However, the general assembly may limit the authority to represent the manager or managers. The limitation of the representation authority of the directors can only be realised by announcing an internal directive.

The general assembly shall regulate the management of the company with the internal directive to be prepared; it shall define the duties required for the management, show their locations, determine who is subordinate to whom and who is obliged to provide information, and also inform the shareholders and creditors (who convincingly demonstrate their interests worthy of protection) in writing about this internal directive.[4] Thus, the general assembly draws the limits of the authority of the managers by announcing an internal directive.

Liability of the Managing Body in Limited Liability Companies
Tort Liability of Managers in Limited Liability Companies

A person who causes damage to another person by an unlawful act and negligently is obliged to compensate for this damage. In order for tort liability to be in question; there must be a causal link between the act, illegality, damage, damage and illegal act and fault.[5]

The company is liable for the torts committed by the directors while fulfilling their duties related to the company (Art. 632 TCC). Article 50/2 of the Turkish Civil Code (“TCC”), which holds the legal entity liable for the wrongful acts of its organ (and organ members), and Article 632 of the TCC, which repeats this provision for limited liability companies, recognise that the legal entity, which is liable for the wrongful acts of its organs, may have recourse to the defective organ members. This is because the organ is personally liable together with the legal entity for their wrongful acts (TMK 50/3).[6]

Special and General Liability of Managers in Limited Liability Companies

Managers who cause damages to the legal entity of a limited liability company through their negligent behaviours are subject to legal liability. Managers of limited liability companies are liable for the damages they cause to the company, shareholders and company creditors when they breach their obligations arising from the law and the company agreement through their negligent behaviour (TCC Art. 553/1). Within the scope of this general liability, the right to claim and sue arises within the legal entity, shareholders and creditors of the company. The directors, on the other hand, shall be released from liability to the extent that they prove that they have not acted negligently.

Except for the general liability mentioned above,

Documents and declarations are contrary to the law,
Misrepresentations about capital and recognition of inability to pay
Corruption in valuation
Collecting money from the public

Pursuant to Art. 449 et seq. of the TCC, limited liability company managers may also be penalised with judicial fine or imprisonment under Art. 562 of the TCC.

[1] Bilgili, Fatih/Demirkapı, Ertan, Commercial Law Information, Dora Publishing, 9th Edition, 2016, p.292. Seçil Şahin, Manager in Limited Liability Companies, 2017, p.6

[2] Sumer, p.273, Seçil Şahin, Manager in Limited Liability Companies. 2017, s.5

[3] Approval of the Group’s year-end financial statements and annual activity report, Appointment and dismissal of auditors, Appointment and dismissal of directors, Determination of directors’ remuneration and release of directors, Approval of transfers of capital shares, Approval of the year-end financial statements and annual activity report, Decision on dividend, Determination of profit shares, Requesting the court to remove a shareholder from the company, Authorising the director to acquire the company’s own shares or approving such an acquisition, Amending the company’s articles of association, Dissolution of the company, Deciding on matters that the general assembly is authorised by law or the company’s articles of association or that the directors submit to the general assembly.


[5] Nomer, Haluk N. Obligations Law General Provisions, Beta Publishing House, 14th Edition, Istanbul, 2015, p.137-138

[6] Y4. HD., E. 2015/16222 K. 2017/7717 T. 29.11.2017