Newsletter on the Extension of the Period Regulated Under the Provisional Article 13 of the Turkish Commercial Code Numbered 6102
In order to reduce the negative impacts of Covid-19 pandemic on social and economic life in our country, a provisional article has been added to the Turkish Commercial Code (“TCC”) on 17.04.2020 where some restrictions on the distribution of dividends, which was aimed to be in force until 30.09.2020, were adopted in this respect.
Under the Provisional Article 13 of the Turkish Commercial Code, it was regulated that the equity companies;
- may only distribute 25% of their net profits generated in 2019 financial year. (this restriction also contains the situtations that the general assembly resolutions regarding the payment of profits related to financial year 2019 had been adopted but no payment was made to the shareholder(s) or a partial payment was made)
- shall not distribute dividends from the previous years’ profits or free reserve funds, and
- the board/managing body shall not be granted authority by the general assembly for the distribution of the advance dividends
until 30 September 2020.
The duration of the above-mentioned restrictions on the distribution of dividends is extended for 3 months with the Presidential Decision published in the Official Gazette on 18.09.2020. In this respect, restrictions regulated under the Provisional Article 13 of Turkish Commercial Code will be effective until the date of 30.12.2020.