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Transfer Of The Management And Authority To Represent And Bind Under The Joint Stock And Limited Lia
The joint stock companies are managed and represented by the board of directors in accordance with the Article 365 of the Turkish Commercial Code numbered 6102 (“TCC”). However, the board of directors does not have to exercise its management right and authority to represent and bind personally. Pursuant to the Article 367 of the TCC, provided that there is a provision in the articles of association, the board of directors can be authorized to delegate management partially or fully to one or more board members or to a third party in accordance with an internal directive to be issued. In this context, as long as there is no transfer of the authority by the board of directors, the right of management the company shall belong to all members of the board of directors.[1]
Executive member defined as the member to whom the duties and authorities of the board of directors are granted. However, delegation of duties and authorities by the board of directors to the executive members or third parties with the internal directive issued; shall not have the meaning that the non-delegable duties and authorities of the board of directors are able to be granted. In other words, the duties and authorities may be delegated to the exclusive director/member and / or another third party other than the duties and authorities that the board of directors have to exercise exclusively.
However; within the scope of the authorization of the board of directors to delegate rights of management and representation in accordance with the articles of association, at least one member of the board of directors must have the right to represent and bind, in case that this authority is granted to natural or legal persons other than the members of the board of directors.[2]
In summary, it should be noted that; in the joint stock companies, the delegation of management and representation authority of the board of directors has been made possible, provided that the delegation of management and representation authority is clearly stipulated in the articles of association as a prerequisite. In this regard, to stipulate a provision in the articles of association regarding the management and representation of the company, would be initiated without the need for an amendment on the articles of association when the delegation of management and representation authority is carried out as a requirement of the corporate governance, the drawing up processes of internal directive.
The management chart of the company, management of company in terms of technical, commercial and legal perspective and the managerial members to whom managerial authority is delegated, are specified and regulated with the internal directive to be issued by the board of directors. It also defines the duties required for management, indicates their positions, and particularly specifies who is subordinated to whom and who is obliged to provide information. In this context, it may be possible to issue a separate authority for each authority group by issuing authority groups.
II. LIABILITY
Pursuant to TCC 553/II, the bodies or persons who have delegated an authority arising from the law or the articles of association to someone else, shall not be responsible for the actions and decisions of these persons, except for the fact that they do not take reasonable care in the selection of the persons to whom these duties and authorities have been delegated. In this context, other members of the board of directors shall not be responsible for the acts and decisions of the managing director and / or third parties to whom delegation of management and representation has been delegated, provided that they do not breach the surveillance obligation.
However, it is important to note that even if the delegation of authority is made under the articles of association, the responsibilities of the members of the board of directors will continue in terms of their non-delegable duties and authorities as well as the duties and authorities that they have to exercise exclusively; and thus it would be unimportant whether the surveillance obligation is breached or not.
III. REGISTRATION AND ANNOUNCEMENT
In joint stock companies, for which delegation of limited authority regarding the management and representation of the company is stipulated in the articles of association; an internal directive to be issued in written form can be registered and announced by following the procedures and principles stated below.
- An internal directive issued written with a date and number for the delegation of the authority of the board of directors has to be prepared by the board of directors and has to be approved by the decision of the board of directors.
- The decision of the board of directors regarding the persons to be delegated with the limited authorities determined by this internal directive shall be taken.
- The registration and announcement procedures shall be completed by finalizing the notarized copies of the decisions mentioned above.
- Following the completion of registration and announcement procedures, the signature circular has to be issued and notarized in parallel with the resolution on representation and binding.