The Law numbered 7263 on the Amendment of Technology Development Zones Law and Certain Other Laws (“Law No. 7263”) has been published in the Official Gazette dated 3 February 2021 and numbered 31384. 

The Law No. 7263 has introduced substantial amendments regarding the signature declarations to be submitted to the trade registry directorates that are regulated under the Turkish Commercial Code numbered 6102 (“Turkish Commercial Code”) and the signature circulars used in practice. Additionally, new provisions have been adopted regarding the commercial enterprise pledge regulated under the Law numbered 6750 on Movable Pledge in Commercial Transactions ("LMPCT"). 

Please find below the essentials of the relevant amendments introduced by the Law No. 7263, which entered into force on the date of its publication. 

Amendment Regarding Signature Declarations Regulated Under Article 40 of the Turkish Commercial Code

As per the Law No. 7263, the second paragraph of article 40 of the Turkish Commercial Code has been amended and the obligation of real person tradesmen and those who are authorized to sign on behalf of legal person tradesmen to submit their signature declarations before the trade registry directorate has been removed provided that certain conditions are met.

Pursuant to this amendment, the signature data of real person tradesmen and those who are authorized to sign on behalf of legal person tradesmen will be obtained electronically by the trade registry directorates, provided that the signatures of these individuals have already been recorded in the databases of public institutions and organizations, and recorded directly in the trade registry file kept in the central common database. 

Based on this regulation, it would be possible to share the signature data that is collected by relevant public institutions and organizations while issuing new identity cards, driver’s licenses, passports etc. through electronic platforms with the trade registry directorates. The main points of this amendment, as explained in the official commentary of this article, are to reduce the document burden and cost in registration transactions as well as to manage the trade registry procedures entirely through electronic platform.

In addition to the above, no amendments have been introduced regarding the procedures on submitting signature declarations of foreign real persons whose signature data are not recorded in the said database. Unless a new regulation is adopted, the following requirements will still be applicable: (i) obtaining notary and apostille certification for the signature declarations issued abroad by foreign real persons pursuant to article 13 paragraph 6 of the Communiqué on Signing Articles of Association Before Trade Registry Directorates; and (ii) visiting the related trade registry directorate to submit his/her signature declaration in the event that the said person is in Turkey.

The Law No. 7263 stipulates that the procedures and principles regarding (i) the submission of the authorized representatives’ signature declarations to the trade registry in case public institutions and organizations do not have these individuals’ signature data in their records and (ii) the implementation of this new regulation will be clarified with the communiqués to be issued by the Ministry of Trade. 

Amendment Regarding "Signature Circulars" Application

The Law No. 7263 has introduced a new provision to article 373 of the Turkish Commercial Code stipulated under the section as to the representation authority of the board of directors in joint stock companies. This regulation will also be applicable to the limited liability companies pursuant to paragraph 1 of article 629 of the Turkish Commercial Code. 

In accordance with the newly adopted provision, the records registered by the trade registry directorate will be taken as basis for confirming the authorized representatives and their representation powers. The documents issued by the trade registry directorates and Turkish Trade Registry Gazette announcements will suffice to prove the authorized representatives and their representation powers. Public institutions and organizations will not be allowed to request to be provided with any additional documents in this regard.

As explained in the official commentary, this article aims to cease the use of "signature circulars" which are frequently used in the practice. As it is known, signature circular is a document that is used to satisfy a practical need with no legal grounds but requested by public institutions and private organizations to determine the authorized representatives, the scope of their representation power and the signature specimens of such representatives.

Authorized representatives and their representation powers stated in the signature circular reflect the representation structure on the day that the signature circular is issued. Therefore, while performing authority check through the signature circular, the correctness and validity of the authorities set out in the signature circular should be confirmed through the trade registry records. Otherwise, there may be risks related to transaction security in transactions made solely by relying on the signature circulars provided.

The aim of this amendment is to remove the use of signature circulars, which may cause conflict in practice, with a view to avoid the claims of third parties pursuant to article 36 paragraph 3 of the Turkish Commercial Code that they are not aware of the trade registry records registered with trade registry and announced in Turkish Trade Registry Gazette, and to cease another costly process.

Upon adoption of this regulation, confirming the signatures of the authorized representatives may become an issue in practice since signature circulars show the signature specimens of the authorized representatives and parties to a transaction verify the authenticity of the signatures by comparing the same with this document. Although there is no regulation has been made with respect to this issue, it will be clarified in the future how this issue will be evolved based on the need in practice (authorized representatives may issue individual signature declarations with their names before a notary public or signature specimens on the ID cards may be accepted as signature declarations).

Possibility to “Establish a Pledge on the Entirety of a Certain Movable Asset Group” under article 5 of the LMPCT

Prior to the amendment made in the first sentence of article 5 paragraph 2 of the LMPCT, the only way to establish a pledge on a commercial enterprise or craftsperson enterprise was establishing the same on the entirety of the enterprise, together with all the assets allocated to the operation of the enterprise at the time of the establishment of the pledge. Following the amendment made with the Law No. 7263, a dual distinction has been introduced and establishing a pledge on “the entirety of a certain movable asset group”, without establishing the same on the entire enterprise, is allowed.

Accordingly, (i) “in the event that a pledge is established over the entirety of the commercial enterprise and the craftsperson enterprise, any asset allocated to the operation of the enterprise present at the time of the establishment of the pledge”; and (ii) “in the event that a certain movable asset group of an enterprise is pledged as a whole, any asset included in this group” are deemed to be pledged.

The obligation set forth under article 4 paragraph 6 (c) of the LMPCT on specifying the asset subject to pledge and its distinctive features under the pledge agreement will not apply in case this new provision is implemented.