Academic Studies


The capital increase is of vital importance in the growth and restructuring processes of joint stock companies (incorporations). Thanks to the capital increase, the incorporations improve their competitive strength, and enjoy a financial relief due to the high credibility provided. In parallel with this change and growth in the company, the shareholders should also take their share from this growth at the same ratio. The study examines the rights of shareholders during the capital increase process.

Other than for these reasons, as a rule, the principal capital increase may be carried out in incorporations at any time. The principal capital increase is not an arrangement designed as a consequence of occurrence of a reason, but rather a right stated in the law by the lawmaker and does not require finding a valid ground. The lack of requirement of showing a justification means that this decision may not be canceled only for this reason. However, the lack of requirement of showing a justification does not remove the obligation that the decision to be taken by the company must comply with the principle of honesty as specified in Article 445 of Turkish Code of Commerce. Shareholders have the burden of proof to prove that the general assembly resolution regarding the principal capital increase is against the principle of honesty, and there is an intentional act aimed at damaging the shareholders.

As no valid ground is required for the company's principal capital increase, the existing amount of the principal capital does not constitute a vested right for the shareholder as well. For this reason, the shareholders may not object to the capital increase based on a legal ground that their shares in the company will decrease if they do not participate in the principal capital increase, and if even they do object, this is not protected by the legal order. On the other hand, the shareholders do not have an obligation to participate in the principal capital increase. Such an obligation may not be decided in the articles of association either. Article 480/I of Turkish Code of Commerce regulates this matter by saying that the shareholder may not be encumbered with any debt other than performance of the premium that exceeds the share price or nominal price of the share. The following can be listed as the prerequisites for capital increase.

I. Fulfillment of all share commitments
II. Lack of funds allowed by the legislation to be added to capital in the balance sheet
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