Most Turkish startups are incorporated with the trade registry’s template articles of association, and most first-round investors then try to paste the shareholders’ agreement into them. Both instincts are wrong, for the same reason: the articles of a joint-stock company are not a private contract. Under Article 340 of the Turkish Commercial Code No. 6102 (TCC) they may deviate from the Code’s provisions on joint-stock companies only where the Code expressly permits, under Article 480 they may not impose on a shareholder any obligation beyond paying for the shares, and under Article 452 the general assembly may later amend every provision subject to acquired and inalienable rights. What goes into the articles therefore binds the company, the registry and every future shareholder, but only if the Code allows it; what goes into the shareholders’ agreement binds the signatories, can say almost anything, and is enforced by damages and specific performance rather than by the registry. This article sets out the mandatory content of the articles, the two principles that fence them in, the investor protections that the Code does allow in the articles and how to draft them, the terms that must stay in the agreement, and how to make the two documents work together. It follows our pieces on ten critical points of a shareholders’ agreement and which promise belongs where in family companies.
What the articles must contain
Article 339(1) requires the articles to be in writing, with the founders’ signatures notarised or the articles signed before the trade registry director or deputy. Article 339(2) lists the mandatory content: the trade name and seat; the business purpose, defined with its essential points; the share capital, the nominal value of each share and the form and conditions of payment; whether shares are registered or bearer, the privileges attached to particular shares, and transfer restrictions; contributions in kind and their valuation, acquisitions of enterprises or assets, and any remuneration to founders; benefits to founders, directors and others from profits; the number of directors and those authorised to sign; how general assemblies are convened and voting rights; the duration if limited; how company announcements are made; the classes and amounts of shares each founder subscribes; and the financial year. Article 339(3) requires the first board to be appointed in the articles. Article 332 sets the minimum capital, which Presidential Decision No. 7887 raised from 1 January 2024 to 250,000 lira for an ordinary joint-stock company and 500,000 lira in initial capital for a non-public company adopting the registered capital system. The template articles satisfy all of this; what they lack is everything an investor needs.
Two fences: mandatory provisions and the single obligation
Article 340 states the principle of mandatory provisions: the articles may deviate from the Code’s joint-stock company rules only where the Code expressly permits. The consequence is that a clause the Code does not authorise is not merely unenforceable against a dissenter, it is invalid, and the registry may refuse to register it or a court may strike it later. The Code’s permissions are specific and scattered: Article 478 for privileged shares, Article 492 for transfer approval, Article 360 for board representation of share groups, Article 421 for higher quorums, Article 460 for registered capital, Article 463 for conditional capital, Article 1527 for electronic meetings, and others. Article 480 states the single-obligation principle: except as the Code provides, the articles may not impose on a shareholder any obligation other than paying the share price and any premium; shareholders cannot demand back what they contributed (Article 480(3)); and, only where transfers are subject to company approval, the articles may impose recurring non-monetary secondary obligations, which may be noted on the certificates (Article 480(4)). The consequence is that any clause obliging a shareholder to do something, to fund a future round, to sell on a drag-along, to work for the company, to refrain from competing, to pay a penalty, cannot live in the articles; it lives in the agreement.
What investors can lawfully put in the articles
A well-drafted startup’s articles use every permission the Code gives. Privileged shares under Article 478 create a class for the investor with a dividend and liquidation preference, and Article 479 allows voting privileges of up to fifteen votes per share (more only with court approval for institutionalisation or just cause), unusable on articles amendments and discharge or liability resolutions, which we discussed in the privileged shares article; creating them in an existing company requires the seventy-five per cent vote of Article 421(3)(b). Board representation under Article 360 gives a defined share group the right to nominate candidates for a stated number of seats, whom the general assembly must elect unless there is just cause, which is how the investor director becomes a corporate right rather than a promise. Reserved matters can be given corporate force by raising quorums under Article 421(1), which allows the articles to make quorums stricter but not looser, and by requiring the affirmative vote of the privileged class for listed decisions, which Article 454 backs with the special assembly of privileged shareholders. Transfer approval under Article 492 with a composition clause under Article 493(2) makes the agreement’s transfer regime enforceable by the company, as we explained in share transfer restrictions. Registered capital under Article 460 and conditional capital under Article 463 build the round mechanics and the option pool into the constitution. Board procedure clauses under Articles 390 and 1527 set the meeting quorum, notice and electronic participation. And information rights beyond the statutory floor can be granted to all shareholders, though not restricted below it. Each of these is registered, announced and visible to every future shareholder, which is exactly their value.
What must stay in the shareholders’ agreement
The agreement carries what Article 480 excludes and what the Code does not authorise: founder vesting and reverse vesting with good and bad leaver pricing; drag-along and tag-along obligations to sell or to procure a sale; pre-emptive right waivers for future rounds and pay-to-play; obligations to vote in a particular way, including on the election of the investor’s nominee; non-compete and non-solicit covenants of founders as shareholders; information and reporting covenants with monthly detail; anti-dilution price adjustments implemented through future issues; liquidation waterfall mechanics beyond the class preference; put and call options; and penalties and indemnities. The agreement should also contain the procurement clause: each party undertakes to exercise its votes and to cause its nominee directors to act so that the company gives effect to the agreement, and agrees that the articles will be amended to the extent the Code permits to reflect it. Where a clause could sit in either place, it should sit in both, with the articles carrying the corporate mechanism and the agreement the economic promise; where they conflict, the agreement should say which prevails between the parties, knowing that the articles prevail towards the company and third parties.
Amendments, acquired rights and the seventy-five per cent
Article 452 allows the general assembly, unless the articles provide otherwise, to amend all provisions of the articles within the Code’s conditions, subject to acquired and inalienable rights. Ordinary amendments need the Article 421(1) quorum (half the capital present, majority of votes cast, one-third at a second meeting); unanimity is required for imposing obligations to cover balance-sheet losses or secondary obligations and for moving the seat abroad (Article 421(2)); and seventy-five per cent of the capital is required for completely changing the business purpose, creating privileged shares and restricting the transfer of registered shares (Article 421(3)), in every meeting (Article 421(4)). Article 453 requires the amendment text to be announced with the existing provisions before the meeting and, for companies within Article 333, the Ministry’s permission. An investor coming into a template-articles company should therefore expect the closing to include a full restatement adopted at a general assembly with the founders’ full attendance, and should check that no earlier amendment lowered quorums, which Article 421(1) makes invalid, or that no clause purports to bind shareholders personally, which Article 480 makes void.
A drafting sequence that works
Start from the term sheet and sort every term into three columns: corporate mechanism the Code permits in the articles, economic promise for the agreement, and both. Draft the articles as a restatement, not a patch, with a share-class table, a board article using Article 360, a reserved-matters article using Article 421 quorums and the privileged class vote, a transfer article using Articles 492 to 494 with a composition clause, a capital article using Articles 460 or 463 where the plan needs them, a meetings article using Articles 390 and 1527, and a dividend and liquidation article using Article 478. Draft the agreement to reference the articles by clause, to carry the procurement undertaking, and to define what happens if the registry refuses a clause. Then check the registry’s current practice for the province, because registries differ on the wording they accept for composition clauses and reserved matters, and a rejected clause on closing day is a delay everyone can avoid.
Can the articles oblige founders to stay for four years?
No; Article 480 forbids obligations beyond paying for the shares. Founder commitment lives in the agreement (vesting, leaver terms, non-compete) and, for the corporate consequence, in a transfer-approval clause and a privileged-class structure that the agreement uses.
Is a reserved-matters list in the articles enforceable?
Yes, if drafted as quorums and class votes the Code permits: higher general-assembly quorums under Article 421(1) and the affirmative vote of the privileged class under Articles 478 and 454. A list that simply says “the investor must consent” without a share-class mechanism is contractual at best.
The registry refused our composition clause. What now?
Adjust the wording to track Article 493(2): define permitted holders by reference to the company’s business purpose or economic independence (no competitors, only founders, employees, approved investors and their affiliates). Keep the economic version in the agreement and use the Article 493(1) buyout as the backstop.
Related: articles of association · shareholders’ agreement · protective provisions · founder vesting.
Sources. Turkish Commercial Code No. 6102 (Articles 332–333, 339–340, 360, 390, 421, 452–454, 460, 463, 478–480, 492–494, 1527); Presidential Decision No. 7887 of 24 November 2023 on minimum capital. Statute links open the official Turkish texts on mevzuat.gov.tr.
This article is provided for general information only and does not constitute legal advice. Please seek legal support for an assessment of any specific matter.
