Shareholders’ Agreement (SHA) Term Selector for Turkish Startups

🇹🇷Türkçe okuyucu musunuz? Bu sayfanın Türkçe versiyonu:Ortaklık Sözleşmesi (SHA) Hüküm Seçici →

CHECKLIST · 33 ITEMS · 15 MIN

Shareholders' Agreement (SHA) Term Selector

Before we draft or review a shareholders' agreement for a Turkish joint-stock company, we ask founders and investors which protections they want. This selector lists the usual building blocks with one-line explanations. Tick what you want, answer the short questions at the end, then copy the summary or email it to us. It is not exhaustive; it is where the conversation starts.

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0 / 33 Selected

SECTION 1 · 5 ITEMSPreferred shares SECTION 2 · 12 ITEMSRights for investors SECTION 3 · 4 ITEMSRights for founders SECTION 4 · 9 ITEMSShare transfer restrictions SECTION 5 · 3 ITEMSOther provisions SECTION 6Dispute resolution SECTION 7Administrative points SECTION 8Decisions and voting thresholds

SECTION 1 · 5 ITEMS

Preferred shares

Privileges attach to share groups in the articles of association (TCC Art. 478). Tick the privileges the investor shares should carry.

01Liquidation preferenceSets the order and amount in which shareholders are paid out of liquidation or exit proceeds (sale, merger) before the remaining amount is shared pro rata. Usually expressed as a multiple of the investment (1x) and as participating or non-participating. Read more →

02Right to nominate board membersThe holder of this privilege nominates a set number of board members; the general assembly elects the nominees unless there is a justified reason not to.

03Priority in profit distributionA larger share of distributable profit, payment before other shares, or a cumulative dividend that carries over to later years.

04Voting privilegeShares of equal nominal value carry different numbers of votes (TCC Art. 479). A share may carry at most fifteen votes; a court may allow more for institutionalisation or another justified reason (TCC Art. 479(2)).

05Veto rightListed decisions cannot be taken without the affirmative vote of the privileged group, even where that group does not hold a majority. Read more →

SECTION 2 · 12 ITEMS

Rights for investors

Contractual protections the investor side typically asks for.

06Lead investorWhere there is more than one investor, the lead investor exercises the investors' rights and gives approvals on their behalf. Read more →

07Tag-along rightIf a majority shareholder sells, the minority may join the sale on the same terms for the same proportion of its shares. Read more →

08Anti-dilution protectionIf a later round is priced below the investor's price, the investor is compensated, usually with additional shares or an adjusted conversion ratio (full ratchet or weighted average). Read more →

09Information rightsAccess to financial statements, management reports and company records beyond what the TCC grants every shareholder. Read more →

10Pre-emptive rightIn a capital increase, the right to subscribe for new shares in proportion to the existing holding before they are offered to others. Read more →

11Reserved matters at board levelListed board decisions require the approval of the investor or its nominated director.

12Reserved matters at the general assemblyListed general assembly decisions and articles amendments require the investor's approval.

13Board seatThe investor is entitled to be appointed to, or to nominate a member of, the board of directors.

14Right to appoint key personnelThe investor appoints or approves named key personnel who will work for the company exclusively for an agreed period. Read more →

15Put option (downside protection)The right to sell shares to the company or another shareholder at a predetermined price or at fair market value. Read more →

16Call option (downside protection)The right to buy another shareholder's shares at a predetermined price or at fair market value. Read more →

17Redemption rightThe right to require the company to buy back the investor's shares after a set period or on a trigger event; mandatory or optional.

SECTION 3 · 4 ITEMS

Rights for founders

Provisions that protect the founders' position and the deal itself.

18Drag-along rightA majority (or a defined group) selling to a buyer may require the other shareholders to sell on the same price and terms. Read more →

19Pre-emptive rightFounders keep the right to subscribe for new shares pro rata in later rounds. Read more →

20Anti-dilution protectionProtection for founders against a down round, mirroring the investor-side mechanism. Read more →

21Phantom stockA cash right that tracks the value of shares without transferring ownership; used to reward founders or key staff. Read more →

SECTION 4 · 9 ITEMS

Share transfer restrictions

Who may sell, to whom, and what happens to the shares of a leaver.

22Right of first refusal (ROFR)Before a shareholder sells to a third party, the other shareholders may buy the shares on the same terms as the third-party offer. Read more →

23Right of first offer (ROFO)A shareholder who wants to sell must first offer the shares to the other shareholders; if they decline, the seller may sell to third parties on terms no better than those offered. Read more →

24Vesting and reverse vestingFounders earn their shares over time or against milestones; under reverse vesting, shares already held are subject to a call option if the founder leaves early or targets are missed. Read more →

25Restriction on transfers in the articlesFor registered shares of a non-listed joint-stock company, the articles may allow the company to refuse a transfer for an important reason relating to the shareholder structure, the company's purpose or its economic independence (TCC Art. 493(2)).

26Conversion of share groups on transferShares transferred to a third party lose their group privileges and convert into ordinary (Group B) shares, so privileges stay with the original holders.

27Put optionThe right to sell shares at a predetermined price or at fair market value on defined triggers. Read more →

28Call optionThe right to buy another shareholder's shares at a predetermined price or at fair market value on defined triggers. Read more →

29Shotgun clause (buy-sell)A deadlock remedy: one shareholder names a price for the other's shares; the other must either sell at that price or buy the offeror's shares at the same price. Read more →

30Good leaver / bad leaverIf a shareholder leaves, the others (or the company) may buy the leaver's shares; a bad leaver (breach, misconduct) sells at a discount or nominal value, a good leaver at fair value. Read more →

SECTION 5 · 3 ITEMS

Other provisions

31Non-competeShareholders undertake not to compete with the company during their shareholding and for an agreed period afterwards. Read more →

32Employee stock options (ESOP)A pool of shares or options for employees, exercisable on conditions or targets at a discount or fixed price. Read more →

33New shareholders must accede to the SHAAnyone acquiring shares signs a deed of adherence and becomes bound by the agreement.

SECTION 6

Dispute resolution

How should disputes between shareholders be resolved?

ArbitrationMediation first, then court or arbitrationTurkish courts

SECTION 7

Administrative points

Short yes/no questions that shape the boilerplate.

Name the company's bankers, accountants, lawyers and company secretary in the SHA?

YesNo

Fix the frequency of board meetings in the SHA?

YesNo

Allow remote (electronic) board and general assembly meetings?

YesNo

SECTION 8

Decisions and voting thresholds

For each decision, should a simple majority or unanimity be required?

Sale of the company

MajorityUnanimity

Acquisition of a new business

MajorityUnanimity

Expenditure above a threshold (state the amount)

MajorityUnanimity

Change in the nature of the business

MajorityUnanimity

Employee incentive programmes

MajorityUnanimity

Additional notes

Anything else we should know: round size, investor type, existing agreements, timing.

Your summary

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Email to Vircon Legal

Legal notice. This tool is for information and to structure a first conversation; it is not legal advice and your selections do not create an engagement. Whether and how a provision can be implemented in a Turkish joint-stock company (articles of association, share groups, TCC Arts. 478, 479 and 493) requires a lawyer’s review. Vircon Legal: [email protected]. See also our glossary entry on shareholders’ agreements and our note on privileged shares and investor vetoes.

Considering a similar matter?Talk to counsel that moves at the speed of your round.

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Any information provided herein is for general informational purposes only and does not constitute legal, financial, accounting, or tax advice. Vircon Legal advises exclusively on the laws of the Republic of Türkiye and does not provide legal advisory services in the United States or any other foreign jurisdiction.

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