Picture a two-founder tech company: shares split 50-50, the relationship has broken down, and no decision has passed for months. Founder A believes her partner is actively harming the company and wants him out. Turkish law does provide a mechanism for that; the trouble is that the key to the mechanism lives in the pocket of the very partner she wants to remove. In a decision published in the Official Gazette on 17 March 2026, the Turkish Constitutional Court held that this lock is unconstitutional for two-partner limited liability companies.
Why the regime deadlocked
The Turkish Commercial Code offers two routes for expelling a partner from an LLC. The first is a general assembly resolution based on grounds written into the articles of association in advance, such as breach of non-compete or conduct harmful to the company. The second is a court action for expulsion on just cause, brought by the company (TCC Art. 640). The catch: filing that action is a non-delegable power of the general assembly, and the resolution is subject to an aggravated quorum under TCC Art. 621, requiring at least two thirds of the votes represented at the meeting together with an absolute majority of the entire voting share capital.
In a two-partner company, and above all in an equal-split one, that quorum is mathematically unreachable; the partner facing expulsion can always block the resolution that would start his own removal. The Court of Cassation accepted the consequence: in two-partner companies the expulsion action simply could not be filed. The mechanism existed on paper and nowhere else.
| Issue | Before the decision | The Court’s finding |
|---|---|---|
| Precondition of the expulsion action | General assembly resolution at an aggravated quorum | Effectively impossible in a two-partner company |
| Court of Cassation practice | Action cannot be filed for lack of quorum | The system exists in theory, functions in practice not at all |
| Dissolution action (TCC Art. 636/3) | Treated as the alternative route | Not an effective alternative; the claimant risks being the one bought out |
| Constitutional outcome | – | Violation of freedom of enterprise (Art. 48) and the right to an effective remedy (Art. 40); provision annulled for two-partner LLCs |
The Court’s reasoning
The Constitutional Court framed expulsion not as an individual sanction but as a structural tool: it keeps the company operating, restores cooperation between partners and preserves the company’s economic existence. Where that tool cannot work, the problem is not merely a quarrel between partners; it is a constitutional one touching the company’s survival. The Court also rejected the dissolution action as a genuine alternative, because in a dissolution suit the judge may order the claimant partner bought out and removed instead, so the partner who complains about the deadlock risks being the one shown the door. The provision was annulled for two-partner LLCs by majority vote.
What it means for founders
A large share of Turkish startups are built by two founders, often at or near an equal split; this decision is about them. The annulment names the lock, but how the gap is filled depends on the legislature’s next move. The practical lesson is therefore unchanged and stronger: solving deadlock in court is always more expensive than preventing it in the documents. The deadlock scenario should be engineered in advance in the founders’ agreement and the shareholders’ agreement: expulsion grounds written into the articles, put and call options, buyout-offer exit mechanics, and repurchase rights over a bad leaver’s shares are the contractual insurance against exactly the impasse this decision describes.
Does the decision cover two-partner companies that are not 50-50?
The annulment applies “in respect of two-partner limited liability companies”. In practice the problem bites hardest at an equal split; a partner already holding the required majority could operate the mechanism anyway. The decision targets the scenario where the quorum is structurally out of reach.
Are joint stock companies affected?
The decision concerns the LLC provision. The expulsion regime in a joint stock company is built differently, so there is no direct effect. The Court’s deadlock analysis, though, deserves a careful read by anyone drafting a shareholders’ agreement for a two-shareholder JSC.
Where to start
If you run a two-partner Turkish LLC, check three documents: do your articles contain written expulsion grounds, does your shareholders’ agreement define a deadlock mechanism, and is founder vesting with repurchase in place? If at least one is missing, the impasse this decision describes is still yours.
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