What is Articles of Association?
The Articles of Association (Esas Sözleşme) are the constitutional document of a Turkish corporation: the contract among shareholders that establishes the company’s formation, governance structure, share-class architecture, decision-making rules, and operational boundaries. Governed by Turkish Commercial Code (TTK) Articles 339, 478, and related provisions, the Esas Sözleşme is functionally analogous to the Delaware Certificate of Incorporation combined with By-Laws, or the UK Articles of Association, but operates within Turkish corporate-law tradition with several distinct procedural and substantive features.
Mandatory content under TTK Article 339 includes: company name and registered office; corporate purpose (faaliyet konusu: typically drafted broadly to accommodate business evolution); capital amount and structure (share capital (esas sermaye) as the default system, or the registered (authorized) capital system (kayıtlı sermaye) for companies electing it); share-class designations (any preferred shares, voting rights, dividend preferences); directors and management arrangements; meeting and voting procedures; and, where the company has a fixed term, its duration. Additional optional provisions address share-transfer restrictions, supermajority requirements, director-nomination rights, and other governance fine-tuning.
For VC-backed companies, the Esas Sözleşme is the structural anchor implementing investor-protection terms in TTK-compatible form. Key provisions typically negotiated in financing rounds and reflected in articles amendments include: preferred share classes (Series Seed Preferred, Series A Preferred, etc.) with specific economic and governance rights; protective provisions requiring preferred-class approval for enumerated decisions (sale, capital increases above thresholds, related-party transactions); board composition formulas (preferred directors, common directors, independent seats); transfer restrictions (ROFR, tag-along, drag-along: coordinated with shareholders’ agreement); liquidation preference mechanics; and anti-dilution adjustments.
Unless the law or the articles provide otherwise, an articles amendment requires a general assembly at which at least one half of the share capital is represented and a majority of the votes present (TTK Article 421), with higher thresholds for matters such as creating preferred shares (75% of capital), followed by ministry approval for certain amendment types, registration with trade registry, and publication in Turkish Trade Registry Gazette. Certain amendments affecting share-class privileges, conversion of share classes, or changes restricting shareholder rights require special-quorum/majority (potentially unanimity): making careful pre-financing structural planning essential to avoid future amendment complications.
For Turkish founders structuring VC-backed companies, articles design is a foundational discipline: balancing the flexibility needed for future financing rounds against the rigidity required to protect existing shareholder positions, coordinating Turkish-law articles content with parallel U.S.-style shareholders agreements and side letters, and structuring share-class architecture that supports incremental preferred-share creation across multiple financing rounds without triggering disruptive supermajority amendment requirements.
Sources. Turkish Commercial Code No. 6102. Statute links open the official consolidated Turkish texts on mevzuat.gov.tr.