High Voting Right At General Assembly Meetings
Dear clients, In accordance with the article of the Turkish Commercial Code stated below, at the general assembly meetings of limited companies, it is regulated that certain votes may be given the high value in case of an equal number result of votes.
Paragraph 3 of Article 577 issued under the title of provisions binding on the condition that they are arranged in the company contract relates to this situation;
” ARTICLE 577– (1) The following records are binding provisions if these are regulated in the articles of partnership
e) Provisions granting veto right to designated partners or partners that could be designated or high voting right to certain shareholders in case of a tie vote as consequence of voting on a general assembly resolution’’
As can see clearly regulated from the article, the high voting for some shareholders can be recognized by the regulation to be made in the company’s articles of association. In this context, privileged share status and high voting right should not be mixed. With the privileged share, it can represent more than one vote right to some votes. The high voting right status is a situation that occurs only when the equal share rights are equal after the voting has resulted.
Privileged voting status is regulated as follows in TCC 478;
‘’ ARTICLE 478– (1) Some shares may be privileged with the first articles of association or by changing the articles of association.
(2) Privilege: is a superior right granted to the share in rights such as dividend, liquidation share, priority and voting right, or a new shareholding right not envisaged in the law. ”
While the terms of high voting right are clearly regulated in the limited company, no such regulation has been made for joint-stock companies. Privileged voting rights envisaged for joint stock companies also have limits. Privileged voting is not available in the following cases ;
- Company articles of association amendments
- Decision to file a lawsuit regarding acquitment and responsibility