The Legal Structure and Corporate Bodies of a Joint Stock Company

Legal Article · 12 November 2026
Attorney Thomas Andreas Di Constantinople

A joint stock company is a capital company with a specified capital divided into shares. TTK Art. 329 provides that the company is liable for its debts with its own assets. Shareholders, in turn, are obliged towards the company in respect of their committed capital contributions. Separation of the company's assets from those of its shareholders is a fundamental feature of the joint stock company structure. Other legal grounds, such as a personal guarantee, a separate assumption of debt or directors' liability, are nevertheless assessed separately.

As a rule, management and representation of the company belong to the board of directors. The general meeting is the body through which shareholders decide matters specified by law and the articles of association. The functions of these two bodies are not interchangeable. The non-transferable duties and powers in TTK Art. 375 and Art. 408 prevent unrestricted transfers of responsibilities between corporate bodies. Shareholder status alone does not confer authority to represent the company before third parties.

The articles of association are the initial document governing the company's internal organisation; they cannot, however, override mandatory statutory provisions. The scope of management and representation powers, the body competent to make a decision and the trade registry entries are assessed together. The authority of the person acting on behalf of the company and the transaction's compliance with the company's internal decision-making process may raise different issues.

Liability under TTK Art. 553 requires examination of a breach of a statutory duty or a duty under the articles of association and the relevant conditions for liability, in addition to the person's management role. Every loss suffered by the company cannot automatically be attributed to all directors or all shareholders. The duty breached, the decision-making process, fault and the connection with the loss must be established separately. The distinction between legal personality, shareholder status and a corporate office is therefore decisive in joint stock company disputes.

Legal Basis: Turkish Commercial Code No. 6102, Arts. 329, 365, 375, 408, 553.

This article has been prepared for general legal information purposes.