1. INTRODUCTION
Article 490 of the Turkish Commercial Code Nr. 6102 sets out the transfer of registered shares in incorporated companies. Accordingly, unless otherwise provided by law or by the articles of association, registered shares may be transferred without being subject to any restriction. Therefore, unless provided otherwise, registered shares may be transferred through the assignment of receivables pursuant to Articles 183 et seq. of the Turkish Code of Obligations. Although there is no explicit statutory regulation regarding the transfer of shares that are not represented by share certificates (so-called “uncertificated shares”), it is accepted in judicial precedents and in legal doctrine that such transfers are to be effected in accordance with the provisions governing the assignment of receivables. The validity of an assignment of receivables is subject to the requirement that it be made in writing.
Under the decision, dated 19.06.2025 and bearing the
Basis number 2024/390 and the Decision number 2025/691, the 21st Civil
Chamber of the Regional Court of Justice of Ankara which will be examined in
this article, the court ruled as follows with respect to the transfer of share
certificates in an incorporated company in accordance with the provisions
governing the assignment of receivables:
- In the absence of a written assignment declaration,
the transfer shall be deemed null and void, and
- The fact that the transfer is based on a resolution
of the board of directors and recorded in the share ledger does not satisfy the
validity requirement, and
- The plaintiff’s prolonged silence does not
constitute a violation of the principle of good faith under the circumstances
of the case, and
- Any subsequent transfers following a null share transfer shall likewise be invalid. [1]
2. TRANSFER OF SHARES IN INCORPORATED COMPANIES UNDER THE PROVISIONS ON THE ASSIGNMENT OF RECEIVABLES
The assignment of receivables is the transfer by a creditor of their right to claim from the debtor to a third party, without requiring the debtor’s consent. In order for an assignment of receivables to produce legal effects, there must be a concurrence of will between the assignor and the assignee, and the written form requirement must be satisfied. Pursuant to Article 184 of the Turkish Code of Obligations, an assignment of receivables shall not be valid unless it is made in writing. Accordingly, in the transfer of share certificates in incorporated companies under the provisions on the assignment of receivables, it is mandatory to have a written assignment declaration that clearly indicates that the share has been transferred.
In incorporated companies, registered shares may take the form of certificated or uncertificated shares. The transfer of certificated registered shares is set out under Article 490 of the Turkish Commercial Code Nr. 6102.
“Principle on the transfer of registered shares and share
certificates
ARTICLE 490 – (1) Unless otherwise provided by law or in the articles of association, registered shares may be transferred without being subject to any restriction. (2) A transfer by legal transaction may also be effected through the delivery to the assignee of a certificated registered share that has been endorsed.”
Pursuant to this article, there are no restrictions on the transfer of registered shares. Paragraph 2 provides that a transfer may be effected through endorsement and delivery of the share. Although not explicitly set out under the article, it is also possible for the transfer to be carried out in accordance with the provisions on the assignment of receivables, set forth under Articles 183 et seq. of the Turkish Code of Obligations. This is because the law does not contain any provision limiting the transfer of shares through a written assignment agreement.
As for the transfer of uncertificated shares, there is no explicit provision under the Turkish Commercial Code Nr. 6102. However, based on the principle of transferability of shares, the transfer of uncertificated shares is possible. Indeed, both judicial precedents and legal doctrine indicate that uncertificated shares may be transferred in accordance with the provisions on the assignment of receivables under Articles 183 et seq. of the Turkish Code of Obligations.
The decision, bearing the Basis number 2014/801 and the Decision number 2014/891 and dated 12.11.2014, of the General Assembly of Civil Chambers of the Court of Cessation reads as follows:
“With respect to the transfer of the share, it is well established that, pursuant to Articles 416 and 417 of the Turkish Commercial Code Nr. 6762, effective on the date of the lawsuit, the transfer of registered share certificates requires either a written assignment declaration or a full endorsement on the back of the certificate, in addition to the transfer and hand-over of possession of the certificate. Failure to comply with these conditions renders the transfer invalid.
The fact that the incorporated company has not yet issued share certificates, and that even a temporary certificate has not been issued, does not constitute an obstacle to the transfer of shares in the incorporated company. There is no provision under the Turkish Commercial Code Nr. 6762 regarding the transfer of uncertificated shares in an incorporated company. Pursuant to the principle of transferability of shares, uncertificated shares may be freely transferred in the same manner as certificated shares, and such transfer is deemed to be carried out in accordance with the provisions on the assignment of receivables under Articles 162 et seq. of the Turkish Code of Obligations Nr. 818 (corresponding to Articles 183 et seq. of the Turkish Code of Obligations Ne. 6098). (Hayri Domaniç, Anonim Şirketler Hukuku ve Uygulaması (Turkish Corporate Law and Practice), Istanbul 1988, p. 1325; Hasan Pulaşlı, Commentary on Company Law, Ankara 2011, Vol. II, p.1261).” [2]. In this decision, it is explicitly stated that both certificated registered shares and uncertificated shares may be transferred in accordance with the provisions on the assignment of receivables.
In a transfer of shares carried out in accordance with the provisions on the assignment of receivables, the concurrence of will between the parties and the existence of a written assignment declaration are essential requirements. For the transfer to produce legal effects vis-à-vis the company, it must also be recorded in the share ledger [3]. However, this entry is presumptive in nature, and the contrary may be proven. Indeed, both judicial precedent and legal doctrine hold that entries in the share ledger are declaratory rather than constitutive [4]. Accordingly, share transfers based on a resolution of the board of directors and recorded in the share ledger will not become valid if the written form requirement is not satisfied.
3. LAWSUIT UNDER THE DECISION OF THE REGIONAL COURT OF JUSTICE
Under the respective dispute, the plaintiff claimed that the registered shares held in their name in the incorporated company were transferred to third parties without their knowledge or consent, requesting a declaration of invalidity of the said share transfers, the registration of the shares in their name, and the collection of dividend rights. According to the case file, the transfer of the plaintiff’s shares was based on a resolution of the board of directors dated 15.12.2013. The resolution of the board of directors was signed by the spouse of the plaintiff, who was the chairman of the board at the-then time, and the plaintiff’s shares were transferred to the plaintiff’s sons. However, there exists no written assignment agreement between the parties concerning the share transfer, nor is there a written assignment declaration bearing the plaintiff’s signature indicating that the shares were transferred.
The court of first instance found that of the 200,000 shares of the defendant company, 199,975 shares, which belonged to the plaintiff, were transferred to the plaintiff’s son without the plaintiff’s knowledge. However, the court held that it would not be in accordance with the ordinary course of events for the plaintiff, who was a controlling shareholder, to have been unaware of the company’s operations during the nearly eight-year period between 15.12.2013, when the share transfer was approved by the board of directors of the defendant company, and 03.06.2021, the date on which the present lawsuit was filed, and concluded that the matters registered and announced in the trade registry would also be binding on the plaintiff. The court held that the plaintiff’s decision to remain silent for such a long period and to file the lawsuit only eight years later was contrary to the principle of good faith under Article 2 of the Turkish Civil Code and accordingly dismissed the claim. The plaintiff subsequently filed an appeal against the decision.
4. THE DECISION, BEARING THE BASIS NUMBER 2024/390 AND THE DECISION NUMBER 2025/691, OF THE 21ST CIVIL CHAMBER OF THE REGIONAL COURT OF JUSTICE OF ANKARA
The chamber determined that the shares under the case were uncertificated shares. As explained above, the transfer of uncertificated shares is subject to the provisions on the assignment of receivables. The existence of a written assignment declaration is a prerequisite for the transfer of shares to produce legal effects. Indeed, the Chamber stated in its decision as follows: "Since the assignment of receivables is a dispositive transaction, it results in the transfer of the uncertificated share to the assignee. Formally, the transfer of a fully paid uncertificated share occurs when a written assignment declaration indicating that the share has been transferred is delivered to the assignee. In this case, registered shares may also be transferred in accordance with the provisions on the assignment of receivables under Articles 183 et seq. of the Turkish Code of Obligations. Pursuant to Article 184 of the Code, it is sufficient for the assignment of a receivable to be made in writing."
The Chamber found that there was no written share transfer agreement regarding the transfer of the plaintiff’s shares, and that there was not any written assignment declaration by the plaintiff, and that the board resolution relied upon for the transfer bore only the signature of the chairman of the board, who was the plaintiff’s spouse, and that the plaintiff had not authorized their spouse to transfer the shares, and that there was no information or document under the case file indicating that the plaintiff subsequently consented to the transfer. The Chamber reversed the judgment of the court of first instance and partially accepted the plaintiff’s claim by and through its decision, bearing the Basis number 2024/390 and the Decision number 2025/691 and dated 19.06.2025, which reads as follows:
“Accordingly, there was neither a written assignment declaration evidencing the transfer of the 199,975 shares belonging to the plaintiff delivered to the assignee, nor any document / power of attorney under the case file indicating that the plaintiff had authorized their deceased spouse … in this regard, and in this case, the transfer of the plaintiff’s shares by the deceased … for and on behalf of the plaintiff without authorization does not produce any legal effect, and the 199,975 shares belonging to the plaintiff were not validly transferred in accordance with Articles 183 et seq. of the Turkish Code of Obligations, and although the court considered that the transfers were carried out in 2013 and that the present lawsuit was filed in 2021, and therefore argued that the plaintiff had not acted in good faith under Article 2 of the Turkish Civil Code, it should be noted that there is no information or document under the case file indicating that the plaintiff subsequently accepted or consented to the invalid share transfer, and in view of this, the plaintiff’s assertion of the claim despite the elapsed time cannot be regarded as an abuse of rights.
As a result, it is understood that the 199,975 shares belonging to the plaintiff were not transferred in compliance with the formal requirements prescribed by law, meaning that the transfer was not made in writing, and that any transfer carried out in disregard of the formal requirement is null and void and produces no legal effect, and that it is therefore of no legal consequence, and that it cannot be said that the 199,975 shares belonging to the plaintiff were validly transferred to the non-litigant … and the defendant …, and that all subsequent transfers carried out based on the invalid resolution of the board of directors, dated 12/12/2013, are also null and void, and accordingly, instead of issuing a judgment establishing that the plaintiff is the owner of 199,975 shares in the defendant company and ordering the cancellation of 199,975 out of the 200,000 shares registered in the defendant company in the name of the defendant and their registration in the share ledger in the plaintiff’s name, the court issued a judgment in writing, which is contrary to procedure and law.”
5. ANALYSIS OF THE DECISION
5.1. Written Assignment Declaration is an Essential Requirement in the Transfer of Shares under the Provisions on the Assignment of Receivables.
As explained above and under the Chamber’s decision, both certificated registered shares and uncertificated shares may be transferred in accordance with the provisions on the assignment of receivables under Articles 183 et seq. of the Turkish Code of Obligations. For the transfer to produce legal effects, the existence of a written assignment declaration is required. The chamber held that failure to comply with the written form requirement renders the transfer void.
5.2. Reliance on the Board of Directors’ Resolution and Entry in the Share Ledger does not Render the Transfer Valid.
The chamber stated, under its decision, that the entry of the transfer in the share ledger is not constitutive. Another point emphasized under the decision is that a resolution of the board of directors that does not bear the signature of the transferring shareholder cannot substitute for a dispositive act. Accordingly, the approval of the transfer by the board of directors or the recording of the transfer in the share ledger does not render the transfer valid in the absence of a written assignment declaration.
5.3. Subsequent Transfers Based on an Invalid Transfer are also Void.
As a legal consequence of voidness determination, any subsequent transfers based on an invalid transfer will also be invalid, since ownership and shareholder status never passed to the assignee. The Chamber determined that the initial transfer based on the resolution of the board of directors, dated 12.12.2013, was invalid, and consequently concluded that all subsequent transfers carried out relying on this transfer were also null and void.
5.4. The Plaintiff’s Prolonged Silence Does Not Contravene the Principle of Good Faith.
The court of first instance found that the plaintiff’s silence for nearly eight years was contrary to the principle of good faith under Article 2 of the Turkish Civil Code; however, the Chamber did not uphold this assessment. The chamber noted under its decision that there is no information or document under the case file indicating that the plaintiff had accepted or consented to the transfer. It should be noted that a legal act that does not meet the constitutive requirements cannot, as a general rule, produce legal effects. However, a claim for voidness determination that is made in a manner contrary to the principle of good faith is not protected by the legal order, since such conduct would constitute an abuse of rights. In this present case, if the plaintiff had authorized a transfer that did not satisfy the formal requirements, subsequently asserting that the transfer was invalid would not be consistent with the principle of good faith. The Chamber held that the plaintiff’s prolonged silence did not imply that the plaintiff had consented to the transfer and was not contrary to the principle of good faith.
6. CONCLUSION
The decision, bearing the Basis number 2024/390 and the Decision number 2025/691 and dated 19.06.2025, of the 21st Civil Chamber of the Regional Court of Justice of Ankara clearly demonstrates that the provisions on the assignment of receivables apply to the transfer of uncertificated shares in incorporated companies and that compliance with the written form requirement is constitutive.
The decision holds that, pursuant to Article 184 of the Turkish Code of Obligations, a share transfer carried out without a written assignment declaration is invalid, and that a resolution of the board of directors or an entry in the share ledger cannot substitute for the written assignment declaration. The transfer of shares occurs not through the will of the company’s organs, but through the shareholder’s written dispositive act, and until the written form requirement is fulfilled, shareholder status does not pass to the assignee.
Furthermore, the decision emphasizes that any subsequent transfers carried out based on a transfer that violates the formal requirements will also produce no legal effect, and that if the initial transaction is invalid, all subsequent dispositions dependent on the same are likewise null and void. In addition, the decision notes that the shareholder’s prolonged silence, by itself, does not constitute a violation of the principle of good faith.
Osman Serhat Demirci, Legal Intern
References:
1. The Decision, bearing the Basis number 2024/390
and the Decision number 2025/691 and dated 19.06.2025, of the 21st
Civil Chamber of the Regional Court of Justice of Ankara
2. The Decision, bearing
the Basis number 2014/801 and the Decision number 2014/891 and dated 12.11.2014,
of the General Assembly of Civil Chambers of the Court of Cessation
3. The
Decision, bearing the Basis number 2014/15601 and the Decision number 2015/11180
and dated 27.10.2015, of the 11th Civil Chamber of the Court of
Cessation
4. Gönen Eriş, Ticari
İşletme ve Şirketler (Commercial Enterprises and Companies), 3rd
Edition, p. 2569
