Company Mergers, Divisions and Conversions (TTK arts.134-194)

Under TTK art.136, a merger occurs either by the absorption of one company by another (merger by acquisition) or by two or more companies combining into a newly formed company (merger by formation). The core documents are the merger agreement and the accompanying merger report (TTK arts.146-147).

TTK art.155 allows 'simplified mergers' where the acquiring company holds all of the voting shares of the transferring company (art.155/1) or at least ninety per cent of them (art.155/2) — the test is the shareholding ratio, not the size of the company; in this regime, the merger report, inspection right and general assembly approval may be partly or wholly dispensed with. The merger takes effect on registration with the trade registry at the seat of the acquiring company (TTK art.153).

Division is divided into 'full division' and 'partial division' under TTK art.159 et seq. In a full division, the entire assets of the company are divided and the company is terminated; in a partial division, only part of the assets is transferred and the original company continues.

A division may be made either by transferring to an existing company or by transferring to a newly formed company. A division agreement or plan and a division report are prepared; the documents for shareholder inspection are made available in the manner prescribed by law. Shareholders' interests in the acquiring company and any settlement payment (denkleştirme akçesi) are protected (TTK art.169).

Under TTK art.180, the company in its new form is the continuation of the former company; rights and obligations therefore continue automatically. The conversion of a limited liability company into a joint stock company is the most common example and offers a range of financial, legal and corporate advantages.

For a conversion, the management organ prepares a 'conversion plan' (TTK art.185), a 'conversion report' (TTK art.186) and an opening balance sheet appropriate to the new form. The conversion is completed by general assembly resolution and trade registry registration. With the unanimous consent of all shareholders, small and medium-sized companies may dispense with the conversion report (TTK art.186/3).

In corporate-law matters, resolutions, meeting notices, agendas, attendance lists, signature circulars, trade-registry application documents and the articles of association must be reviewed as a whole. In corporate transactions, most disputes arise not from the substance of the resolution but from defects in notice, quorum, representation and registration.

Transactions such as share transfers, amendments to the articles of association, mergers, demergers and liquidations are not completed by internal resolutions alone; notary, trade-registry, tax and accounting dimensions are also part of the process. The legal steps and financial obligations should therefore be planned together when drawing up the transaction timetable.

From the perspective of shareholders or directors, dissenting opinions, information rights, requests for special audit and records of release and liability may carry decisive evidentiary weight in any subsequent action. Minutes of meetings should therefore be prepared in clear and auditable form.