In a joint-stock company, shareholders may not have a significant say in company affairs due to owning a smaller portion of shares. However, to make informed investment decisions, they still need information about the company's health.
The Turkish Commercial Code (TCC) grants all shareholders the right to obtain information and review the company's financial situation, regardless of their shareholding amount. This ensures transparency and empowers shareholders to make informed choices.
Accessing Information Before the General Assembly
According to Article 437/1 of the TCC, several documents must be available for shareholder review at least fifteen days before the general assembly meeting. These include:
Financial statements
Consolidated financial statements (if applicable)
Annual activity reports by the board of directors
Audit reports (as per Article 402 of the TCC)
Board of directors' profit distribution proposals
Shareholders can also request a copy of the income statement and balance sheet, with the company covering the cost.
Information Rights During the General Assembly
Shareholders have the right to ask questions during the general assembly. This allows them to gain insights beyond financial statements, such as the company's future strategy.
Article 437/2 of the TCC grants shareholders the right to seek information from:
By exercising this right, shareholders can gain a clearer picture of the company's direction and performance.
Accessing Information After the General Assembly
Under specific circumstances, shareholders can examine the company's commercial books and internal correspondence after the general assembly. However, this requires approval from the general assembly itself or the board of directors (Article 437/4).
An expert can also be involved in the examination process. However, the TCC restricts access to information that could reveal company secrets or jeopardize its interests.
Protecting Company Secrets and Interests
Article 437/3 of the TCC allows companies to reject information requests if disclosing the information could compromise company secrets or other vital interests.
If a shareholder believes their request was unfairly denied, they can challenge it within ten days by applying to the commercial court. The court will then decide whether the information should be provided based on the validity of the company's reasons for denial.
Key Differences Between Shareholder and Board Member Rights
Board members have a broader right to access company information compared to shareholders. This is because board members have the authority to represent the company and make decisions on its behalf.
In conclusion, the right to information and review empowers shareholders to make informed investment decisions and hold companies accountable.
