Term of the Limitations on Profit Distribution Has Been Extended


Uçar Law & Consultancy Office

Uçar Law & Consultancy Office


Regarding the Provisional Article 13 added to the Turkish Commercial Code No. 6102 (“TCC”) on the date April 16, 2020, it is decided that only twenty-five percent of the net profit can be distributed for 2019, last year profits and free reserve stipends could not be distributed, and that the general assembly would not be able to authorize the distribution of dividend advance stake to the board of directors, until September 30, 2020.

Another remarkable regulation of the article is that payments for a portion exceeding twenty-five percent of the net profit for the 2019 period will be deferred until the end of the period specified in the article, if the General Assembly has decided to distribute dividends for the 2019 reporting period, but payments have not yet been made to shareholders or partial payments have been made.

The article also states capital companies that do not fall within the scope of application of this provision. These are state, provincial private administration, municipality, village and other public legal entities and public funds with more than fifty percent of their capital, companies with more than fifty percent of their capital, directly or indirectly.

With the Presidential decree No.2948 published in the Official Gazette dated 18/09/2020 and numbered 31248, it has been decided to extend periods specified in the above mentioned paragraphs of the Provisional Article 13 for 3 months as of September 18, 2020 in accordance with the first paragraph of the article.

As a result of this extension, the end date was set as December 30, 2020 in terms of limitation of profit distribution in capital companies.

The full text of the Presidential Decree can be accessed here.

You can contact us for further information and to take advantage of our advocacy and consulting services. You can find detailed information about our office’s work on Corporate Law on our


Damla KIZIL (Apprentice Attorney)

Uçar Law & Consultancy Office


This article is prepared by Uçar Law & Consultancy Office for information purposes only, and the information and visual materials contained in it cannot be used, reproduced, published, transmitted to a third party or translated without prior written permission from us. This legal memorandum is not a comment or legal opinion and was prepared on the publication date and our attorney’s office is not responsible for its failure to
update continuously.”

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