New Regulation Concerning the Signature Declarations of the Authorized Signatories in Turkey

Ozkan Law Office Newsletter Turkey Adopted New Regulation Signature

New Regulation Concerning the Signature Declarations of the Authorized Signatories in Turkey

Turkey Adopted New Regulation on Signature Declarations of Authorized Signatories, The Communique Amending the Communique on the Signing of Articles of Association before Trade Registry Offices (“Communique”) was published in the Official Gazette numbered 31401 on 20 February 2021 and entered into force. Before considering the amendments introduced by the Communique, it is worthwhile to refer to the general framework and past amendments on this subject.

As a principle, authorized signatories of the companies must be registered before the trade registry office in which the company is registered to. During the registration period, the trade registry offices require sample signatures of the authorized signatories be submitted as signature declarations. In the past while the signature declarations were allowed to be issued before notary offices, a regulation was made by The Law Amending Certain Laws to Improve the Investment Environment (“Law”) numbered 7099 published in the Official Gazette on 10 March 2018 which amends 2nd paragraph of Article 40 of Turkish Commercial Code numbered 6102. Pursuant to this Law, it became mandatory to issue the signature declarations of the authorized signatories only before the trade registry offices. While this regulation introduced by Law aimed all transactions related to the establishment of companies be made before trade registry offices, it caused many difficulties in practice especially in terms of authorized representatives residing in foreign countries as they were able to issue their signature declarations before notary offices or Turkish consulates before the aforesaid amendment.  In order to overcome these difficulties in practice, another communique was published in the Official Gazette on 17 April 2018 which enabled authorized representatives resident in foreign countries to issue their signature declarations before Turkish consulates. Since this regulation was not sufficient to overcome the problems in practice and also considering that some Turkish consulates refrained to issue signature declarations, one more communique was published in the Official Gazette on 22 July 2020 and enabled the signature declarations be also issued before the competent authorities as per legislation of that country and afterwards be legalized through Turkish consulate or in accordance with the provisions of Convention Abolishing the Requirement for Legalisation for Foreign Public Documents.

After all these numerous amendments, the Communique seems to have solved the mentioned problems. The Communique sets legal ground for submitting signature declarations of the authorized signatories of companies electronically without having to visit the trade registry offices. Accordingly, an integration process has been started with the relevant public institutions and organizations in order to realize this regulation. Until the integration process is completed, the signatories who do not have a signature record in the database shall submit their signature declarations to the trade registry offices physically.

Moreover, the Communique also clarifies where the signature declarations could be issued. According to the amendment, the authorized signatories of the companies would be able to issue signature declarations either before notary offices or trade registry offices. The signature declarations of authorized signatories residing in a foreign country can be issued by having those signature declarations legalized by the Turkish consulate in that country or by the competent authorities pursuant to the legislation of that country. The signature declarations issued by foreign competent authorities must be legalized through Turkish consulate or in accordance with the provisions of Convention Abolishing the Requirement for Legalisation for Foreign Public Documents and be submitted to the trade registry office along with its notarized Turkish translation.

As per the Communique, in cases where the signature record cannot be obtained electronically in the registration of the establishment of limited liability companies, the physical signature declaration must be issued only in the trade registry offices. Apart from the establishment of limited liability companies, it will be possible to issue all the signature declarations through notary offices or trade registry offices with the new regulation.

In brief, the amendments introduced by the Communique adopts the old practice which allowed the signature declarations be issued before notary offices. Furthermore, when the abovementioned electronic system becomes operational, it seems that it will be possible to establish a company without visiting the trade registry offices for issuing signature declarations.