Transfer of Shares in Public-Closed Joint Stock Companies

According to Turkish Commercial Code there should be at least 5 shareholders in Public-Closed Joint Stock Companies and suppression of shares is not necessary/not mandatory.


1- Transfer of uncertificated (bare) securities

As there is no obligation in non-public companies to issue shares, uncertificated (bare) securities can be subject to transfer like shares. As a matter of fact, the acquisition of the capacity of shareholder in joint stock companies does not depend on the issuance of shares.

There is no explicit provision in the Turkish Commercial Code, related to the transfer of bare securities. However, this is not an obstacle to the transfer of bare securities. Accordingly, bare securities can be transferred according to the provisions on the transfer of claims (Code of Obligations, art.162). The Court of Appeal also indicated in its various decisions that the transfer of bare securities is possible. Bare securities can be transferred with the transaction of transfer of claims made in writing and which has a disposing nature. The transaction must be made in writing, otherwise the transfer of the bare securities will not be realized.

The transfer of non paid-up or partially paid-up shares corresponds to the commitment of a liability by the transferee. Namely there is a transaction of transfer of debt (Code of Obligations, art.173) and the approval of the joint stock company is required for the transfer. For this, the firm can also claim a guarantee from the purchaser. The fact that the share is to the bearer, nominative or certificated nominative does not change the result.


A share ledger must be kept for uncertificated securities. As a matter of fact, even concerning bare securities, for the transfer to be asserted against the firm (for participation to the general shareholders’ meeting, receiving dividends etc. financial and managerial partnership rights)  the only way is to register the share on the share ledger. The Court of Appeal also has the same view.

If the transfer of the uncertificated securities is to be made, it must be made by way of transfer of claim, as indicated above. If the said deed of assignment is to be drawn up by a competent authority abroad, it must bear an apostille.

2. Transfer of nominative shares

Nominative shares are qualified as valuable papers and as a rule, shares are nominative (Turkish Commercial Code art.409/2). A regulation to the contrary can be made in the articles of association. Part of the shares can be nominative, while others to the bearer. It is possible to convert shares to the bearer into nominative shares and nominative shares into shares to the bearer (Turkish Commercial Code art.410). It can be regulated in the firm’s articles of association whether shares will be nominative or to the bearer. In such a case, the nature of shares can be changed without requiring an amendment of the articles of association.

A nominative share is legally a promissory note. As a matter of fact, by law (Turkish Commercial Code art. 416/2) the transfer of share is realized with endorsement and passage of possession. Accordingly, a nominative share  cannot be transferred, without delivery of the share to the transferee, only with a deed of assignment written on a separate paper. The Court of Appeal is of the same opinion.
The delivery of the shares, in other words, the passage of possession to the transferee is very important. Otherwise, ownership will not pass on to the transferee. As a matter of fact, according to the provision of art.557 of the Turkish Commercial Code, the right contained in the share certificate is documented and cannot be transferred without a document.

What is important is the will of passage of the ownership to the other party and the competence of the person realizing the transfer. What is essential here is the preservation of the will of the parties, but, of course in terms of evidence law, it is useful for the nominative share to be delivered effectively. 

For the transfer to be effectual against the firm, it must be registered on the share ledger. Apart from establishment and capital increase, the firm cannot register shares ex officio to the share ledger. The said point must be followed up by concerned persons and especially the transferee of the shares.  


The registration to the share ledger has not a founder effect but a notifying effect. By the way, it will be appropriate to speak about the quality of the share ledger. The share ledger is compulsory but is not subject to notary certification but to statement (Turkish Commercial Code art.66, 69). It is kept by the Board of Directors and registration is made according to the decision of the Board of Directors. If there are differences between the share ledger and the list of participants, according to the Court of Appeal, the list of participants will be taken into consideration. For this reason, it is important that firms act with diligence when preparing the list of participants.

3. Transfer of shares to the bearer

Shares to the bearer can be transferred only with delivery. According to the provision of article 415 of the Turkish Commercial Code, the notification of the transfer to the firm or its registration is not necessary.

4. Transfer of the certificates

A certificate is a provisional document given to shareholders in replacement before the issuance of shares, and which are considered as securities (Turkish Commercial Code art.411). Even if the document is provisional, the partnership rights conferred by the certificate are permanent. There is no requirement related to form of certificates, regulated explicitly in the law. Therefore, they must be drawn up according to art.413 of the Turkish Commercial Code. As a matter of fact, as they are drawn up as substitutes of shares, they are subject to the same requirements in terms of form. However, together with the issuance of shares by the firm, certificates become null and void. Upon issuance of shares by the firm and their delivery to shareholders, certificates lose validity even if they remain in the hands of shareholders, even if no annulment annotation has been made, and even persons with good faith will not be protected.

It is not compulsory for firms to issue certificates. Certificates can be nominative or to the bearer. Certificates to be issued as a substitute of nominative shares can be nominative; and certificates to be issued as substitutes for shares to the bearer can be nominative or to the bearer. However, no shares to the bearer can be issued for totally paid-in shares.

It is clearly indicated in art. 411/1 and 2 of the Turkish Commercial Code that certificates are issued as substitutes to shares. Hence, it is explicitly regulated that certificates and shares are identical.

Nominative certificates issued as substitutes of nominative shares can be transferred like nominative shares. Accordingly, transfer can be realized by delivery with a deed of assignment or endorsement and registration to the share ledger. On the other hand, nominative certificates issued as substitutes to shares to the bearer are transferred according to the provisions of the transfer of claims. Namely, transfer by endorsement is not possible. For the transfer of shares to be effectual against the firm, notification (to the firm) is required (Turkish Commercial Code art.411/2). According to us as well, transfer of shares realized in this way must be registered to the share ledger.

On nominative certificates issued as substitutes of nominative shares, just like nominative shares, the amount of capital paid-in against document must be indicated. In this way, the unpaid part will be understood. According to art.419 of the Turkish Commercial Code, a person acquiring a nominative share which is not totally paid-in will be responsible for paying the remaining amount to the firm, upon registration to the share ledger and pay the secondary debts, if any. Here, we must point out that if there are unpaid shares, we must not think that only the new owner will be responsible for these amounts. The said point can be possible only if the firm consents to the fact that the new owner assumes the debt. Otherwise, the transferor shareholder will continue to be responsible and may subsequently refer to the new owner for this.

If the share of capital is totally paid-in, certificate to the bearer issued in replacement of a share to the bearer can be transferred like a share to the bearer. Namely, with the delivery (passage of possession) transfer will be realized (Turkish Commercial Code art.559). As a matter of fact, no special form of transfer is foreseen by the law for those certificates, because the law foresees that the share is paid-in and in return a certificate is issued and considered delivery (passage of possession) as sufficient.