LAW 300
Commercial Law
Glossary of Legal Terms

Association: dernek
 Code: kanun
 Commercial enterprise: ticari işletme
 Cooperative: kooperatif
 Customary rule: örf ve âdet hukuku kuralı
 Economic enterprise: iktisadi işletme
 Foundation: vakıf
Glossary of Legal Terms
General Partnership: kollektif şirket
 Interpretory rule: yorumlayıcı kural
 Limited Liability Company: limited şirket
 Mandatory rule: emredici kural
 Mechant: tacir
 Ordinary Partnership: âdi şirket

Glossary of Legal Terms

Partnership with Limited Liability: komandit şirket
 Presumption: karine; varsayım
 Principal: asil; müvekkil; temsil olunan
 Stock Corporation: anonim şirket
 Tradesman: esnaf
 Tradesman business: esnaf işletmesi
Development of Commercial Law

In Turkish Law the first Commercial Code
was enacted in 1850. In 1926 another
Commercial Code was accepted. The latter
was enacted in 1957 and applied until 2011.
In January 2011 new Commercial Code is
accepted. It came into effect in June 2012.
The Scope of Commercial Law

What kind of relationships and transactions
should be involved by commercial law?
 The answer to this question is rather
political than theoretical.
 It is the law making body of a country that
decides which issues should be included in
commercial law, and which ones in other
branches of law.
The Scope of Commercial Law

A certain relationship or transaction can be
regulated in commercial code in one
country, during the same issue is covered
by, for example, civil code or code of
obligations.
 Some countries do not have a separate
commercial code (for example,
Switzerland).
The Scope of Commercial Law

Example:
 Ordinary Partnerships are handeled by CO
in Turkey and Switzerland; but by CC in
Germany.
 In Turkey, provisions relating to (Joint)
Stock Corporations belong to ComC; but in
Switzerland to CO.
Hierarchy of Commercial
Provisions
1.
2.
3.
4.
5.
Mandatory rules of ComC. (Art. 14/1).
Contracts (Art. 8/1).
Interpretory rules of ComC. (Art. 10/1).
Commercial customary rules (applicable
only for merchants).
General rules of CC (Art. 1 CC).
Commercial Enterprise (TCC
art.11)
economic
enterprise
tb
commercial
enterprise
ee – ce = tradesman business
Requirements for Commercial
Enterprise
1.
2.
3.
4.
Profit oriented aim.
Continuity.
Exceeding a Certain Size Limit.
Independence.
Head Office - Branch

Every commercial enterprise must have a
head office. Principal place of business is
the place from where all the commercial,
administrative, financial and legal affairs of
a commercial enterprise are organized and
conducted.

Branch is a unit of a commercial enterprise
and it functions under the authority and
directions of the head office. In order to
qualify as a branch, the unit should be
independent from head office in its dealings
with third parties. Branch must be able to
conduct and run the business falling within
the objective of the commercial enterprise.

Branch should have its own management
and accounting.
Commercial Enterprise Pledge

Under Turkish law, in order to establish a
pledge over moveable assets, physical
possession of such assets shall be transferred
to the pledgee in order to perfect the pledge.
However, in the case of a commercial
enterprise pledge, pursuant to Article 4 of the
Commercial Enterprise Pledge Law numbered
1447 and dated July 21, 1971 ("Law No.
1447") a pledge agreement shall be executed
by the pledgor and pledgee.

The pledge agreement is required to be
notarised by a Turkish Notary Public
located at the same district where the
commercial enterprise subject to pledge is
registered and be registered with the Trade
Registry therein.

Parties to the Pledge Agreement
 Article 2 of Law No. 1447 states that
commercial enterprise pledge agreement
can be executed by and between the credit
institutions having legal entity, cooperatives
and credit sale institutions having real or
legal entity and the real persons or the legal
entities owning the commercial enterprise
subject to pledge.

Scope of the Pledge
 Pursuant to Article 3 of Law No. 1447, a
pledge registered over a commercial
enterprise constitutes an encumbrance over
the following:
 The trade name and commercial title;
 The machinery, equipment, tools and
transportation vehicles that are allocated to
the operation of the commercial enterprise,
as of the date of registration of the pledge;
and
 Intellectual property rights, like licences,
trademarks, models, drawings, etc.

However, one or more of the above
mentioned elements other than the trade
name, commercial title and the moveable
operational equipments, can be excluded
from the scope of the pledge.
 A commercial enterprise pledge does not
include real property on which the
commercial enterprise is located. In order to
establish a mortgage over the said real
property, a particular mortgage agreement is
required to be executed between the pledgor
and the pledgee.

REGISTRATION OF THE PLEDGE
 Pursuant to Article 4 of Law No. 1447, a
pledge agreement shall be entered into
between the pledgor and pledge. The pledge
agreement must be prepared by a Turkish
Notary Public located at the same district
where the commercial enterprise is
registered; the assets which are within the
scope of such pledge should be listed in the
pledge agreement.

The pledge agreement must be registered
with the relevant Trade Registry where the
commercial enterprise subject to pledge is
registered.
 As per Article 5 of Law No. 1447, the
commercial enterprise pledge shall be
effective as of the date of registration with
the Trade Registry.

FORECLOSURE
 Lex Commissaria Prohibition is also applicable
to commercial enterprise pledges; in other
words, any kind of arrangements regarding the
transfer of the title of any of the assets included
in the pledge is null and void.
 If the pledgor does not pay its debts when due,
the pledged assets shall be sold and the pledgee
shall receive its receivables from the sale
proceeds. Pursuant to Article 17 of Law No.
1447, the provisions of the Turkish Execution
and Bankruptcy Law related to foreclosure
procedures shall apply.
Transfer of Commercial
Enterprise

Under the currently applicable laws,
“transfer of commercial enterprise” concept
is governed by Turkish Code of Obligations
numbered 6098 (“TCO”). According to
Article 202 of the TCO, in case the “whole
of an enterprise” is transferred including all
assets and liabilities thereof, the transferee
automatically becomes liable for the debts
of the said enterprise,

starting from date of the notice to the
creditors or the publication of newspaper
advertisements to that effect. Transferor is
liable for two years for the debts of the
company which occured before transfer.

In addition, there is a complementary
provision under Turkish Labour Law
numbered 4857 (“TLL”). As a general rule
of the Turkish Labour Law, the employees
of a business place are automatically
transferred and become the employees of
the new employer, when such business
place is transferred to a new owner, who
will keep the business running.

Theoretically, in order to qualify an asset
transfer as a “transfer of business” or
“transfer of commercial enterprise”, it is
necessary for the transferee to obtain the
entirety of such business or a separable
(stand-alone) part of a business (“line of
business”) including all assets and liabilities
thereto

Validity condition
 It must be written and registered in
Commercial Registry and also announced.
MERCHANT
Real Person Merchant
(TCC art.12)
Legal Person Merchant
(TCC art.16)
1- Commercial Companies
Stock Corporation (A.Ş.); Limited Liability
Company (Ltd.Şti.); General Partnership
(Koll.Şti.); Partnership with Limited Liability
(Kom.Şti.); Cooperatives (Koop.)
2- Foundations and Associations that operate a
commercial enterprise. But the associations
and foundations which are registered as
beneficial to public welfare do not acquire the
status of merchant.
Real Person Merchant

Merchant is the person who even partially
operates a commercial enterprise in his/her
own name.
 A legal representative who manages a
commercial enterprise in the name of
another person (principal) is not deemed a
merchant. In case of representation the
principal is the merchant, even if he/she is
minor or under inderdiction or commission.

A person who has announced to the public,
that he has established a commercial
enterprise either trough circulars,
announcements, radio advertisements,
newspapers, letters or who has registered
his enterprise in the commercial registrys is
considered merchants, even though he did
not effectively start to manage the
enterprise. This rule is accepted to protect
the good faith of third parties who have
believed in this announcement.

If a person managing a commercial
enterprise does not have capacity to act, the
legal representative is not considered a
merchant, but the minor underguardianship
is a mercant. But the legal repr. is liable of
the penalty provisions.
 A person whose profession does not allow
managing a commercial enterprise, such as
a civil servant, is considered a merchant
when he manages a comm. ent. and he will
be liable as merchant.
Consequences of being a merchant

*commercial firm name
 *register in commercial registry in 15 days
starting from opening date (art.40)
 *bankruptcy
 *due diligince expected from a careful and
prudent businessman
 *an invoice must be issued by the mercant
upon sale of a product or providing a
service (art.21)
 * letter of confirmation (art.21)

* a merchant providing service concerning
his commercial enterprise has the right to
request an appropriate fee for his
performance (art.20)
 * special rules for sale contracts are
regulated in art. 23.
 *the notices and announcements among
merchants to put each other in default or
annul the contract shall be made by notary,
registered mail, telegram or secured elect.
Sign.
Commercial Transactions
Importance:
 The qualification of the legal nature of a
transaction is of great importance to
determine the scope of commercial law.
 The commercial transactions fall into the
scope of Commercial Code, during the noncommercial (ordinary) transactions are
governed by Turkish Code of Obligations
and Turkish Civil Code.
Criteria for Commercial Transactions
1.
2.
3.
Any transaction governed by Commercial
Code (ComC art.3).
Any transaction and act that is related with
a commercial enterprise.
Presumption for commercial transaction:
a.) Any obligation that is undertaken by a
real person merchant is a commercial
transaction.
Exception: If the merchant explicitly
declares that the transaction is not related
Criteria for Commercial Transactions
with his/her commercial enterprise, or the
circumstances do not support this
presumption, the transaction is deemed an
ordinary one.
b.) Any contract that is of commercial
nature for one of the parties is a
commercial transaction, unless the
contrary is provided by law.