The General Directorate of Domestic Trade (“General Directorate”) has recently issued a circular with respect to the Law on Amendments to the Customs Law and Other Laws and Statutory Decrees (“Law”) dated April 11, 2013 and numbered 6455. This circular was issued since Article 80 of the Law has amended Article 397 of the Turkish Commercial Code numbered 6102 (“TCC”).
Pursuant to the fourth clause of Article 397 of the TCC, corporations which shall be subject to independent audit have been determined under the Resolution of the Council of Ministers dated January 23, 2013 (“Resolution”). However, there were no provisions under the TCC regarding the corporations which do not fall under the scope of independent audit set forth under the Resolution.
As a result, there was uncertainty regarding audit procedures of corporations which were not subject to independent audit under the TCC and the Resolution. In order to bring clarity to this matter; Article 80 of the Law has amended Article 397 of the TCC.
Pursuant to Article 80, a fifth and sixth paragraph have been added to Article 397 of the TCC. The newly added fifth paragraph of Article 397 provides that the corporations which do not fall under the scope of the Resolution shall also be subject to independent audit. Accordingly, the Council of Ministers shall publish a regulation to determine the principles and procedures of such audit, the qualifications of the auditors, the ethical principles, duties and authorities of the auditors and appointment, dismissal and resignation of the auditors. Given that such a regulation has not yet been issued by the Council of Ministers, these corporations remain not subject to an independent audit.
Having said that, the General Directorate has advised the trade registries that corporations which do not fall under the scope of the Resolution shall not take any resolution during their general assembly meetings regarding election of an auditor until the abovementioned regulation has been issued.
Therefore, in line with the advice of the General Directorate, the trade registries shall refuse to register such decisions to appoint an auditor which is taken during the general assembly meetings of these corporations until the abovementioned regulation has been issued. The reasoning behind this advice of the General Directorate relies on the provisions under Article 27 of the Trade Registry Regulation which provides that, the trade registry records shall reflect the truth, be genuine and not contrary to public order. In light of this provision, the General Directorate rightfully advises the trade registries to refuse the applications filed by these corporations to register their independent auditors, given that there is no applicable legislation at the moment regulating the principles and procedures of these auditors.