With the Communiqué Amending the Communiqué on Procedures and Principles Regarding the Application of the Provisional Article 13 of the Turkish Commercial Code (“Communiqué”) published in the Official Gazette numbered 31288 and dated October 28, 2020, limitations on dividend distribution have been extended until December 31, 2020.
Following to the Communiqué, obtaining the approval of the Ministry of Trade will be mandatory to distribute advance dividends and certain exceptions regarding dividend distribution will apply to advance dividend distributions.
With the Law on Reducing the Effects of Coronavirus on Economic and Social Life numbered 7244 published in the Official Gazette numbered 31102 and dated April 17, 2020, the Provisional Article 13 was included in the Turkish Commercial Code numbered 6102 (“TCC”) stipulating that:
- Stock companies are prohibited from distributing any dividend exceeding twenty-five percent of the net profit for the fiscal year 2019 until September 30, 2020. Accordingly, Board of Directors cannot be authorized to distribute any dividend for the mentioned period.
- The companies, more than 50 % capital of which are directly or indirectly owned by the state, special provincial administration, municipality, village, other public legal entities, or funds, more than 50 % capital of which are owned by the state, are exempted from such limitation.
Ezgi Ceren Aydoğmuş