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What is Current Account According to Turkish Commercial Code?

05.10.2017

1- WHAT IS CURRENT ACCOUNT?
Current account agreement means that two persons may withdraw from requesting their receivables, arising from a legal cause and result, one by one or separately and may request the amount remaining after itemizing them as debts and credits. A current account agreement must be performed in writing. Otherwise, it shall not be valid.

2- WHAT ARE THE PROVISIONS OF CURRENT ACCOUNT AGREEMENT?
On condition that article 134 and clause 2 of article 143 of the Turkish Code of Obligations are reserved, these are the provisions of current account agreement.
2.1- Unless otherwise consented upon, parties do not lose their rights to sue and right of defense related to recording credit/debit in current account and agreement or transaction causing the credit/debit of parties. If agreement or transaction is terminated, items originated from them should be charged off.
2.2- If a credit originated before current account agreement is recorded in current account by the consent of parties, this credit will not be regarded as “renewed” unless otherwise consented upon.
2.3- Recording a commercial paper in current account should be done on condition that the amount is received.
2.4- Balance which is determined by the decision of the referee and identified after deduction of credit from debit at the end of every fiscal period should be entered to an account as a separate item in the new fiscal period. If the agreement is terminated or remaining amount is confiscated, it should be paid.
2.5- Interest should be accrued for the amounts written in credit column of current account after their registration in accordance with agreement or business practices.

3- USAGE OF COMMERCIAL PAPERS
Commercial paper which is written in current account but its fee is not collected should be given back to its owner and its record in current account should be deleted.

4- FEE ORIGINATED FROM COMMISSION AGREEMENT
Current account agreement between parties does not pose an obstacle to demand the fee originated from commission agreement and all kinds of expenses.

5- SHOULD CREDITS BEING OUT OF ACCOUNT BE RECORDED IN CURRENT ACCOUNT?
Uncollectible receivables and credits generated from money/goods that is given in order to spend purposefully or remain at the disposal.

6- WHAT IS BALANCE ACCORDING TO TURKISH COMMERCIAL CODE?
In accordance with agreement or commercial principles, cycle account should be closed at the end of a certain fiscal period and difference between debit items should be determined.

7- UNDER WHICH CIRCUMSTANCES IS A BALANCE REGARDED THAT IT IS ACCEPTED BY THE PARTIES?
Unless there is an agreement related to fiscal period or a commercial principle, the last day of every calendar year should be regarded as a closing date by the parties. The party who receives the detected increasing schedule will be regarded that he/she accepts the balance if he/she raises an objection via a notary, with registered letter, telegram or a writing with a secure electronic signature within one month after he/she receives it.

8- UNDER WHICH CIRCUMSTANCES SHOULD THERE BE CHARGED INTEREST TO CURRENT ACCOUNT?
There should be charged interest to the balance which is obtained by deducting debit items from each other after it is determined and registered into account. A practice causing compound interest shouldn’t be performed; agreements going against this provision cannot be accepted.

9- WHICH PROVISIONS CAN BE DETERMINED WITH COMPOUND INTEREST AND AGREEMENT?
Parties are able to decide to add the interest to the capital whenever they demand (on condition that it shouldn’t be less than 3 months). Furthermore, they are also able to determine the amounts of fiscal periods, interests and commissions.

10- WHAT IS INTEGRITY PRINCIPLE?
Credits and debits recorded in current account are an inseparable whole. None of parties will be regarded as a creditor or a debtor before current account is balanced. Legal status of parties will be determined with balanced current account at the end of the agreement.

11- UNDER WHICH CIRCUMSTANCES SHOULD CURRENT ACCOUNT AGREEMENT BE TERMINATED?
Current account agreement should be terminated under these circumstances;
11.1- Expiry date of assigned time
11.2- Termination notice of one of parties (in the event that they haven’t agreed on a certain time)
11.3- Bankruptcy of one of parties

12- WHAT SHOULD BE DONE IN CASE OF THE DEATH OF ONE OF PARTIES?
If the agreement is periodical and one of parties dies or restricted within that period, parties with their successors and their legal representatives have a right to terminate current account agreement on condition that they declare it 10 days in advance. However, payment of remaining amount can be made at the closing date according to article 94.

13- UNDER WHICH CIRCUMSTANCES CAN CURRENT ACCOUNT BALANCE BE SEQUESTRATED?
13.1-
Remaining amount should be calculated by closing the account when creditor of one of parties sequestrates his/her remaining balance.
13.2- In this case, if the party given a notification about sequestration because of debits does not release sequestration within 15 days, the other party may terminate the agreement. If not, situation of the person who proceeds the sequestration cannot be made heavier by recording new items in current account.
13.3- Creditor who proceeds the sequestration may demand to collect the amount corresponding to his/her credit from credit balance and also can collect it according to article 94 at the same time.

14- WHEN DO CURRENT ACCOUNTS LAPSE AND WHAT ARE THE CONDITIONS FOR IT?
Cases related to interest claims or remaining amounts accepted or determined with court decision, calculation errors, items which should be kept out of current account or recorded unrightly in current account, repetitive accounts can lapse 5 years after the termination of current account agreement.

Source: Turkish Commercial Code

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Rules and Procedures in Regard to Preparing Consolidated Financial Statements

04.10.2017

What are Consolidated Financial Statements?
What are the Rules and Procedures in Regard to Consolidated Financial Statements?

Consolidated Financial Statements: Financial information presentation (in which the assets, equity, liabilities, and operating accounts of a company can be seen) and its subsidiaries are combined and shown as belonging to a single reporting entity.

These are the rules and procedures in regard to preparing consolidated financial statement;

– Financial statement items of a group company should be aggregated separately.
– Goods and service sales done between group companies are deducted from gross sales and cost of sales. Profit and loss generated from purchase and sale done within group should be eliminated also by applying it to corrected parallel stocks.
– Income and expense items generated from transactions done within the group are eliminated from each other like amortizations, interests and dividends.
– “Allowance for taxation on current period profit and other legal liabilities” related to all consolidated partnerships should be involved in consolidated financial statements.
– Profit belonging to non-community shares of community’s shareholders should be presented as “Minority Shareholders’ Profit and Loss” and as a discount item in financial statement.

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Be Careful While Paying or Getting Money!

03.10.2017

As stated below;
1- First and second class merchants,
2- The one whose commercial earnings is acquired on simple earnings basis,
3- Farmers who have to keep book,
4- Freelancer,
5- Artisan who is exempt from tax are supposed to certify commercial transactions carried out between themselves and receipts and payments valuing at more than 7.000 TL collected as goods and service charge from customers with documents prepared by banks, related finance institutions or postal authorities.

Source: Communique on Tax Procedure Law

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What are the Features of One Man Company?

02.10.2017

The features of one man company:
1- With the New Turkish Commercial Code, it is possible to establish one man company.
2- One man company can be established during incorporation (at the beginning) or after the incorporation.
3- Board of Directors may consist of one or more than one person.
4- The sole owner constitutes Board of Directors. It is an obligation that decisions should be written in order to be valid.
5- The agreements between the sole owner and the company should be written. By comparison, the provision related to self-work will be applied in this case.
6- Furthermore, one-man limited companies are also subject to the same provisions.
7- Shareholder cannot become indebted to the company unless he/she discharges his/her debts originating from capital subscription and, company’s profits with its free reserves and retained losses correspond.
8- There can be one-man Board of Directors. Member(s) of the Board does not have to be shareholder(s). Moreover, persons except shareholders can be Member of Board.
9- If the number of shareholders reduces to 1 or the company turns into multi-partnership, Board of Directors should confirm it by making decision.

Source: Turkish Code of Commerce

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If a Legal Entity Becomes a Partner during Incorporations, What Should be Done?

30.09.2017

Legal entities can be assigned to the Board of Directors in Corporations and Limited Companies; however, real person(s) representing legal entities cannot be assigned as a Member of Board or a Director. If a legal entity is assigned, there should be a real person assigned as a representative.

There should be participation decision made by a legal entity. This participation decision should be notarized; furthermore, capitalization and its representative should be stated.

Source: Turkish Code of Commerce

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What is the Liquidation Process in Corporations?

29.09.2017

If the following conditions are fulfilled, Corporations will go into liquidation.
1- Despite of expiry, unless Corporation virtually stays in business and the business hasn’t been turned into indefinite period and anticipated period of time in articles of incorporation expires.
2- If the field of operation actualizes or the actualization becomes impossible.
3- If one of sunset clauses stated in articles of association takes place.
4- With the general assembly resolution in accordance with 3rd and 4th clauses of article 421.
5- If there is a decision to go into liquidation.
6- Conditions anticipated by laws.

Source: Turkish Code of Commerce

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What are the Conditions for Reengagement in Work According to Turkish Laws?

28.09.2017

1- WHAT ARE THE RESPONSIBILITIES OF THE EMPLOYER WHO WOULD LIKE TO TERMINATE LABOR AGREEMENT?
The employer who would like to terminate labor agreement is supposed to;
1.1- Submit a written declaration about the termination,
1.2- State the reason of termination clearly,
1.3- Pay all the rights, which are generated because of termination, in the termination date.

2- WHAT SHOULD BE DONE IF THE LABOR AGREEMENT IS TERMINATED WITHOUT A VALID REASON?
If the labor agreement is terminated with an invalid reason or without a reason, employee is able to demand reengagement in work and invalidity of termination.

3- WHAT ARE THE CONDITIONS FOR REENGAGEMENT IN WORK?
In order to take advantage of the conditions for reengagement in work;
3.1- There should be at least 30 employees working in the relevant office,
3.2- Employment period of the employee whose labor agreement is terminated should be at least 6 months,
3.3- Employee should go to the court within 1 month after the termination date.

Source: Labor Law

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Is It Possible to Sequestrate Bank Accounts of a Person Who Cannot Pay SSI Premium Debts in Turkey?

27.09.2017

1- IS IT POSSIBLE TO SEQUESTRATE BANK ACCOUNTS AND CLAIMS (FROM THE THIRD PERSONS) OF A PERSON WHO CANNOT PAY SSI PREMIUM DEBTS?
It is possible to sequestrate debtor’s bank accounts, salary, fees, rental incomes and all claims from the third persons by issuing notice of levy.

2- WHAT IS THE PROCESS OF SEQUESTRATION OF DEBTOR’S CARS AND HOW ARE THEY DISQUALIFIED FROM DRIVING?
Debtor’s cars, which are registered by Security General Directorate, are sequestrated by Social Security Institution by examining them electronically and they are also disqualified from driving.

Source: SSI

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Which Labor Relations are not subjected to Provisions of Labor Law in Turkey?

21.09.2017

Work and labor relations listed below are not subjected to provisions of Labor Law;
1- Household works
2- Every kind of building operations related to agriculture within the borders of family economy
3- Sea and air transport,
4- Establishments and work places related to agriculture and forestry where 50 or less than 50 workers are employed
5- About apprentices on condition that occupational health and safety provisions are reserved
6- Sportsmen/sportswomen
7- In workplaces where 3 workers are employed in line with article 2 of the Merchants and Craftsmen numbered 507
8- Handicrafts works done at home between a family’s members and second and third degree relatives without employing anyone out of family/relatives
9- People who are rehabilitated

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Can a Journalist Work in more than one Newspaper in Turkey?

20.09.2017

1- CAN A JOURNALIST WORK IN MORE THAN ONE NEWSPAPER?
A journalist is free to work in other works, whether they are related to press or not, unless indicated otherwise in the agreement made between journalist and employer. 

2- HOW CAN A JOURNALIST TERMINATE LABOR AGREEMENT?
A journalist has a right to terminate labor agreement on condition that he/she submit a written notice at least one month ago.

3- ARE JOURNALISTS SUBJECTED TO PROBATION PERIOD?
Probation period for journalists who enter this profession for the first time is maximum 3 months.

4- SHOULD SERVICES THAT ARE NOT STATED IN LABOR AGREEMENT BE CHARGED IN ADDITION?
A journalist have a right to get a fee for works by the employer that are not stated in labor agreement or for newspaper article/columns that are ordered or excepted to issue.

5- SHOULD AN EMLOYER PAY SALARY TO JOURNALIST DURING HIS MILITARY SERVICE?
If a journalist joins the army for his military service, he will get half of his last salary during his military service.

Source: Press Law

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