Commercial Law

Commercial law, which serves a wide range of areas from company formation to liquidation, and from the drafting of commercial contracts to the resolution of disputes, holds indispensable importance in today’s business world. As Akdemir Law Firm, we provide our clients with comprehensive consultancy and advocacy support in the field of commercial law.

1.1 What is Commercial Law?

1.1.1. What is Commercial Law?

1.1.1 Definition / Tanım Commercial law is a branch of private law that regulates the activities of commercial enterprises, the relationships between merchants, and commercial transactions. Having attained the regulations required by modern commercial relations with the entry into force of the Turkish Commercial Code No. 6102, this field contains unique rules distinct from civil law.

Commercial law regulates the establishment, operation, transfer, and termination processes of commercial enterprises, while also covering subjects such as commercial contracts, negotiable instruments, intellectual property rights, and commercial disputes. This branch of law has a structure that constantly evolves and renews itself to adapt to the dynamic nature of the business world.

1.1.2 Fundamental Principles of Commercial Law for Companies

The principles forming the basis of commercial law ensure that commercial life operates securely and fairly:

· The Principle of Expediency (Hızlılık): Presumes that commercial transactions be carried out without loss of time; therefore, shorter statutes of limitation and expedited trial procedures are adopted.
· The Principle of Trust (Güven): Ensures that parties can transact by trusting one another. This principle protects third parties acting in good faith.

· The Principle of Freedom (Serbestlik): Foresees that parties can freely enter into contracts and establish companies of their own will.
· Protection of the Customer: An essential part of modern commercial law, aiming to guarantee consumer rights.
· Transparency and Disclosure: Obliges commercial enterprises to provide regular and accurate information regarding their financial status and activities.

1.2 Types of Contracts in Commercial Law

Sale and Purchase Agreements: The most common type, regulating the transfer of ownership of goods and the payment of the price.

Commission Agreements: Regulates transactions where a person acts in their own name but on behalf of another.

Agency Agreements: Regulates the relationship where a merchant continuously acts as an intermediary or salesperson for another merchant in a specific region.

Commercial Mandate (Power of Attorney): Regulates the appointment of a proxy by a merchant for commercial business.

Franchise Agreements: One of the most common modern types, where a business owner opens their brand and business model to others in exchange for specific fees.

1.3 Audit Obligations

The Turkish Commercial Code stipulates comprehensive audit obligations to ensure transparency.

Independent Audit: Mandatory for companies of a certain size to evaluate whether financial statements comply with international standards.

Internal Control Systems: Boards of directors are obliged to establish internal control mechanisms to manage risks and protect company assets.

Accounting and Bookkeeping: Every merchant is required to maintain commercial books in accordance with legal requirements, which serve as critical evidence in potential disputes.

1.4 Relationship Between Employment Law and Commercial Law

While Commercial Law regulates the structure of companies and merchant relations, Employment Law regulates the relationship between employer and employee.

Status of Managers: Managers may be subject to a duty of care and loyalty under the Commercial Code while simultaneously holding “employee” status under the Labor Law No. 4857.

Non-Compete Clauses: Important in both fields; they can be stipulated for partners/managers (Commercial) and employees (Employment).

Protection of Trade Secrets: Employees are obligated to protect trade secrets learned during their tenure; breaches may lead to both civil and criminal liability.

1.5 Types of Liability for Companies

In commercial policy, liability types vary according to their nature and diversity. Unlimited liability applies to limited partners in ordinary limited partnerships and partners in general partnerships. These partners are liable for company debts with all their personal assets.

Limited Liability: Applies to shareholders of Joint Stock Companies (A.Ş.) and partners of Limited Liability Companies (Ltd. Şti.), who are liable only up to the amount of capital they have contributed.

· Unlimited Liability: Applies to partners in collective companies and active partners in limited partnerships (komandite ortaklar), where they are liable for company debts with their entire personal assets.

Liability of the Board of Directors: Board members may be held liable to the company, shareholders, and creditors if they culpably violate obligations arising from the law or the articles of association.

1.6 Key Legal Concepts in Commercial Relations

Merchant (Tacir): A person who operates a commercial enterprise in their own name.

Commercial Enterprise (Ticari İşletme): An organized structure including tangible and intangible elements such as goodwill, trade name, trademarks, and patents.

Trade Name (Ticaret Unvanı): The name used by a merchant in commercial activities, protected as a personal right.

Commercial records and ledgers are critical for documenting commercial activity. Maintaining commercial ledgers properly is not only a legal requirement but also provides the opportunity for them to serve as evidence in case of disputes. Commercial records kept electronically have the same legal value as printed ledgers.

Unfair Competition (Haksız Rekabet): Prohibits acts contrary to the rules of honesty, such as deceptive advertising or disparaging a competitor’s products.

1.7 Performance Obligations in Contracts

In commercial contracts, performance obligations require both parties to properly fulfill their undertakings. Performance means the complete and timely execution of the obligation agreed upon in the contract. While performance in commercial law is subject to the general rules of civil law, it also includes some specific regulations.

Delivery Obligation: The seller must deliver the goods in the agreed manner, time, and place.

Payment Obligation: The primary debt of the buyer; failure to pay on time may entitle the seller to legal interest or rescission of the contract.

Warranty Obligation: The seller’s guarantee that the goods are free from defects.

Duty to Inform: Parties are obliged to illuminate and provide necessary information to the counterparty.

1.8 Types of Lawsuits and Procedures

Performance Actions (Eda Davaları): Where the performance of an obligation is requested.

Declaratory Actions (Tespit Davaları): Aimed at determining the existence or non-existence of a legal relationship.

Constitutive Actions (İnşai Davalar): Aimed at creating, changing, or terminating a legal status (e.g., cancellation of a contract).

Commercial Courts: These cases are heard in Specialized Commercial Courts of First Instance (Asliye Ticaret Mahkemeleri) and generally follow an expedited procedure.

The evidence system in commercial law involves significant differences. The use of commercial ledgers as evidence, the acceptance of electronic records, and specific regulations regarding witness testimony distinguish commercial cases from other types of litigation. The principle of reciprocal acceptance of commercial records as evidence is a crucial part of the law of proof.

1.9 Alternative Dispute Resolution (ADR)

Arbitration (Tahkim): Especially common in international trade; offers confidentiality, speed, and expertise.

Key advantages of arbitration include confidentiality, speed, and expertise. Arbitration proceedings are conducted behind closed doors, and the decision is not publicly announced. It also yields results more quickly than court proceedings. The parties can choose expert arbitrators, leading to more accurate decisions on technical matters.

Mediation (Arabuluculuk): A method where a third party helps the parties reach an agreement; often required as a cause of action in commercial disputes in Türkiye.

The institution of conciliation can be applied both in and out of court. In commercial disputes, parties are encouraged to resolve their disputes by mutual agreement. Conciliation saves on litigation costs and helps preserve the relationship between the parties.

Settlement Agreements (Sulh): Contracts where parties end their dispute through mutual concessions.

1.9 Frequently Asked Questions About Commercial Law

What is the retention period for business ledgers?

According to the Turkish Commercial Code (TTK), commercial books and related documents must be kept for ten years, starting from the calendar year following the year to which they relate. This period may vary depending on tax legislation.

What are the responsibilities of a limited company partner?

Shareholders in a limited liability company are liable for the company’s debts only to the extent of their capital contribution. However, this principle of limited liability ceases for shareholders who fail to fully fulfill their capital contribution obligation.

Are commercial contracts required to be in writing?

In commercial law, contracts are generally subject to freedom of form. However, for pledge agreements, guarantee agreements, and some special types of contracts, a written form is required. Nevertheless, for ease of proof, it is recommended that commercial contracts be in writing.

What is the duty of care of a company director?

Board members and directors must perform their duties with the diligence of a prudent businessman. This includes not only acting in accordance with the law, but also taking all necessary measures to protect the company’s interests.

What is the statute of limitations for commercial disputes?

The statute of limitations for receivables arising from commercial transactions is five years. However, shorter periods are stipulated for certain special cases. For example, this period is four years for receivables arising from the proceeds of a sale.

What is the importance of commercial registry records?

The commercial register is an official registration system that holds information about commercial enterprises and companies. Information registered in the register enjoys public trust, and third parties can rely on these records when conducting transactions. Matters not registered in the register cannot be invoked against bona fide third parties.