Levent Mah. Şakayıklı Sok. No:6 Beşiktaş/İstanbul

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CORPORATE LAWLiabilities of Joint Stock Company and Limited Liability Company as Merchant Trader under Turkish Commercial Code

Ocak 31, 20230

The term “merchant trader” is very essential in commercial law practice in Turkey. In many cases, one of the parties claim that the other party is a merchant trader so obliged to comply with some provisions of Turkish Commercial Code (“TCC”) in this capacity.
And sometimes, the provisions of first book of TCC may be disregarded by mistake. First book of TCC is on “commercial enterprise” and includes provisions on “merchant trader”. Merchant trader may be a natural person (TCC art. 12) or a legal person (TCC
art. 16).

It is stipulated in article 16 of TCC that “commercial companies” are deemed as merchant. “Commercial companies” are composed of general and limited partnerships, joint stock and limited liability companies and cooperatives (TCC art. 124). So, joint stock companies and limited liability companies are merchants in the sense of article 16.

Now, let’s try to outline the liabilities of joint stock companies and limited liability companies as merchant trader under TCC (Law numbered: 6102 – OG 14/2/2011,27846).

Consequences of being a merchant trader (joint stock company and limited liability company):
1) A merchant is subject to bankruptcy for any debt (TCC art. 18/1).
2) A merchant is obliged to choose a business name in accordance with law (TCC art.18/1). Every merchant is obliged to undertake all transactions of his enterprise bybusiness name and sign all the bills and documents of his enterprise under business name (TCC art. 39/1). Registered business name shall be written somewhere of enterprise so as to be seen and read. All commercial letters written by merchant concerning his enterprise and all documents on which commercial books are based shall have registry number and business name of the merchant, main office of enterprise and if the merchant trader is under obligation to establish an internet site, the address of it (TCC art. 39/2).
3) A merchant is obliged to register his enterprise into trade registry (TCC art. 18/1). Every merchant shall register and publish his enterprise and chosen business name into the trade registry of main office of enterprise after fifteen days following the opening
of enterprise (TCC art. 40/1).

4) Every merchant has to keep the commercial books determined under this Code (TCC art. 18/1).
5) Every merchant must act as a prudent businessperson in all his commercial undertakings (TCC art. 18/2).
6) The debtor who is a merchant trader cannot request from judge to reduce a fee or a contractual penalty claiming that the fee or contractual penalty is excessive in the situation which described in Turkish Obligation Code Article 121 (2), 182 (3) and 525
(TCC art. 22/1).
7) Between merchant traders; default notice, notice to terminate a contract, notice to revoke a contract shall be made either via notary, via a registered letter, via telegram or registered electronic e-mail for which secured electronic signature is used (TCC art. 18/3).
8) A merchant may be requested to provide an invoice and indicate any paid amounts on it to a person to whom the merchant sold a product or provided a service or any interest (TCC art. 21/1). A person shall be deemed to have accepted the content of an invoice if he does not object it in eight days following the receipt of it (TCC art. 21/1).
9) A merchant’s all debts (and transactions) are deemed as commercial undertakings (TCC art. 21/1). The disputes (and non-contentious matters) are commercial disputes (and commercial non-contentious matters) when the dispute concerns the commercial enterprise (commercial company) of both parties (TCC art. 4/1). Unless otherwise provided by law, regardless of the value of the dispute, commercial court has jurisdiction for all commercial disputes and commercial non-contentious matters (TCC art. 5/1). For those commercial disputes whose objective is payment of a sum of money or compensation and indicated in Article 4 of this Code or in other laws, application to a
mediator before proceeding is a cause of action (TCC art. 5A/1). Two or more persons shall be liable jointly and severally when they undertake a debt together against a third person for a commercial undertaking (either for one of them or all of them) unless otherwise provided by law or contract. (TCC art. 7/1).
10) If the goods sold is defected and the defect can be clearly seen during the delivery, the buyer notify the seller of the defect in two days. If the defect cannot be clearly seen during the delivery, the buyer is obliged to inspect or to have inspected the goods in eight days and if any defect is discovered, the buyer shall notify the seller of the defect in the same eight days to be able to protect his rights (TCC art. 23/1-c).
11) Interest rate may be determined freely in commercial undertakings (TCC art. 8/1-c). In the event that the parties have not determined default interest rate, the creditor may demand default interest to be calculated on advance rate which is announced by The Central Bank of the Republic of Türkiye.

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