The right to withdraw from a limited liability company is regulated under Article 638 of the Turkish Commercial Code (“TCC”) numbered 6098. This article provides shareholders with two primary avenues for withdrawal. The first is when the company's articles of association provide for a right of withdrawal and set specific conditions for it. In this case, shareholders may leave the company when the conditions specified in the articles of association are met. Secondly, shareholders can apply to the court for withdrawal if there are just causes.
These two methods aim to regulate the process of shareholders leaving the company, thereby protecting the rights of the shareholders while ensuring the continuity of the company. Additionally, according to Article 639 of the TCC, a shareholder for whom one of the specified reasons has occurred is also entitled to join a withdrawal lawsuit filed by another shareholder.
1. Withdrawal for Just Cause
The right to withdraw from the company for just cause, as regulated under Article 638/2 of the TCC, allows shareholders to apply to the court for withdrawal under certain circumstances. It is not necessary for this right to be stipulated in the company's articles of association. A just cause is generally a situation that makes it impossible to continue the partnership relationship or renders it intolerable for the shareholder. These situations may arise from the company's operations or from the personal relationships between the shareholders. The key factor is that these reasons seriously undermine the sustainability of the partnership relationship. Whether or not the exiting shareholder is at fault is not decisive in determining the existence of a just cause; in other words, shareholders may request withdrawal from the company for just cause without the need to prove fault.
2. Scope of Just Cause and Judicial Decisions
Although the TCC does not explicitly define just causes, some situations are considered just causes. For example, Article 245 of the TCC qualifies situations such as “a shareholder betraying the company in its management affairs or the calculation of accounts” or “a shareholder failing to fulfill their primary duties and obligations” as just causes. However, these situations are exemplary, and the existence of a just cause must be assessed based on the specific circumstances of each case.
In a decision by the 11th Civil Chamber of the Gaziantep Regional Court of Justice, claims such as hostility among shareholders, obstruction of the right to information and inspection, and the failure to hold general meetings for a long time were examined. The court ruled that the hostility among the shareholders was not severe enough to make the continuation of the partnership objectively intolerable and rejected the plaintiffs' claims for withdrawal based on just cause. This decision illustrates that the concept of just cause is narrowly interpreted and not every disagreement constitutes just cause.
In another decision by the 43rd Civil Chamber of the Istanbul Regional Court of Justice, disputes among shareholders and the absence of decisions regarding profit distribution in the company were examined. The court stated that the failure to distribute profits alone does not constitute just cause and that more serious reasons are required for the partnership to become intolerable. This decision underscores the importance of objective criteria and the specific circumstances of the case in determining just causes.
Decisions by the Court of Cassation also provide significant precedents regarding withdrawal for just cause. In a case before the 11th Civil Chamber of the Court of Cassation, the high court ruled that situations such as a shareholder being excluded by the other shareholders and being prevented from participating in important company decisions constitute just cause. The court stated that if the trust relationship among the shareholders is damaged and the continuation of the partnership is no longer possible, the request for withdrawal is justified.
3. Severance Payment
One of the most important rights of shareholders requesting withdrawal from a limited company for just cause is the severance payment. The severance payment is the amount calculated based on the real value of the exiting shareholder's share in the company. This payment is made upon the transfer of the partnership share or the acceptance of the withdrawal request. According to Article 642 of the TCC, the payment of the severance payment is related to the transfer of the exiting shareholder's capital share in the company and is determined by considering the financial situation of the company.
In a case reviewed by the 11th Civil Chamber of the Gaziantep Regional Court of Justice, the court concluded that the failure to distribute profits does not constitute just cause, and the shareholders' right to information was not obstructed. Additionally, it was stated that the acquisition rate of the company's main capital shares was 20%, and a severance payment could not be requested beyond this rate. As a result, the court ruled to reject the withdrawal request and, consequently, the payment of the severance payment.
In a decision by the 43rd Civil Chamber of the Istanbul Regional Court of Justice, the shareholders' severance payment requests were also evaluated. The court found that the failure to distribute profits alone did not constitute just cause and that the shareholders' withdrawal requests were not based on just causes, thereby rejecting the severance payment requests. These decisions demonstrate that severance payment requests are directly related to the existence of just causes and are evaluated based on the specific circumstances of each case.
4. Conclusion and Evaluation
Withdrawal from limited companies for just cause is possible due to serious and objectively identifiable issues arising from the company's operations or the personal relationships among shareholders. In determining just causes, each case should be evaluated by considering the personal characteristics of the shareholders, the structure of the company, and the specific circumstances of the situation. The court decisions provide guidance on how just causes are interpreted and which situations are accepted as just causes.
The severance payment is the amount calculated based on the real value of the exiting shareholder's share in the company and is associated with the acceptance of withdrawal requests for just cause. In this context, it is evident that severance payment requests are evaluated based on the specific circumstances of each case, and the courts conduct detailed examinations in this regard.
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