Joint stock companies have two governing bodies, namely the general assembly and the board of directors. While the general management of the company is under the responsibility of the board of directors; the general assembly on the has certain exclusive duties, which cannot be delegated to the board or another corporate body. Amendment of the articles of association, increase or decrease of the share capital and appointment and dismissal of the board members are among those duties. Board resolutions are taken with the directors’ votes, whereas the general assembly resolutions are taken with the shareholders’ votes.
According to the Turkish Commercial Code each share grants at least one voting right to its holder. Agreements among and between the shareholders or shareholders and a third party, which provide for one or several shareholders to or not to vote for one direction or to abstain are voting agreements. Voting rights are not transferred with the voting agreements, but the parties to such a voting agreement commit to vote according to such agreement. Voting agreement may clearly determine how the voting right will be used or may stipulate that the voting right will be used pursuant to the instruction to be addressed before the general assembly meeting. It can either be a unilateral or a bilateral agreement.
It must be noted that the relevant company is not a party to the voting agreement; therefore, the parties cannot have any claim against the company with respect to the commitments under the agreement. In other words, a resolution, which has been adopted against the instructions provided for in a voting agreement is a valid resolution and the party to the said agreement will only be entitled to claim damages from the defaulting party.