Management in a simple partnership concerns how the partnership's affairs are carried on within the arrangement among the partners; representation concerns the conditions under which acts performed with third parties bind the partners. A partner being a manager does not mean that the partner may perform unlimited acts in every matter. Objecting to an act, limiting authority, ratifying an unauthorized act and remedying the loss are different legal instruments.
When a dispute arises, the first step is to review together the partnership agreement, the resolutions on the selection of the manager and the authority documents issued to the outside world. It should not be assumed that an internal message such as "this person is no longer authorized" automatically reaches the bank or the counterparty to a contract. The effects of the internal arrangement and of external representation must be tracked separately.
What is the difference between decision-making and management in a simple partnership?
Under Art. 624 of the Turkish Code of Obligations (TBK), unanimity is the basic rule for partnership decisions. If it has been agreed that decisions are to be taken by majority, the statutory provision that determines the majority by the number of partners is taken into account. It cannot be said that the partner with the larger contribution share can take all decisions alone as a matter of course.
TBK Art. 625, in turn, sets the management arrangement. Unless management has been left by contract or resolution to one or more partners or to a third party, all partners have the right to manage. This does not mean that all partners must necessarily sign again for every day-to-day act; the rules on acting and objecting where there are several managers apply separately.
How are ordinary and extraordinary matters distinguished?
The purpose of the partnership, the size of the matter, its customary activities and its economic effect are assessed. A routine purchase of materials and a significant investment that changes the subject of the business may not be of the same nature. Not only the amount of the act but also its duration and the risk it places on the partnership are important.
TBK Art. 625/3 takes as its basis the appointment of a general authorized representative and the unanimity of all partners for extraordinary matters; it also regulates the exception for the manager in cases where delay would be harmful. This exception does not permit unlimited authority to be exercised on every claim of urgency. Records showing the concrete harm of the delay and the necessity of the act performed should be preserved.
How is an act of the managing partner objected to?
If the partnership is managed by all partners or by several partners, each of them may act without the participation of the others. On the other hand, another partner authorized to manage may prevent the act by objecting before it is completed. This right of objection in TBK Art. 625/2 is not granted with the same scope to every partner who has no management authority.
The subject of the objection must be stated clearly: which supply contract, payment, purchase or offer is to be prevented? When the objection reached the addressee and when the act was completed are important. Dissatisfaction voiced afterwards is not the same as a timely objection to the act.
If the act has been completed, does the objection undo everything?
The effect of a completed act in external relations is assessed through the authority of representation and the position of the third party. A breach of the management rules may not lead to automatic invalidity against the third party if the act was performed within the scope of authorized representation. In the internal relationship, accounting, compensation or removal of authority may come into play.
For example, a requirement in the partnership agreement for two approvals for purchases above a certain amount may not by itself negate the effect of a broad authority document issued to the outside world. How the internal limit was reflected in the authority of representation, whether it was notified to the counterparty and what the counterparty knew are examined. For this reason, objecting to an act and withdrawing the authority of representation may require separate records.
How does the authority of representation arise and how far does it extend?
Under TBK Art. 637, a partner entrusted with management is presumed to have authority to represent the partnership or all the partners against third parties. However, for significant acts of disposition, an authority granted by the unanimity of all partners must be expressly stated in the authority document.
The general provisions on representation are also important. Under TBK Arts. 40–41, the questions to be answered are in whose name and for whose account the act was performed, what the content of the authority is and what was notified to the outside world. A partner acting in his or her own name and a partner acting in the name of all the partners produce different results.
| Subject | Question for the internal relationship | Question for the external relationship |
|---|---|---|
| Purchase of goods | Does it comply with the budget and the management limit? | On behalf of which partners did the authorized person sign? |
| Bank transaction | Is the partners' approval required? | Which signature arrangement was notified to the bank? |
| Significant disposition | Was unanimity obtained? | Is the act expressly included in the authority document? |
| Removal of authority | Are the legal ground and the decision procedure appropriate? | Has notice been given to the relevant third parties? |
| Loss | Is there a breach of duty and causation? | Does the act nevertheless bind the partners? |
Why should the signature document and bank authority be kept up to date?
If the partnership agreement, the representation document and the bank records reflect different periods, the authority dispute grows. That a partner has left management but former banking access continues creates problems for transaction security and liability. Changing the authority requires the documents and the access arrangement also to be updated by the authorized method.
In making this update, deleting records or obstructing the other partners' right to information is not correct. The transaction history should be preserved, the basis of the change of authority documented and the date on which each access was changed recorded. Closing technical access does not by itself replace a legally valid act of removing authority.
Does an unauthorized act bind the partners?
When a person acts in the name of others without authority of representation or exceeding that authority, TBK Arts. 46–47 come into play. Depending on ratification by the person represented, the act may bind that person. The counterparty may, by setting a reasonable period, request notice of whether ratification will be given; if there is no ratification within the period, the counterparty may be released from being bound by the act.
Ratification may be express or, depending on the concrete circumstances, may arise from implied conduct. Even so, not all silence is ratification. Knowing acceptance of performance, payment made and statements given afterwards must be examined in their own context. Who is the person authorized to ratify the act is also determined separately.
Who is liable if the act is not ratified?
In an act that is not ratified, the compensation liability of the unauthorized representative may come into play under the conditions of TBK Art. 47. Matters such as whether the counterparty knew or should have known of the lack of authority are assessed. This liability does not mean that the contract price will in every case be collected as such from the unauthorized representative.
In the internal relationship, a partner without authority conducting the partnership's affairs, or an authorized partner exceeding the limit, is connected with the provisions on agency without authority under TBK Art. 630. The binding effect of the external act, the benefit derived from the work performed and the calculation of the internal loss must be kept apart. More than one legal assessment may be required for the same event.
Under what conditions can management authority be removed or limited?
TBK Art. 629 provides that management authority granted to a partner by the partnership agreement cannot be removed or limited by the other partners without just cause. When there is just cause, each of the other partners may resort to removal or limitation of the authority, even if the agreement provides otherwise.
The statute gives as examples gross neglect of duty and the loss of the capacity necessary for good management. These examples should not be treated as a closed list. Events such as concealment of accounts, sacrificing the partnership's interest to personal interest, or continuous overstepping of authority are assessed to the extent of their seriousness and proof.
Does every commercial loss constitute just cause?
The business making a loss is not the same as the manager breaching an obligation. Market conditions, the timing of the decision taken, the information available and the duty of care must be examined. Not every commercial decision that turns out badly can by itself be characterized as a breach of duty.
A claim of just cause should be tied to specific events. Which record was requested, when was it not provided, which act was performed contrary to which limit and what was its effect on the partnership? Instead of an abstract statement of "I have lost my trust," a justification supported by dated documents is needed. The scope of the intervention should also be proportionate to its purpose; where limiting a particular authority is sufficient, removal of the entire management may be separately contested.
If the authority was granted outside the contract, does the same provision apply?
Cases where management arises from the statute, is granted later by partnership resolution or is left to a third party should not be forced into the same mold. How TBK Art. 629 applies to these cases has been debated in the doctrine. The source of the authority, the decision of the parties and the agency relationship are assessed together.
Atahan Güncan's 2025 study discusses the need to protect management authority irrespective of how it arose, and treating the general provisions together with partnership-specific rules in removing authority of representation. This doctrinal assessment should not be presented as statutory text or a binding court decision. In a concrete case, it must be reasoned which view and which route of claim are adopted.
How does the Court of Cassation assess a claim of just cause?
In its decision of 11.04.2023, E. 2022/5635, K. 2023/1088, the 3rd Civil Chamber of the Court of Cassation (Yargıtay 3. Hukuk Dairesi) examined a request to remove or limit management authority. The allegations raised concerning criminal proceedings, a ban and failure to provide information were assessed on the concrete file; the outcome of rejecting the request was upheld.
The decision shows that the examples of just cause are not exhaustive; however, the events alleged must be proven and the right must be exercised in accordance with the rule of good faith. Raising a previously known event after a long time may gain importance under concrete conditions. No fixed short period absent from the statute can be derived from this for all requests to remove authority.
The opening of a criminal investigation does not by itself establish a breach of duty. Likewise, the outcome of criminal proceedings should not be treated as a ruling that resolves all private-law issues in every case. The management obligation, the protection sought and the evidence in the file are examined within their own framework.
Does removal of authority mean expulsion from the partnership?
Removal of management authority does not by itself end a person's status as a partner. The partnership share, the right to information and the financial relationships may continue. Withdrawal or expulsion from the partnership is assessed under the different conditions of TBK Art. 633 et seq. Dissolution of the partnership for just cause is also a separate legal route under TBK Art. 639/7.
For this reason, the purpose of the claim must be clear: stopping a particular act, limiting the authority of representation, removing the management role, obtaining an accounting, remedying the loss or ending the partnership each produces different consequences. Requesting one does not mean that the others will be decided automatically.
When does a court decision or an interim injunction come into play?
The exercise of the authority in TBK Art. 629 and the court resolution of a dispute over its justification should be kept apart. It should not be assumed that a constitutive court decision is mandatory first in every case; on the other hand, it should not be said that a disputed notice finalizes all consequences. The nature of the concrete request and the legal interest are determined.
If there is a risk of serious loss due to delay, an interim injunction may be considered under Art. 389 et seq. of the Code of Civil Procedure (HMK). The scope of the injunction, prima facie proof, security and the effect on the operation of the business are addressed. A management dispute does not require all accounts to be frozen automatically or a manager to be appointed to a simple partnership as though it had a corporate organ.
How are information, accounting and a secure handover ensured?
TBK Art. 631 grants the partner who is not a manager, too, the right to obtain information on the conduct of affairs, to inspect the books and records and to take copies. Agreements that remove this right are void. The duty to render accounts at least once a year under TBK Art. 630 must also be observed separately. A management dispute is not a ground for shutting off financial information entirely.
| Preparation | Matter to be recorded | Purpose |
|---|---|---|
| Authority map | Agreement, resolutions and external authority documents | To determine the source of authority |
| Event file | Date, act, alleged breach and document | To make the just cause concrete |
| Notice | Addressee, scope and date of receipt | To reduce uncertainty |
| Handover of accounts | Bank, stock, debts and receivables and open matters | To continue monitoring the operation |
| Access arrangement | Authorized users and record protection | To ensure transaction security |
| External relationships | Necessary notice to bank, suppliers and customers | To make the current authority visible |
Under TBK Art. 42, failure to notify third parties of the withdrawal of an authority of representation previously notified to them may cause problems vis-à-vis third parties acting in good faith. The return of the authority document and the other provisions on the ending of external representation should also be examined. It is not enough to be content with messaging among the partners alone.
Related articles: Simple Partnership Agreement: Capital and Profit-Loss Sharing; Proving a Simple Partnership Without a Written Contract; Simple Partnership Debts: Liability, Lawsuits and Enforcement; Death of a Partner in a Simple Partnership and the Rights of the Heirs; Partner Who Does Not Render Accounts in a Simple Partnership and the Profit-Share Claim.
Conclusion
A management dispute in a simple partnership should be resolved while preserving the distinction among decision-making, internal management and external representation. A timely objection to an act, intervention in authority based on just cause and notice to third parties are different stages. A documented justification, a proportionate claim and an orderly handover of accounts help protect both the partners' rights and the continuity of the business.
Frequently Asked Questions
Can every partner stop the act of a managing partner?
The right to object before the act is completed under TBK Art. 625/2 is regulated with respect to partners authorized to manage. The information rights and other legal protections of a partner who is not a manager are assessed separately.
Can the managing partner sign all contracts alone?
The scope of the authority and the nature of the act must be examined. For significant dispositions, TBK Art. 637 contains the requirements of unanimity and express indication in the authority document.
Can a contract provide that management authority is irrevocable?
For management authority granted by contract, the possibility of removal or limitation based on just cause cannot be eliminated entirely. Whether the statutory conditions are met is assessed in the concrete case.
Is the partnership share also lost when authority is removed?
No. Management authority and partner status are different. Withdrawal, expulsion and dissolution have separate legal conditions.
Can a contract signed without authority later become valid?
If the authorized person or persons ratify it, the act may become binding. The existence and scope of ratification and who may give it are examined; not all silence is treated as ratification.
If the manager does not provide the records, do the other partners have a right to inspect?
Yes. The right to information and inspection under TBK Art. 631 is also granted to partners who are not managers. The scope of the request and its non-fulfillment are documented and the appropriate legal route is assessed.
Sources
- Law No. 6098, Turkish Code of Obligations, Arts. 40–48, 624–631, 633, 637 and 639.
- Law No. 6100, Code of Civil Procedure, especially Art. 106 and Art. 389 et seq.; Law No. 4721, Turkish Civil Code, Art. 2.
- Court of Cassation 3rd Civil Chamber, 11.04.2023, E. 2022/5635, K. 2023/1088. Access to the decision may require an account.
- Atahan Güncan, The Scope of Application of Article 629 of the Turkish Code of Obligations on Removal and Limitation of Management Authority, Dokuz Eylül University Faculty of Law Journal, 2025, Vol. 27, No. 2, pp. 1481–1518.