Expulsion of a Shareholder from a Limited Company: Conditions, Lawsuit and Challenging the Expulsion Decision

By what routes can a shareholder be expelled from a limited company?

A general assembly decision based on the articles of association

Article 640/1 of the Turkish Commercial Code (TTK) allows the general assembly to decide on expulsion when the grounds stated in the articles of association have materialized. The current articles of association and their amendments are examined first; it is investigated separately whether the ground for expulsion was in fact agreed, whether it was validly adopted and whether it has materialized in the specific case. It is wrong to treat a side agreement signed only between the shareholders as equivalent to an expulsion clause in the articles of association. [1]

The articles may provide, for example, for the loss of a particular professional qualification or for breach of a defined confidentiality obligation. Such a ground is not required in every case to reach the weight of a just cause on the court route; however, the provision and its application must comply with the law, the requirement of equal treatment and the rule of good faith. Şahin’s assessment in the literature emphasizes that no power of expulsion without cause can be granted and that the power to decide cannot be left to a manager or to a single shareholder. An abstract clause such as “if the majority sees fit” does not confer an unlimited power of exclusion. [1, 5]

The later addition of a ground for expulsion is particularly important: TTK 621/3 requires unanimity at a meeting at which all shareholders representing the share capital (esas sermaye) are present. The current majority cannot first add a provision aimed at the dissenting shareholder and then expel that shareholder by bypassing this condition. The adoption date of the provision, the amendment minutes and the registration documents should be checked at the start of the file. [1]

Asking the court for expulsion on just cause

The absence of an applicable ground for expulsion in the articles does not close the judicial route. TTK 640/3 reserves the company’s right to apply to the court for expulsion on just cause. Here, facts of a weight that makes continuing the membership intolerable in the specific case are required. The general assembly’s describing a conduct as “just cause” does not bind the court; the event, its effect on the partnership relationship and the other side’s explanation are examined. [1]

The transfer of company secrets to a competitor, the systematic diversion of company opportunities to another business, or conduct that seriously disrupts the partnership order may be subject to examination. However, not every dispute, lawsuit, request for information or vote against the majority is a ground for expulsion. Exercising the right to seek legal remedies must be distinguished from abuse intended to harm the company. Because expulsion also affects the shareholder’s property rights, it must rest on specific and verifiable facts. [1, 2]

Which distinctions are decisive in assessing just cause?

Whether the shareholder is also a manager matters. The managers’ duties of care, loyalty and non-competition are regulated in TTK 626; the other shareholders’ duties of loyalty and confidentiality are regulated in 613. The activity of a shareholder who is not a manager in another business cannot be treated as an automatic ground for expulsion without examining the contractual non-competition clause and the duty of loyalty. By contrast, the transfer of secrets or the unlawful steering of the company’s customers is assessed separately. [1]

For the allegation that the shareholder “does not come to the workplace,” the basis of the duty to work, manage or perform ancillary obligations must first be shown. The conduct of a shareholder who has merely contributed capital, who does not work regular hours like an employee, is not the same as that of a manager who persistently neglects the duty he or she has assumed. The fact that no financial loss has yet materialized does not in every case prevent a request for expulsion either; the serious danger and the deterioration in the partnership relationship must be substantiated. Being indebted to the company, on the other hand, does not end membership without examining the existence of the debt and the gravity of the conduct. [1]

In the proportionality review, the duration of the breach, its repetition, its effect on the company’s activities and whether it could be remedied by more limited measures matter. If restricting the manager’s power of representation can solve the problem, it must be explained why this would be insufficient. That said, there is no general statutory step system that in every case requires a warning, removal from office and a damages action, in that order. A link must be established between the concrete danger of loss and the legal route chosen.

What majority is required for an expulsion decision; may the shareholder vote?

Votes and capital majority are calculated together

For decisions within TTK 621/1-h, at least two-thirds of the votes represented and the absolute majority of the entire share capital carrying voting rights are required together. It is not enough to look at the majority of those attending the meeting. Valid aggravations in the articles of association, the structure of the voting right and which expulsion route the decision concerns are also checked. The 2026 exception concerning applications to court by two-shareholder companies is explained separately below. [1, 2]

Hypothetically, in a 60–25–15 percent structure in which votes match the capital proportions and all shareholders attend, the affirmative vote of the 60 percent shareholder alone is not sufficient: although more than half of the total capital is exceeded, two-thirds of the votes represented at the meeting has not been reached. If the 25 percent shareholder also votes in favor, 85 percent is reached and the two statutory thresholds are met. This calculation does not cure defects in the notice and agenda or the absence of a ground for expulsion.

Do not treat the vote of the shareholder to be expelled as automatically void

TTK 619 provides for certain voting prohibitions concerning the discharge (ibra) of those in management, the company’s acquisition of its own shares and the approval of activity that breaches the duty of loyalty or the non-competition rule. An expulsion decision is not expressly listed in this article. Therefore, the shareholder’s vote and capital share cannot be left out of the calculation by saying “a decision is being taken about the shareholder personally.” [1]

Although there are different interpretations in the literature, the prevailing approach reported in Alhan’s 2026 study is that the voting right of the shareholder whose expulsion is sought continues. The existence of a contrary view does not justify applying the voting prohibition as an undisputed rule of law. If a discharge or competition-consent decision and the expulsion vote are on the same agenda, the voting regime of each decision must be assessed separately. [6]

What did the 2026 Constitutional Court decision change for two-shareholder companies?

By its decision of 25.12.2025, E.2025/128, K.2025/273, the Constitutional Court annulled TTK 616/1-h and the wording in 621/1-h concerning an application to the court for expulsion on just cause, with respect to limited companies with two shareholders. The decision was published in the Official Gazette (Resmî Gazete) No. 33199 dated 17.03.2026. Since the provision did not postpone the entry into force, the annulment took effect on that date under Article 153 of the Constitution. [2, 8]

The Court’s reasoning focuses in particular on structures with equal shares, or in which the shareholder wishing to apply is in the minority, where the other shareholder’s vote can block the application. The inability to reach the expulsion route that could keep the company going was found problematic from the standpoint of effective remedy and freedom of enterprise. An action for dissolution of the company does not provide the same protection, because in that action the person whom the court may decide to remove is the shareholder who seeks dissolution on the conditions set out in the rule. [2]

The limits of the annulment matter in practice at least as much as its consequence:

• In a two-shareholder company, the former approach that made applying for expulsion on just cause dependent on the annulled general assembly decision and qualified quorum condition cannot be maintained as it was.

• The part of TTK 621/1-h concerning the general assembly itself deciding on expulsion directly, on a ground provided in the articles, has not been annulled. The quorum for this decision in a company with two equal shareholders has not been eliminated by the Constitutional Court decision.

• The provision in TTK 640/3 concerning the company’s request remains in force. The annulment cannot be read as granting every shareholder, in all companies, an unlimited personal right to bring an expulsion action.

• No general exemption from this annulment can be derived for the general assembly’s application decision and the related quorum in companies with three or more shareholders. [1, 2]

In two-shareholder companies, the standing of the person applying and the representation of the company must be separately reasoned after the decision. Alhan argues for the shareholder’s direct application in line with the purpose of the annulment; this is an interpretation in the literature. The petition should address together the scope of the Constitutional Court decision, the remaining text of TTK 640/3, the powers of representation and the conflict of interest. In particular, where the targeted shareholder is the company’s sole representative, the representation problem cannot be regarded as solved on its own. [1, 2, 6]

From where does the three-month period for challenging an expulsion decision run?

Annulment of an expulsion decision based on the articles of association

Under TTK 640/2, the expelled shareholder may bring an annulment action within three months of the decision being communicated through a notary. The challenge here is exercised by filing a lawsuit in court; sending an e-mail to the manager or serving a counter-notice through a notary does not replace the lawsuit. The period is preclusive (hak düşürücü). The notarial documents, the service record and any allegation of defective service must be examined together. The consequences of a notification made defectively should not be assessed on the same assumption as the absence of notarial notification. [1]

The special provision grants the right of action to the expelled shareholder; the conditions of the general annulment regime, namely attending the meeting, voting against and having the dissent recorded in the minutes, cannot automatically be applied in a way that extinguishes this right. Even so, having objections clearly recorded at the meeting constitutes important evidence in a dispute over the application of the contractual provision and the accuracy of the facts. [1]

Other general assembly decisions and a court judgment are different

Under the general annulment regime in Articles 445 and 446, applied through the reference in TTK 622, the three months run from the date of the decision. The persons who may sue and the dissent conditions are assessed together with exceptions such as an irregular notice or the obstruction of attendance. The notarial starting point specific to an expulsion decision is not automatically carried over to a profit distribution, the election of a manager or another decision taken at the same meeting. The decision to apply to the court should also not be confused with the expulsion decision that directly ends membership. [1]

Against a court’s expulsion judgment under TTK 640/3, by contrast, it is not the action in TTK 640/2 but the applicable regime of appeal (istinaf) and appeal to the Court of Cassation (temyiz) that comes into play. Moreover, not every violation gives rise to nullity or non-existence. Serious defects within TTK 447 must be distinguished from grounds for annulment; the three-month period must not be allowed to lapse on the thought that “the decision is invalid anyway.” [1, 3]

Against whom and in which court is the lawsuit filed?

In the statutory design of an action for expulsion on just cause, the plaintiff is the company and the defendant is the shareholder whose expulsion is sought. In the annulment of a general assembly decision based on the articles of association, the plaintiff is the expelled shareholder and the defendant is the company; a suit directed only against the other shareholders who voted in favor does not satisfy this distinction. For two-shareholder companies, the post-Constitutional Court discussion of the right to apply and of representation is assessed within the special framework above. [1, 2]

The dispute is a commercial case arising from the TTK; the competent court is the commercial court of first instance. In these disputes arising from the partnership relationship, the exclusive jurisdiction of the court of the place where the company’s registered office is located applies under HMK 14/2. Where there is no commercial court, the court that will hear the case in that capacity is designated. Powers of attorney given on behalf of the company, signature authorities and any conflict of representation must also be examined. [1, 3]

A claim solely for expulsion or for annulment of a general assembly decision is not a money claim whose subject is a sum of money. If a withdrawal compensation (ayrılma akçesi), damages or another money claim is also sought, mediation as a condition precedent to litigation under TTK 5/A, the nature of the claim and whether the claims are raised together must be assessed separately. It should not be assumed that preparation for the action concerning status makes the mediation review unnecessary for the money claim. [1]

If no prior general assembly decision was taken, is the case necessarily dismissed?

In companies with three or more shareholders, the requirement of an application decision continues. Although the legal nature of the deficiency is debated in the literature, judicial practice shows an approach treating it as a condition of action that can be completed. The peremptory period and warning given under HMK 115 are important; preparation for the case should not be left incomplete in reliance on being able to take the required decision later. [1, 3, 7]

In the decision of the 11th Civil Chamber of the Court of Cassation dated 06.05.2025, E.2024/5228, K.2025/3124, the lower court had set a peremptory period for submission of the general assembly decision. Because the submitted minutes rejected the expulsion request, the deficiency was not cured and the dismissal on procedural grounds was upheld. This decision shows that curing a procedural deficiency differs from the company’s adopting the application. However, the dispute concerned a company with two equal shareholders and predates the Constitutional Court annulment; it cannot be used as a precedent applying the old obstacle unchanged to two-shareholder companies today. [2, 7]

How are the procedural route, time limit and evidence checked together?

This table does not mean that a single document determines the outcome. For example, the loss of a customer does not by itself prove that the shareholder steered the customer unlawfully. The timeline, correspondence, customer relationships and financial movements must be assessed together. Under HMK 190, the parties prove the facts from which they derive a favorable result; evidence obtained unlawfully cannot be taken into account under HMK 189/2. [3]

The following documents are useful for an initial review:

• The current articles of association, all relevant amendments, and the share and representation records.

• The meeting notice, agenda, attendance list, signed minutes and vote breakdown.

• Notarial notifications, service documents, formal notices (ihtar) and the replies to them.

• A timeline for each allegation showing the date, the act, the person concerned and the effect on the company.

• Correspondence, contracts, and bank and accounting records obtained lawfully; the permissions given and the counter-statements.

• For the withdrawal compensation, financial statements, significant assets and liabilities, and any existing valuation work.

How are shareholder rights and the company protected while the case is pending?

Filing a lawsuit does not by itself stop the implementation of the expulsion decision. In an action to annul a general assembly decision, a stay of execution can be requested under TTK 449. In an action for expulsion on just cause, the interim injunction conditions under HMK 389 and following are examined. The special provision in TTK 638/2 for the withdrawal action should not be carried over unexplained to the expulsion action. [1, 3, 5]

The request must show which act would cause serious harm, why waiting is not possible and how the chosen measure would remove this danger. Prima facie proof and, where necessary, security come into play. Instead of suspending all shareholder rights without limit, a measure suited to the dispute and the risk should be justified. [3]

Removal from the position of manager or restriction of authority falls under TTK 630; the shareholder’s own request to leave under 638; and the company’s dissolution on just cause under 636, each with different consequences. The end of the managerial post does not eliminate the share. The dismissal of an expulsion request does not dissolve the company either; requests and conditions concerning other legal consequences are assessed separately. [1]

What happens to the expelled shareholder’s share and withdrawal compensation?

Expulsion is not an uncompensated confiscation of the share. Under TTK 641, the departing shareholder has the right to demand a withdrawal compensation (ayrılma akçesi) corresponding to the real value of the share in the share capital. The nominal share capital amount and the company’s current economic value may differ. The allegation that the company has suffered loss does not automatically reduce the withdrawal compensation to zero either; the existence and amount of a counterclaim and the conditions for set-off or offsetting are examined separately. [1]

The arising of the right and the maturity of the payment are separate. TTK 642 sets conditions linked to available equity, the transferability of shares and, where necessary, a capital reduction. Available equity is not merely the money in a bank account. The ranking of the unpaid portion after other creditors should also be considered. Therefore it cannot be said that the entire compensation will be paid unconditionally on the day every expulsion decision becomes final. [1]

For money claims whose amount cannot be determined at the outset, the current procedural regulation matters: Law No. 7589, which entered into force on 31.07.2026, repealed HMK 107 and added to HMK 109/4 the possibility of a one-time increase in a partial action until the end of the investigation. The transitional provision on indeterminate-claim actions filed earlier is reserved. Therefore old lawsuit templates should not be used without checking the filing date and the type of claim. [4]

The information and documents provided are handled with regard to the rules on professional secrecy and the protection of personal data, within the scope of the legal assessment and the service undertaken. The secure channel for sending documents should be learned from the firm. Initial contact or sending documents does not mean that the matter has been accepted.

In connection with this subject, the articles on a shareholder’s voluntary withdrawal and the withdrawal compensation of an expelled shareholder may also be consulted.

Conclusion

Choosing the right route for expelling a shareholder from a limited company is as important as proving the ground. The contractual expulsion must be distinguished from the court route, and the special period running from the notarial notification from the general annulment period running from the date of the decision. For two-shareholder companies, the 2026 Constitutional Court decision removed the old obstacle to applying but did not change all the expulsion provisions. When the articles of association, the number of shareholders, the vote calculation, the powers of representation, the notifications and the financial documents are reviewed together, both the continuation of the company and the defense and property rights of the shareholder whose expulsion is sought can be assessed soundly.

Frequently Asked Questions

Can a 51 percent shareholder expel the other shareholder alone?

51 percent alone is not sufficient for every decision. The contractual ground for expulsion, the voting ratio at the meeting and the two thresholds in TTK 621 are assessed together. For two-shareholder companies, the Constitutional Court annulment applies separately with respect to applying to the court; this exception does not remove the quorum for a general assembly’s direct decision to expel.

I learned of the expulsion decision by e-mail; has the three-month period started?

TTK 640/2 ties the special period to notification through a notary. Learning by e-mail is not the same as this starting point. However, whether notarial documents exist and whether the service is valid must be examined. Because the annulment period for other decisions at the same meeting may start from the date of the decision, waiting creates risk.

What can be done if the articles of association contain no expulsion clause?

Expulsion by the court on just cause is possible. The absence of a contractual clause does not close this route; however, a specific just cause, the correct party structure and the application procedure according to the number of shareholders in the company must be shown.

Is asking the company for information or filing a lawsuit a ground for expulsion?

Using the statutory means of obtaining information and seeking legal remedies is not by itself a ground for expulsion. The alleged abuse must be specified and proven separately. Dissent within the company cannot be equated with a serious breach of loyalty.

Is a shareholder removed as manager also out of the company?

No. The managerial post and the status of shareholder are different. Even if the managerial post ends, shareholding and the related rights and obligations remain subject to their own legal regime until a valid withdrawal or expulsion takes place.

If the expelled shareholder owes a debt to the company, is the value of the share wiped out entirely?

It is not wiped out automatically. The withdrawal compensation and the company’s counterclaim are determined separately. Proof of the debt, the time of payment and the conditions for set-off or offsetting are assessed; the economic value of the share cannot be eliminated merely by invoking the ground for expulsion.

Sources

1. [1] Turkish Commercial Code No. 6102, in particular Articles 4, 5, 5/A, 445–449, 613–614, 616, 619, 621–622, 626, 630, 636, 638 and 640–642. Ministry of Trade institutional text.

2. [2] Constitutional Court, 25.12.2025, E.2025/128, K.2025/273; Official Gazette, 17.03.2026, No. 33199. Full scan of the Official Gazette decision, Lexpera republication.

3. [3] Code of Civil Procedure No. 6100, in particular Articles 14, 115, 189–190 and 389–390. Ministry of Justice institutional text.

4. [4] Law No. 7589 on Amendments to Certain Laws for the Effective and Efficient Functioning of the Judiciary, in particular Articles 19–20 and provisional Article 1/10. Text adopted by the Turkish Grand National Assembly.

5. [5] Şahin, Ayşe (2012). “Withdrawal and Expulsion of a Shareholder in a Limited Company” (Limited Şirkette Ortağın Ortaklıktan Çıkması ve Çıkarılması). Marmara University Faculty of Law Journal of Legal Research (Marmara Üniversitesi Hukuk Fakültesi Hukuk Araştırmaları Dergisi), 18(2), 851–858. Full text.

6. [6] Alhan, Yunus (2026). “Assessment of the Deadlock Problem in Two-Shareholder Limited Companies in the Light of the Constitutional Court Decision of 25/12/2025, E.2025/128, K.2025/273” (İki Ortaklı Limited Şirketlerde Kilitlenme Sorununun Anayasa Mahkemesinin 25/12/2025 Tarihli E.2025/128, K.2025/273 Sayılı Kararı Çerçevesinde Değerlendirilmesi). Constitutional Jurisdiction (Anayasa Yargısı), 43(1), 159–210. Full text.

7. [7] Court of Cassation, 11th Civil Chamber, 06.05.2025, E.2024/5228, K.2025/3124. Full decision, AvEvrak republication.

8. [8] Constitution of the Republic of Türkiye, Article 153. Constitutional Court legislation page.