Who may bring a good-cause dissolution action?
Capital threshold, aggregation of shares and proof
Article 531 of the Turkish Commercial Code (TTK) grants the right of action to shareholders representing at least one-tenth of the capital in joint-stock companies that are not publicly held, and one-twentieth in publicly held joint-stock companies. The criterion is not the number of persons or voting power in the general assembly, but the proportion of participation in the capital. The legal status of public holding must be determined separately; it is not sufficient to look only at whether the company is traded on the stock exchange.
Shareholders may reach the required proportion together. Hypothetically, two persons holding four percent and six percent in a company that is not publicly held total ten percent. For them to sue together, their shareholding and their proportions of the total capital must be documented. The articles of association, current capital records, the share register, share certificates, transfer documents and, where necessary, the records of the Central Registry Agency (Merkezi Kayıt Kuruluşu) are assessed together. If the documents conflict, a person merely presenting themselves as a shareholder is not sufficient.
Share transfers during the action and a lower threshold in the articles of association
In legal scholarship there is a view that shareholding and the minimum capital proportion must be maintained throughout the proceedings. What procedural consequence a later loss of the threshold would have is discussed separately. For this reason, a share transfer, the departure of one of the claimants or a capital increase remains important even after the action is filed. No transaction should be undertaken on the assumption that a change in shareholding will not affect the file.
There is likewise no consensus on lowering the ten percent or five percent threshold through the articles of association. One view emphasizes the protection of the minority and the approach in TTK Article 411; the other, in view of the system of mandatory provisions in TTK Article 340, requires an express permission in Article 531. It cannot be said that a contractual provision containing a lower threshold is valid in every case. These discussions are explained with their opposing views in Karatepe Kaya's study.
In practice, a separate share chart can be prepared for the litigation file: each claimant's share, the acquisition document, capital changes and the latest position are tracked in the same chart. In this way, the objection to be raised against a capital increase on the allegation of abuse of rights and the threshold calculation in the dissolution action are not confused with each other.
Which events may constitute good cause?
The relationship as a whole matters more than a single dispute
TTK Article 531 does not contain a closed list of good causes. The assessment is made on the basis of the gravity of the event, its continuity, its effect on shareholder rights, and the structure and sustainability of the company. Continuous failure to provide information, exclusion of the minority from the company's functioning, granting privileged economic opportunities to the majority and use of company resources for the benefit of the majority may gain importance together. For each allegation, it should be shown who carried it out through which transaction and how it affected the claimant.
A company's making a loss does not by itself mean dissolution for good cause. A market contraction, a temporary liquidity problem or an investment that did not produce results may be assessed as part of commercial life. If it is alleged that the loss arises from a concealed transfer of benefits, from continuous mismanagement or from a situation that renders the company's purpose inoperative, its connection with the financial records must be established. Loss of capital and over-indebtedness, on the other hand, may give rise to obligations that must be assessed separately under TTK Article 376.
As to non-distribution of dividends, too, the passage of a certain number of years is not an automatic ground for dissolution. Distributable profit, statutory reserves, financing needs, investment decisions and the benefits the company provides to shareholders by other means are examined together. Retaining profit within the company for a concrete economic reason is not the same as making excessive payments to the majority while the minority receives no income at all.
Commercial impact of personal conflict in family companies
The decision of the Civil General Assembly of the Court of Cassation (Yargıtay Hukuk Genel Kurulu, HGK) dated May 28, 2025, E. 2025/11-121, K. 2025/364, makes this distinction concrete. In a dispute in a closed family company, in addition to the numerous lawsuits and the personal conflict between siblings, the obstruction of the right to obtain information, the inability to benefit equally from the company's resources and exclusion from its functioning were assessed. The Assembly gave weight to the fact that the deterioration of personal relations continuously affected the company's activities adversely.
The decision cannot be read as meaning that every family disagreement requires the end of a joint-stock company. A concrete link is sought between personal resentment and the shareholding relationship having become objectively intolerable. Moreover, the court's ending the company and its enabling the claimant to leave by receiving the share price are outcomes of different weight. The HGK explains that, if the company can continue without the claimants, the intolerability must be assessed from the claimant's perspective with regard to the alternative solution; and that a gravity requiring the abolition of the entire company is not sought in every case.
The procedural outcome of the decision is also important: the HGK found the insistence decision appropriate and sent the file to the relevant chamber for the other appeal grounds that had not been examined. The decision therefore cannot be presented as one in which all monetary calculations became final or the company was conclusively dissolved.
Must all minority rights and actions be exhausted first?
Rights such as obtaining information, inspection, requesting a special audit and applying against general assembly resolutions may contribute to resolving the dispute. However, exercising all of them, winning all actions and exhausting every avenue of appeal is not an absolute precondition of a TTK Article 531 action. Paragraph 46 of the said HGK decision expressly rejects making the proof of good causes depend on obtaining favorable judgments in earlier actions.
Dissolution being a last resort is different from establishing a mandatory order of actions. The court assesses whether the concrete problem can be resolved by a narrower intervention. For example, where meeting a particular request for information could have resolved the dispute, ending the entire company may be disproportionate. Conversely, merely directing exclusion that has extended over years to a new request for information may also fail to provide effective protection.
For this reason, the petition should explain not only which applications were made but why those applications did not produce a solution. The independent rights have their own periods that are tracked separately. Filing a dissolution action does not, for example, by itself preserve the period of a separate right of action against a general assembly resolution.
How are the rights violation, the document and the solution matched?
The table below is not a list of definitive outcomes. It is a preparation tool that ensures the allegation is supported by evidence and the company's counter-statement is assessed in the same file.
| Problem asserted | Document or record to be examined | Counter-statement and direction of a suitable solution |
|---|---|---|
| Continuous failure to provide information | Written questions, general assembly minutes, replies, earlier court decisions | The scope of the request and the trade-secret justification are examined; the protection in TTK Article 437 and the weight of the violation together with other events are assessed. |
| Economic advantage given to the majority while no profit is distributed | Financial statements, profit distribution decisions, payments to executives, related-party transactions | A genuine investment need is separated from discriminatory transfer of resources; remedying the violation or exit against the share price is assessed. |
| Reduction of the company's assets | Sale contracts, payment records, appraisal, link to a related person | The defense of an ordinary commercial transaction is tested; an interim measure for the concrete transaction and, if the conditions exist, a separate liability claim come into question. |
| Family conflict disrupting the business | Meeting minutes, contract losses, correspondence, documents of related actions | The effect of personal resentment on the business is sought; an exit solution compatible with the company's continuation is explored. |
| Corporate bodies being unable to function | Registry, board of directors and general assembly records, failed attempts to meet | A temporary dispute is distinguished from the absence of a body; appointment of a trustee under TTK Article 530 is examined separately if its conditions exist. |
| Share price not reflecting the real value | Current valuation, the list of all assets and debts, immovable property and trademark records, financial projections | Nominal value is distinguished from real value; an auditable expert calculation dated close to the decision is requested. |
The absence of a document does not require the allegation to remain abstract. By explaining which records are held by whom and which event they serve to prove, the court may be asked to have them produced or obtained. However, being a shareholder does not grant authority for unlimited access to all of the company's electronic systems. For trade secrets, employee and customer data, and information unrelated to the dispute, the scope and the limits of access should be observed.
What solutions can the court order instead of dissolution?
The claimant leaving by receiving the share price
TTK Article 531 gives the court the possibility to decide that the real value of the claimant shareholders' shares, as of the date closest to the decision, be paid and that the claimants be removed from the company. The removal here is not a sanction for the claimant's culpable conduct; it is an alternative that can resolve the partnership dispute while keeping the company alive. The HGK states that, if the conditions exist, the court may assess this alternative even if it was not separately requested.
A joint-stock company shareholder has not been granted a general individual right of withdrawal for good cause similar to that regulated in TTK Article 638 for limited liability companies. For this reason, the alternative in Article 531 cannot be presented as an independent exit door available without satisfying the capital threshold and good cause requirements. A shareholder merely wanting to convert their investment into cash is not sufficient.
By whom, through what legal mechanism and when the share price will be paid must also be clarified. The alternative in the Code does not automatically make all the other shareholders personally liable. The company's acquisition of its own shares, protection of capital, ability to pay and, if any, a voluntary takeover arrangement are assessed together. A payment construct that cannot be implemented produces a solution only on paper.
Limits of other suitable and acceptable solutions
The court's power to order an alternative solution is not an unlimited authority to run the company. Mandatory provisions, the hearing of the parties, the enforceability of the decision, and the rights of creditors and third parties must be protected. In legal scholarship, Bilge discusses that acceptability does not mean that all parties must necessarily consent, and that the solution must balance the interests. It cannot be concluded that there is an unlimited power that would even allow shareholders other than the claimant to be removed while disregarding their consent and their standing as parties.
For example, when an arrangement is proposed that would end a particular rights violation, it is examined whether the problem will actually be remedied and whether the decision can be legally implemented. Merely saying “let them be brought into management” does not replace the rules on the election of the board of directors and on the company's structure. The result sought by the claimant, the possibility of the company's continuation and the risk of the violation recurring should be discussed together.
How is the real value of the shares determined?
Real value is not identical to the nominal amount written on the share certificate or merely to the equity amount in the accounting records. The time criterion in TTK Article 531 is the date closest to the date of the decision. An old balance sheet prepared when the action was filed therefore does not by itself justify payment of the same amount at the end of the proceedings.
The expert examination should suit the nature of the company. Immovable and business assets, debts, collectible receivables, litigation risks, income-generating capacity and the going-concern assumption may be reflected in the assessment. In a report in which more than one method is used, it is important that the same economic value is not counted twice and that the reason for the preferred method is stated. The parties should be able to object not only to the final amount but also to the dates of the data used and to the assumptions.
In the decision of the 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi) dated May 13, 2025, E. 2024/6495, K. 2025/3310, it was emphasized that, relying on TTK Article 531, the real value closest to the date of the decision, rather than the date of filing, must be determined. The starting point of this file is a different dispute concerning the transfer and registration of shares; the decision is given here merely as an example regarding the valuation date. It cannot be concluded from the decision that every dissolution action will be accepted.
The parties to the action, the competent court and mediation
The dissolution action is brought against the company. Majority shareholders or executives do not become defendants to the dissolution request merely because of those capacities. Personal liability or compensation claims to be directed against them require a separate legal basis and an assessment of standing. The court with subject-matter jurisdiction is the commercial court of first instance; under TTK Article 531 and HMK Article 14/2, the court at the place of the company's registered seat has exclusive venue. The company's correct trade name, registry and seat should be determined from the current record.
A mere request for dissolution of the company is not a receivable or compensation claim whose subject is the payment of money. For this reason it does not fall within the mandatory mediation under TTK Article 5/A merely because it is a commercial case. The court's being able to order the share price instead of dissolution likewise does not, by itself, turn every dissolution action into a monetary claim from the outset. On the other hand, dividends, compensation or other monetary claims separately asserted must be examined according to their own nature.
Although negotiation on a share transfer and on resolving the dispute is possible, a mediator cannot replace the court and establish a dissolution judgment under Article 531. The parties to the settlement to be made, the authority of the company bodies, the share transfer rules and third-party rights are also taken into account. In preparing the litigation file, the court fee, expert expenses, advance on expenses and the risk of opposing counsel's fees should be assessed, and the specialized cost of the share valuation should be taken into account.
How can the company be protected during the proceedings?
Filing the action does not stop the company by itself and does not transfer management to the minority. Under HMK Articles 389–390, for a precautionary injunction, the right to be protected, the concrete danger and the damage that delay would cause must be proved on a prima facie basis. Instead of requesting an indefinite closure of all bank accounts, proportionate protection should be considered for a particular transfer of assets or an extraordinary transaction connected with the dispute. An injunction that prevents payment of wages, taxes and supplies may also reduce the company's value.
Appointment of a trustee (kayyım) is not an automatic outcome. Conditions such as the absence of a body and the impossibility of securing management by other means, as in TMK Article 427/4, cannot be treated the same as an ordinary shareholder dispute. The legal basis for the requested intervention and the reason why a narrower measure would not suffice should be explained. Preservation of evidence may be assessed separately to protect records that risk disappearing; preservation of evidence does not conclusively decide the existence of good cause or the share price.
Security is, as a rule, required for an injunction; the exceptions in HMK Article 392 must be justified. Under HMK Article 393, enforcement must be requested within one week of the decision being pronounced to or served on the requesting party. In a pre-action injunction, the two-week period in Article 397 for filing the main action runs from the date on which enforcement is requested; there is also an obligation to submit the action document to the enforcement file. Where there is a request to which mandatory pre-action mediation would apply, the effect of Article 18/A/16 of the Law on Mediation in Civil Disputes (HUAK) on the period is calculated separately. Because an unjustified injunction may give rise to liability for damages, an injunction should not be structured as a tool of pressure.
What happens to the company and its shareholders after the decision?
If the request is rejected, the shareholding relationship continues. If it is decided that the claimants leave against the share price instead of dissolution, the payment, the legal status of the shares and the necessary registry procedures are handled according to the content of the judgment; the company may continue its activities. The appeal route and enforcement effect of the decision should be examined according to the nature of the judgment given. Under HMK Article 345, the general appeal period is two weeks from proper service; for the possibility of cassation appeal, the relevant rules and any monetary limits are assessed separately.
A dissolution decision, on the other hand, does not mean that the company's assets are distributed directly to the claimants. The legal personality of a company that enters liquidation continues for the purpose of liquidation. In a dissolution ordered by the court, there are stages of appointing a liquidator, inventory and balance sheet, calling creditors, collecting receivables and paying debts. Only after this may the remaining value be distributed to shareholders on statutory conditions; deletion from the registry comes into question once liquidation is completed. Exit against the share price and the liquidation share are therefore different legal and economic outcomes (TTK Articles 533, 536, 540–545).
Information and documents provided are handled in the course of legal assessment and the services undertaken, with regard to professional secrecy and the rules on the protection of personal data. A secure transmission channel for sensitive company documents should be learned from the firm. Initial contact does not mean that the matter or the power of attorney has been accepted.
In connection with this subject, the articles on good-cause dissolution of a limited liability company and comparison with the exit payment in a limited liability company may also be consulted.
Conclusion
The good-cause dissolution of a joint-stock company is a path that assesses the protection of the minority together with the interest in the company's continuation. Sound preparation brings together the share records showing the right of action, the chronology of the rights violations, the financial data and a workable solution proposal. Discussing dissolution, exit against the share price and more limited interventions in the same file makes visible both the scale of the request and the economic outcome that may follow.
Frequently Asked Questions
Can an action be brought with a five percent share in a company that is not publicly held?
The statutory threshold is ten percent. This proportion may be reached together with other shareholders. Because the validity of a lower threshold in the articles of association is disputed, a definitive outcome should not be assumed on the basis of that provision alone.
Can every joint-stock company shareholder withdraw for good cause?
There is no general right similar to TTK Article 638 in limited liability companies. In TTK Article 531, exit against the share price is an alternative solution that the court may assess within the framework of the required capital proportion and good cause.
Does a long period without dividends win the case?
The period alone is not sufficient. Distributable profit, investment and financing needs, benefits provided to the majority and other rights violations are assessed together.
Must other actions become final before a dissolution action?
Not absolutely. The HGK decision of May 28, 2025 rejects any requirement to obtain a favorable decision first and to exhaust the avenues of appeal. Nevertheless, the sufficiency of narrower solutions is examined.
Is the share price calculated according to the balance sheet at the date of the action?
TTK Article 531 is based on the real value as of the date closest to the decision. Current assets and debts and the company's economic characteristics should be taken into account; the nominal capital amount should not be treated as the payment price automatically.
Is a trustee appointed to the company once the action is filed?
No. The action does not by itself change the management of the company. The relevant legal conditions for an injunction or a trustee, the concrete danger and the proportionality of the intervention must be shown separately.
Sources and legal bases
1. Turkish Commercial Code No. 6102 (Türk Ticaret Kanunu), in particular Arts. 5, 5/A, 340, 376, 411, 437, 530–531, 533, 536, 540–545 and 638. Ministry of Trade institutional text; Ministry of Justice legislation record.
2. Capital Markets Board (Sermaye Piyasası Kurulu). “Halka Arz” (Public Offering), definition of a publicly held company. Institutional explanation.
3. Code of Civil Procedure No. 6100 (Hukuk Muhakemeleri Kanunu), in particular Arts. 14/2, 345 and 389–400; amendments made by Arts. 40–42 of Law No. 7251. HMK institutional text; Law No. 7251, TBMM.
4. Law No. 7589, Arts. 19–20 and 25. TBMM text.
5. Law on Mediation in Civil Disputes No. 6325 (Hukuk Uyuşmazlıklarında Arabuluculuk Kanunu), Arts. 1, 15/4 and 18/A. Ministry of Justice text.
6. Turkish Civil Code No. 4721 (Türk Medenî Kanunu), Art. 427/4. TBMM text.
7. Court of Cassation Civil General Assembly (Yargıtay Hukuk Genel Kurulu), 28.05.2025, E.2025/11-121, K.2025/364. Karamercan Hukuk, republication of the full decision.
8. Court of Cassation 11th Civil Chamber (Yargıtay 11. Hukuk Dairesi), 13.05.2025, E.2024/6495, K.2025/3310. Karamercan Hukuk, republication of the full decision.
9. Karatepe Kaya, Meltem. “İngiliz Hukukunda Azınlık Pay Sahiplerinin Korunması ve Türk Hukuku ile Karşılaştırılması.” İstanbul Hukuk Mecmuası, 79(1), 2021, pp. 79–133, in particular pp. 117–118. Full text.
10. Bilge, Mehmet Emin. “Anonim Şirketin Sona Ermesi ve Tasfiyesi.” Erzincan Üniversitesi Hukuk Fakültesi Dergisi, XVI(3–4), 2012, pp. 261–294, in particular pp. 274–279. Full text.
11. Personal Data Protection Authority (Kişisel Verileri Koruma Kurumu). Explanations on personal data and conditions for processing. Institutional page.