In a joint-stock company, the authority to decide on the bulk sale of a significant amount of company assets belongs to the general assembly; it cannot be delegated to the board of directors. However, not every sale of real property falls within this scope. The value of the asset within the company, its income-generating function, the relationship of the transaction to ordinary operations and whether the business can continue after the sale are assessed together. In a limited company, because there is no direct reference to the same provision, the conditions set out in case law must be examined separately, particularly for sales that effectively lead the company into liquidation. [1, 3]
This dispute involves three separate questions: Which body may decide on the sale, who may sign on behalf of the company, and who may bring which claim against a transaction that violates the law? Sole representation authority in the signature circular does not, by itself, replace the general assembly resolution that the law requires. Conversely, being a partner does not give the right to demand the company's real property back in one's own name.
Which sales of company assets require a general assembly resolution?
There is no fixed percentage for a significant amount in a joint-stock company
Article 408/2-f of the Turkish Commercial Code No. 6102 (TTK) places the bulk sale of a significant amount of company assets among the non-transferable powers of the general assembly. For non-public joint-stock companies, the law contains no single monetary threshold or percentage applicable to all transactions. For this reason, a transaction cannot be classified merely by looking at the carrying value shown in the latest balance sheet. [1]
The review must be based on the company's assets and operating position as of the date of sale. A current valuation, the place of the asset being sold within the total economic value, the income derived from that asset and whether another asset could take its place provide the decisive data. An old factory recorded at a low value on the balance sheet may be the place where all production is carried out. Conversely, a high-value property may be inventory that a real estate development company produced for sale.
The assessment of significance and the question of whether the sale is in the company's interest are different reviews. Obtaining a good price, relieving a payment difficulty or paying off debts may explain the economic rationale of the transaction; but in a sale that requires the general assembly's authority, this does not by itself lead to the conclusion that a resolution of that body was unnecessary.
A single property, an operating building and commercial inventory are not assessed in the same way
A company's only hotel building, its only production facility, the brand on which its operations rest or a significant affiliate may be the subject of a transaction. What matters here is the company's actual business as much as the number of properties. The fact that the articles of association permit the purchase and sale of real property also does not show that every sale is an ordinary commercial transaction.
| Situation examined | Point to be investigated | Effect on the legal assessment |
|---|---|---|
| Sale of the only factory where production takes place | Can production continue elsewhere; is there a genuine and workable continuation plan? | A strong indicator of significance for the continuity of the company. |
| Transfer of apartments built by a construction company for sale | Is this delivery of inventory, or disposal of the company's operating base? | Sale within ordinary operations is distinguished from de facto liquidation. |
| Sale of equity interests | What is the place of the shares sold in income, management and total assets? | Company assets other than real property are also assessed. |
| Several transactions carried out at short intervals | Is there a common plan, the same economic purpose or connected buyers? | Splitting up the transactions does not, on its own, remove the general assembly's authority. |
This table is not a list of automatic outcomes. For example, if it is alleged that operations will continue after the sale as a tenant, the lease term, the termination conditions, the price and any buy-back arrangements are examined in concrete terms. It is not enough for the contract merely to be called a “sale and leaseback.”
Capital markets rules also apply to publicly traded companies
For publicly traded companies, there are special capital markets regulations on significant transactions, public disclosure and the right of withdrawal. The significance criteria and exceptions in Communiqué No. II-23.3 are not the same thing as the discussion under TTK Article 408/2-f. It would be incorrect to use the ratios specific to publicly traded companies as firm limits for all limited companies or non-public joint-stock companies. If the transaction falls within this special regime, preparation of the general assembly, the disclosures and the right of withdrawal must be assessed together. [12]
Can a manager sell a limited company's real property alone?
When TTK Article 616 lists the non-transferable powers of the general assembly of a limited company, it does not expressly regulate the sale of a significant amount of assets. Article 644, which contains the references to the provisions on joint-stock companies, also makes no reference to Article 408/2-f. The statement that “all the sale rules applicable to a joint-stock company apply to a limited company without change” is therefore a generalization lacking a legal basis. [1]
Nevertheless, Article 643 refers to the provisions on joint-stock companies with respect to the liquidation procedure and the powers of the bodies in liquidation. The decision of the Civil General Assembly of the Court of Cassation (Yargıtay Hukuk Genel Kurulu) dated March 5, 2025, E. 2023/976, K. 2025/98, accepts that, even in an active limited company, a general assembly resolution is required for a transfer of assets that ends the company's operations and effectively leads to liquidation. The Assembly required an investigation into whether the properties sold made up all of the properties and into the effect of the sale on operations. Sole representation authority and the fact that debts had been paid were not regarded as sufficient on their own. The dissenting opinion in the decision argues that the law contains no express rule of authority and that good faith must be protected. [3]
For this reason, the transaction file in a limited company should be prepared together with the company agreement, the manager's representation authority, the function of the asset sold and the company's position after the sale. The conditions of general assembly approval in the company agreement are also of particular importance. It is not possible to place a sale of goods made by a manager within ordinary operations in the same legal category as a transfer that removes the company's entire operating base.
With what majority must the general assembly adopt the sale resolution?
Companies in liquidation have an express heightened quorum
For joint-stock companies in liquidation, TTK Article 538/2 makes the bulk sale of significant assets subject to a general assembly resolution and refers to Article 421/3–4. Accordingly, the affirmative vote of shares representing at least 75 percent of the capital is required; this quorum is maintained at the subsequent meeting as well. In the liquidation of limited companies, the reference in Article 643 is taken into account. This ratio must not be calculated merely as 75 percent of those attending the meeting. [1]
In active joint-stock companies, the law, the regulation and case law must be read together
Article 22/12 of the General Assembly Regulation provides for a 75 percent affirmative vote for the bulk sale of significant assets. By contrast, TTK Article 408/2-f contains no special quorum. The general rule of TTK Article 418 is that, unless there is a heightened provision in the law or the articles of association to the contrary, a resolution is adopted at the first meeting with at least one quarter of the capital represented and by a majority of the votes present. [1, 2]
In its decision dated December 8, 2021, E. 2020/306, K. 2021/6945, the 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi) applied Article 418 to an active joint-stock company and found the extension, by regulation, of the heightened quorum specific to liquidation to an active company to be contrary to the hierarchy of norms. This decision does not mean that the regulatory provision has been repealed in its entirety. [4]
In the decision dated November 4, 2024, E. 2023/5897, K. 2024/7689, concerning a limited company, a judgment based on the conclusion that a resolution supported by 70 percent for the sale of a single property was insufficient was upheld. Because the type of company and the dispute are different, this decision should not be presented as the direct counterpart, on the same facts, of the 2021 decision on an active joint-stock company. It does, however, show that a single and indisputable quorum cannot be stated for all companies limited by capital. [5]
Before the transaction, the type of company, the liquidation status, any heightened provisions in the articles of association and whether the company's object of business is being changed together with the transaction must be examined separately. Obtaining a high voting ratio also does not cure a defect in the notice, the agenda or an exclusion from voting. In an active limited company, there are the general majority rule in Article 620 and the special matters in Article 621; yet completing a transaction in reliance on this general rule, in a sale amounting to de facto liquidation, carries a significant risk of invalidity.
How is the sale resolution distinguished from signing authority?
The general assembly forms the company's will; the representative implements the resolution
The general assembly's decision to sell does not mean that the partners attending the meeting may sign at the land registry on behalf of the company. The persons who represent the company in external relations carry out the transaction in accordance with a valid representation arrangement. Conversely, the fact that the representative appears in the registry as authorized does not give that person the decision-making authority that the law leaves to the general assembly. This distinction is the starting point for assessing TTK Article 371 together with Article 408. [1, 11]
The general assembly resolution must identify the asset that is the subject of the transaction, express the intention to sell and set out the conditions to be applied in a verifiable manner. It is different for the management body to search for a buyer and carry out preparatory work from leaving the authority to decide on the substance of the sale entirely to the management body.
A condition merely not to go below the appraised value may not be sufficient safeguard
In the decision of the 11th Civil Chamber of the Court of Cassation dated October 1, 2025, E. 2025/1189, K. 2025/5835, the granting to the board of directors of authority to sell the shopping center, which was the company's only asset, at not less than the market value to be determined by expert appraisal was examined. Whereas the regional court of appeal (bölge adliye mahkemesi) had treated this as a task of implementation, the Court of Cassation reversed the judgment, accepting that the resolution in question resulted in leaving the non-transferable authority to sell to the board of directors. [6]
Because of this decision, it cannot be concluded that “if a minimum price is stated, the entire authority to sell may be delegated.” The safer method in practice is to submit the transaction conditions, determined after the preparation and negotiation process, to the general assembly's genuine assessment. This is not a claim that the law prescribes a standard list of contract terms for every sale; it is a legal assessment aimed at reducing the risk of dispute.
Conflict of interest in a sale to a related person is reviewed separately
If the buyer is a board member, a controlling shareholder or a company connected with them, it is not only the conformity of the price with market value that is examined. In a joint-stock company, TTK Article 393 may apply to the prohibition on taking part in board deliberations, Article 395 to permission to transact with the company, and Article 436 to exclusion from voting at the general assembly because of a personal transaction. The persons and the scope of transaction covered by each provision differ. [1]
For example, granting a board member permission to transact with the company does not replace the separate body resolution on the sale of significant assets. In a limited company as well, the company agreement, the duty of loyalty and its own specific organ provisions are examined; not every conflict-of-interest rule of the joint-stock company is carried over automatically to the limited company.
Is a sale made without a general assembly resolution invalid?
The defect in the board of directors' resolution and the consequence for the sale must be determined separately
TTK Article 391/1-d treats board resolutions that fall within the non-transferable authority of another body as null and void. However, this does not resolve in a single sentence the legal position of the sale contract, the act of disposition and the land registry entry. The action must be framed according to which transaction is defective and for what reason. [1]
In legal scholarship there are views that support the absolute invalidity of a sale lacking the general assembly's will, its invalidity pending subsequent approval, or, in certain circumstances, the protection of a good-faith third party. Gökçen Turan's 2024 study takes as its basis the function of the general assembly resolution in forming the company's will and the principle that, unless approval is given, the transaction does not bind the company; it also considers the opposing views on transaction security. This disagreement does not justify ignoring the risk of invalidity in practice. [11]
The Constitutional Court's 2026 decision preserved the general assembly safeguard
By its decision dated May 13, 2026, E. 2025/226, K. 2026/112, the Constitutional Court (Anayasa Mahkemesi) rejected the request for annulment of TTK Article 408/2-f. The decision was published in the Official Gazette (Resmî Gazete) of August 5, 2026. The majority accepted that there is a reasonable balance between the protection of the company and its shareholders and the interests of third parties, and that the significance of the asset concerned can be determined in the specific case. The dissenting opinion, for its part, criticized the uncertain risk of invalidity placed on a third party who cannot access the data of a closed company. [7]
This decision is a norm review decision; it does not determine whether a particular sale is significant or which quorum is sufficient. Its reasoning shows that, for transactions where the required general assembly resolution is lacking, a third party's reliance solely on the signature circular is not a safe solution. The buyer's right to claim for losses suffered because of the invalidity is examined separately in terms of the ground of liability, fault, loss and causal link.
Subsequent general assembly approval cannot be excluded in all cases
In its decision dated December 16, 2025, E. 2025/3117, K. 2025/7588, the 11th Civil Chamber of the Court of Cassation examined a general assembly resolution concerning the withdrawal of an action for cancellation of title and registration brought in respect of properties sold earlier. It treated the later resolution as ratification of the earlier transaction; it reversed the judgment, which had been given on the ground that subsequent approval was not possible, and required an investigation of the general assembly quorum. [8]
It therefore cannot be said that “subsequent approval is never possible.” However, a manager's statement, the booking of the money in the accounts or the majority partner's awareness of the transaction is not the same as a valid body resolution. The scope and procedure of the approval, any simulation or other grounds of invalidity apart from lack of authority, and any res judicata are assessed separately. The thought that approval can be obtained later does not justify dispensing with the resolution that was required at the outset.
What legal remedies may partners pursue against the sale?
Claims against general assembly and management body resolutions
If a general assembly resolution approving the sale exists, an annulment action may be considered on the ground of violation of the law, the articles of association or the rule of good faith. Under TTK Article 445, the three-month period runs from the date of the resolution. For a shareholder who attended the meeting, the rule requiring a negative vote and the recording of the dissent in the minutes applies; the special conditions in Article 446 are also taken into account for violations of the rights of notice and attendance. In limited companies, the reference in Article 622 applies. [1]
If no general assembly resolution was adopted at all, annulment of a nonexistent resolution is not sought. Appropriate claims are identified, such as nullity of the existing management body resolution, invalidity of the transaction, restitution or compensation. A finding of non-existence and of nullity is not subject to the same regime as the three-month period for the annulment action. Nevertheless, missing the annulment period because the defect was wrongly characterized creates a serious risk; moreover, the periods for the rule of good faith and for separate claims for performance are reserved.
In cancellation of title and registration, the capacity of the company and that of the partner must not be confused
A company's real property is not property directly owned by the partners in proportion to their shares. The claim for restitution is directed at the company's assets. In an action for cancellation of title and registration, what is sought, as a rule, is the return of the property to the company; a shareholder's request for registration of a share in his or her own name is a different claim that requires a separate basis.
In the decision of the Court of Cassation dated March 17, 2025, E. 2024/6734, K. 2025/1840, a judgment was upheld that accepted the company's claim against a transfer of real property made without a general assembly resolution while rejecting the claims of the partners in the same case. The decision points out that partner status alone is not sufficient in every restitution action. [9]
If the person who represents the company is also responsible for the transaction, the arrangements for pursuing and representing the case must be established separately. On what legal basis the partners may bring a claim on behalf of the company, and the need for an appropriate representative or, where necessary, a curator for representation (kayyım), are examined according to the specific case. If the action is brought by the wrong person or against the wrong person, strong claims on the merits of the transaction may be left without result.
If the sale is found invalid, not only the recovery of the property but also the refund of the price paid is considered. It must be determined whether the price was paid to the company, to the representative, or to a creditor to discharge a company debt. If the conditions of unjust enrichment are present, Article 77 et seq. of the Turkish Code of Obligations No. 6098 (TBK) come into play; the limitation period of two years from learning and ten years from the enrichment under Article 82 for this claim must not be confused with the annulment period against a body resolution. It cannot be assumed in advance that the return of the property and the refund of money will be directed at the same person. [14]
A partner may also claim compensation for the company's loss
For the liability of managers, in addition to the breach of duty, fault, loss and an adequate causal link are investigated. Under TTK Articles 553 and 555, a shareholder may demand that the company's loss be made good; in that case, it is demanded that the compensation be paid to the company. A mere reduction in the value of shares does not turn the company's loss into the partner's personal claim. In a limited company, the reference in Article 644 is taken into account. [1]
The period in TTK Article 560 is two years from learning of the loss and the person liable, and in any event five years from the act causing the loss. If a longer limitation period is provided for the act under criminal law, the exception in the law is considered. Correction of the registry entry, annulment of a general assembly resolution and manager compensation are not claims subject to the same period. Non-payment of the sale price may separately give rise to a claim for the sale price or a contractual remedy; not every payment dispute shows that the sale is invalid for lack of body authority.
Can the sale be stopped, and what evidence should be prepared?
An interim injunction rests on a concrete danger and the subject of the dispute
If there is a danger that the property will be transferred again, encumbered, or that the company will be left without operations, an interim injunction may be requested under Article 389 et seq. of the Code of Civil Procedure No. 6100 (HMK). The claimed right and the danger of delay must be established prima facie; the injunction sought must be connected with the subject of the dispute and proportionate. Instead of a request to freeze all of the company's assets without justification, the asset that is the subject of the transaction and the right to be protected are made concrete. As a rule, security is required for damage that an unjustified injunction may cause; the exceptions in HMK Article 392 are considered separately. [10]
In an annulment or nullity action against a general assembly resolution, a stay of execution of the resolution under TTK Article 449 may also be considered. The filing of an action does not stop the sale automatically. If an injunction is granted, its enforcement must be requested in time, and in the case of a pre-action injunction the supplementary procedural steps for filing the action must be completed. HMK Article 393 provides for a one-week period from the pronouncement or notification of the decision for the request for enforcement, and Article 397 provides for a two-week period for filing the action from the date enforcement is requested. The effect of the periods during mediation as a condition precedent to litigation is assessed separately under Article 18/A of Law No. 6325 on Mediation in Civil Disputes (HUAK). [10, 13]
The review of evidence should not be limited to the land registry record
• Company and representation records: The articles of association, trade registry records, management body resolutions, the representation arrangement and signature documents.
• General assembly documents: The notice, the agenda, the list of those present, the minutes, affirmative and negative votes, records of dissent and, if any, the subsequent approval resolution.
• Significance and value documents: The balance sheet at the date of the transaction, the asset schedule, an independent valuation, income records, capacity and production documents, alternative business premises and lease agreements.
• Transaction and payment documents: The sale contract or promise-to-sell contract, land registry transaction documents, bank movements, set-off and debt discharge records, and lawful documents showing any connection with the buyer.
In terms of proof, the company's registered capital must not be confused with the value of the company's total assets. In an allegation that the price is below market value, a comparable valuation must be presented; in an allegation that the sale ended operations, the actual production and income position must be shown. The routing of the price through personal accounts is also examined with respect to the actual recipient of payment and the company's interest.
How are subject-matter jurisdiction, venue and mediation determined?
For disputes over body resolutions and manager liability arising from the TTK, the provisions on commercial actions are taken into account. An action for annulment of a general assembly resolution is brought before the commercial court of first instance at the place where the company's registered office is located. For a claim for cancellation of title and registration concerning the property itself, the exclusive jurisdiction of the court of the place where the property is located under HMK Article 12 is assessed separately. The true legal cause of the dispute and the outcome of the claim are the basis for determining the competent court. [1, 10]
An action merely for annulment of a general assembly resolution or for a declaration of its nullity is not subject to mandatory mediation simply because it is a commercial action. In commercial actions under TTK Article 5/A whose subject is a sum of money, such as receivables and compensation, pre-action mediation is required. Where a claim for cancellation of title and registration is brought together with, or in the alternative to, a claim for the price or compensation, the procedural prerequisite must be examined separately for each claim. [1]
If the transaction amounts to a transfer of the company's commercial enterprise as a whole, the form, registration and announcement under TTK Article 11/3 and the provision on business debts in TBK Article 202 also come into play. The general assembly's resolution to sell does not remove the particular consequences of a transfer of an enterprise. Likewise, the partners' sale of their own shares and the company's sale of the assets it owns are different transactions. [1, 14]
Conclusion
In the sale of a company's significant assets, legal certainty requires more than a valid signature document. First, the significance of the asset for the company, and then the body that will decide and the quorum that will apply, must be determined; the representation and transfer steps must be carried out in line with that resolution. Joint-stock and limited companies, and active companies and companies in liquidation, must be assessed separately.
When a dispute arises, protecting the partner's rights, recovering the company's property and compensating the company's loss are separate claims. The right claimant, the right claim, the right period and a concrete ground for an injunction are as decisive as the unlawfulness of the sale. Reviewing the body resolution before the transaction and the litigation strategy after it together reduces the uncertainty that the company, the partners and the buyer will face.
Related articles: What if the General Assembly Does Not Meet: Notice and Court Application; Annulment of a Company General Meeting Resolution: Deadlines, Nullity and Stay of Execution; Liability of the Company Manager and Board of Directors; Unauthorized or Irregular Transfer of Company Property; Unauthorized Acts and Signatures on Behalf of a Company: Representation Authority; Loss Caused by a Controlling Company to a Subsidiary and Equalization.
Frequently Asked Questions
Can a company's only property be sold without a general assembly resolution?
Being the only property is a strong indicator; its function in the company's operations is also examined. In a joint-stock company, the conditions of TTK Article 408/2-f are assessed; in a limited company, the leading considerations are whether the sale leads to de facto liquidation and the company agreement. An automatic outcome independent of the type of company cannot be established for every single property.
Is the company manager's sole signing authority sufficient for a sale?
No. Representation authority and the sale resolution required of the general assembly are different things. The fact that a manager can represent the company alone does not show that the manager can carry out, without a resolution, a transaction that falls within the general assembly's authority.
Is a 75 percent vote always required for the sale of significant assets?
In liquidation there is the express reference in TTK Article 538/2. In active companies, the distinctions of company type, articles of association and case law matter. A single ratio cannot be given without assessing together Article 22/12 of the Regulation and the Court of Cassation's approach of applying Article 418 to an active joint-stock company.
If the transfer has been made at the land registry, is the transaction now regarded as valid?
Completion of the transaction at the land registry does not by itself cure the lack of the company's required body resolution. A claim for cancellation of title and registration may be considered by examining the scope of the transaction, the representation position and the asserted ground of invalidity.
Does adopting a general assembly resolution afterwards solve the problem?
There is a current Court of Cassation decision that takes subsequent approval into account. However, the approval must be given by the competent body with the proper procedure and quorum, its scope must be definite, and other grounds of invalidity must be examined separately. It does not result in automatic cure in every case.
Can a partner demand registration of the sold property in his or her own name?
The owner of the company's real property is the company. Share ownership alone does not give a direct right of ownership over the property. The company's right of restitution, the partner's right to sue against a body resolution and the right to compensation for the company's loss are distinct from one another.
If a pledge or a long-term right of use is created instead of a sale, does the general assembly requirement fall away?
This conclusion cannot be reached by looking at the name of the transaction. As also stated in the Constitutional Court's 2026 decision, judicial practice assesses certain transfers of pledges, rights of superficies and tenancy rights in terms of significance. However, not every pledge or lease transaction automatically falls within Article 408/2-f; its effect on the company is investigated. [7]
Sources and legal bases
- Turkish Commercial Code No. 6102, in particular Articles 4–5/A, 11, 371, 391, 393, 395, 408, 418, 421, 436, 445–449, 538, 553, 555, 560, 616, 620–623, 629, 643–644.
- Regulation on the Procedures and Principles of General Assembly Meetings of Joint-Stock Companies and the Ministry Representatives to Attend These Meetings, Article 22/12; Official Gazette (Resmî Gazete) of November 28, 2012, No. 28481.
- Civil General Assembly of the Court of Cassation (Yargıtay Hukuk Genel Kurulu), March 5, 2025, E. 2023/976, K. 2025/98.
- 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi), December 8, 2021, E. 2020/306, K. 2021/6945.
- 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi), November 4, 2024, E. 2023/5897, K. 2024/7689.
- 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi), October 1, 2025, E. 2025/1189, K. 2025/5835.
- Constitutional Court (Anayasa Mahkemesi), May 13, 2026, E. 2025/226, K. 2026/112, in particular §§ 13–16, 28–37 and the dissenting opinion; Official Gazette (Resmî Gazete) of August 5, 2026, No. 33331.
- 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi), December 16, 2025, E. 2025/3117, K. 2025/7588.
- 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi), March 17, 2025, E. 2024/6734, K. 2025/1840.
- Code of Civil Procedure No. 6100, Articles 12, 389–393, 397.
- Turan, Gökçen, “Anonim Şirketlerde Genel Kurul Kararı Olmaksızın Önemli Miktarda Şirket Varlığının Toptan Satışı” (The Bulk Sale of a Significant Amount of Company Assets in Joint-Stock Companies Without a General Assembly Resolution), Banka ve Finans Hukuku Dergisi, Vol. 13, No. 51, 2024, pp. 569–600; in particular pp. 577–584 and 596–597.
- Capital Markets Board, Obligations of Listed Companies, significant transactions and explanations on Communiqué No. II-23.3.
- Law No. 6325 on Mediation in Civil Disputes, Article 18/A.
- Turkish Code of Obligations No. 6098, Articles 46–47, 77–82 and 202.