Nullity and Non-Existence of Joint-Stock Company Board of Directors Resolutions: Meeting, Quorum, Authority and Routes of Action

What Is the Legal Nature of a Board of Directors Resolution?

The board of directors is the management and representation organ of the joint-stock company. Many transactions, such as the company's strategy, financing, representation arrangement, appointment of managers, calling the general assembly to a meeting and the establishment of the company's books and internal control system, are carried out by board of directors resolution. For this reason, the validity of the resolution may affect not only the internal relationship among board members but also shareholders, company creditors, employees, investors and transactions with third parties.

The Resolution Must Be Distinguished from Its Implementation

A board of directors resolution expresses the collective will of the board. The act of representation, registration application, bank instruction, contract or general assembly call that follows the resolution are, on the other hand, implementing acts of the resolution. The defect of the resolution and the validity of the implementing act are not the same matter.

For example, a board of directors resolution on the delegation of the authority of representation may be null; however, the fate of a contract signed with a third party, reliance on the trade registry, the announcement of the authority of representation and the good faith of the third party are assessed separately. For this reason, in litigation strategy not only the invalidity of the resolution but also the consequences that the resolution has produced or is about to produce must be determined.

A Different Invalidity Regime Applies from That of General Assembly Resolutions

For general assembly resolutions, the distinction between annulment, nullity and non-existence is applied in detail. For board of directors resolutions, however, Article 391 TCC directly regulates an action for declaration of nullity. It cannot be said that board of directors resolutions are subject to a general and unlimited annulment action. Exceptions, such as certain resolutions under the registered capital system for which the law specifically grants the possibility of annulment, are reserved.

For this reason, instead of being satisfied with using the word “annulment” in the petition, it must be clearly shown why the resolution is non-existent, null, or annullable under a special provision.

How Is a Valid Board of Directors Resolution Formed?

A board of directors resolution is formed by the competent board's meeting in due form or its use of the written resolution method in the law, the satisfaction of the necessary quorums, the members' legally valid declaration of their wills, and the resolution's conformity with the law, the articles of association and the company's corporate structure.

Calling the Board of Directors to a Meeting

Under Article 392 TCC, every board member may request in writing that the chair call the board of directors to a meeting. The authority to call is assessed together with the articles of association and the board's division of duties. Although the law does not prescribe a single, unchangeable form for the method of the call, the articles of association or internal regulations may contain rules such as e-mail, notarial notification, a specified period or a specified address.

A Call by an Unauthorised Person Does Not Always Produce the Same Result

In decision E.2015/3129, K.2016/804 of the 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi), resolutions adopted at meetings held by other members without the exercise of the call authority belonging to the chair of the board were regarded as contrary to the basic structure of the joint-stock company and held null. On the other hand, in other decisions it may be accepted that, where the member was aware of the meeting and the attendance and quorum conditions were satisfied, not every deficiency in the call alone produces the result of nullity.

This distinction must be made on the basis of whether the irregularity in the call genuinely eliminates the member's right to participate in management, whether it alters the board's will, and the nature of the provision in the articles of association.

Notification of the Agenda and the Right to Prepare

Unlike the general assembly, the board of directors is, as a rule, not bound by the agenda principle to the same extent. Nevertheless, members must be able to understand the matter to be decided, examine the necessary document and vote knowingly. Putting a very important transaction on the agenda for the first time during the meeting and without leaving an opportunity to prepare may create a defect, in particular with regard to equal treatment, the duty of care, the right to obtain information and the formation of the board's will.

Physical and Electronic Meetings

The meeting and decision quorums in Article 390 TCC also apply to board of directors meetings held in an electronic environment. For electronic participation to be valid, the company's technical infrastructure, the provisions of the articles of association, identity verification and secure electronic signature processes must comply with the relevant legislation.

Producing a resolution with an electronic signature through MERSİS or the company's own electronic meeting system facilitates the formation of the corporate will; however, the use of a technical system does not remedy a defect of authority, quorum or content.

Written Resolution by Circulation

Under Article 390/4 TCC, unless any of the members requests that a meeting be held, a resolution proposal made by a member on a particular matter may be presented in writing to the other members, and a resolution may be adopted with the written approval of the majority of the total number of members.

The Written Proposal Must Be Presented to All Members

Failing to send the resolution proposal to some members at all may eliminate the members' right to participate in management. The proposal must be approved on the same text; the signing of different texts may not form a single board will.

Signing of the Resolution Is a Condition of Validity

The validity of a resolution adopted without a meeting depends on the resolution proposal being in writing and being signed by the required number of members. The signed documents may be on the same sheet, or separate pages may be affixed to the resolution book. If an electronic signature is used, the signature must be legally valid and be linkable to the text of the resolution.

Entry in the Resolution Book and Retention

The entry of the resolution in the board of directors resolution book is of fundamental importance for proof of the resolution and for corporate order. However, text written into the resolution book afterwards does not bring into existence a meeting that was never held or a majority that was never formed. Where there are contradictions among signature dates, meeting invitations, electronic records and the resolution book, an expert and document examination may be required.

How Are the Meeting and Decision Quorums Determined?

Under Article 390/1 TCC, unless the articles of association contain an aggravating provision, the board of directors convenes with the majority of the total number of its members and adopts decisions by the majority of the members present at the meeting. This arrangement also applies to electronic meetings.

An Aggravated Quorum May Be Provided for in the Articles of Association

The articles of association may provide for a meeting or decision quorum higher than the statutory quorum for certain decisions. For example, three quarters or unanimity may be required for a major investment, a loan, a transfer of immovable property, a related-party transaction or a change to the representation arrangement.

In the practice of the Court of Cassation, the invalidity of decisions taken without complying with an aggravated quorum validly provided for in the articles of association is accepted. In addition, there are decisions to the effect that the same protective quorum is required to remove or weaken an aggravated quorum provision.

The Effect of a Quorum Provision in Internal Regulations

Internal regulations, as a rule, regulate the delegation of management, the division of duties and the organisation. The board of directors' statutory meeting and decision quorum can be aggravated only by the articles of association. Nevertheless, in decision E.2023/5865, K.2024/8480 of the 11th Civil Chamber of the Court of Cassation, while the 80% majority provided for the most important decision on authority of representation was removed in an internal regulation accepted unanimously, the new decision was held to be non-existent because the same majority was not complied with.

This decision should not be generalised to the effect that every internal regulation provision automatically creates a binding quorum like the articles of association. The content of the decision, the manner in which the earlier arrangement was adopted, its connection with the articles of association and the special protection mechanism in the board's will must be examined together.

What Happens in the Case of an Equality of Votes?

Unless the law provides otherwise, in the case of an equality of votes the matter is left to the next meeting; if there is equality at the second meeting too, the proposal is deemed rejected. The chair has not been granted a general casting vote arising from the law. Provisions in the articles of association must be assessed separately for conformity with mandatory rules and with the collective structure of the board.

A Member's Deprivation of the Right to Vote and Conflict of Interest

Under Article 393 TCC, a board member may not take part in deliberations on matters in which the company's interest conflicts with the member's own personal interest outside the company, or with the interest of a descendant, an ascendant, the spouse or certain relatives. In case of doubt as to the existence of a conflict, the board of directors decides; the member concerned may not take part in that vote.

The Effect of a Conflict of Interest on the Quorum Is Examined According to the Specific Decision

If the vote of a member who is prohibited from participating was decisive in the adoption of the decision, the validity of the decision and the member's liability come into question. However, not every claim of an indirect interest automatically deprives the member of the vote. The conflict of interest must be concrete, personal and incompatible with the company's interest.

What Is the Difference Between Non-Existence, Nullity and Annulment?

Correctly characterising the sanction for a board of directors resolution directly affects the type of action, standing, the time limit and the burden of proof.

In Which Cases Does Non-Existence Arise?

Non-existence is the failure of the constitutive elements of the board's will to come into being. In doctrine and practice, the following situations in particular give rise to a discussion of non-existence:

• Persons who do not have the capacity of board of directors members adopting a decision,
• Neither a meeting nor the written resolution method having taken place at all,
• The absence of the required meeting or decision quorum,
• Minutes being drawn up as if a decision had been adopted when no vote was held,
• The signatures being forged or the required written approvals being entirely absent,
• The resolution being formed by the will of persons who are not board members.

In decision E.2023/5865, K.2024/8480 of the 11th Civil Chamber of the Court of Cassation, a board of directors decision adopted without the 80% quorum that should have been applied was held to be non-existent.

In Which Cases Does Nullity Arise?

Article 391 TCC provides that nullity of a board of directors resolution may be sought from the court. The article lists in particular the following resolutions:

• Resolutions contrary to the equal treatment principle,
• Resolutions that do not conform to the basic structure of the joint-stock company or that disregard the principle of protection of capital,
• Resolutions that violate, restrict or make more difficult the exercise of shareholders' inalienable rights,
• Resolutions that fall within the non-transferable powers of other organs or aim at taking over those powers.

The word “in particular” shows that the list is not exhaustive. Resolutions that are manifestly contrary to mandatory provisions, morality, public order or personality rights may also be absolutely invalid within the framework of the general provisions.

Can a Board of Directors Resolution Be Annulled?

There is no general annulment regime for board of directors resolutions. Unless there is a special statutory provision, an allegation that a resolution is contrary to the law or the articles of association is assessed not directly as “annulment” but on the basis of whether the concrete defect gives rise to non-existence, nullity, liability or another legal consequence.

Exceptions, such as the special annulment provisions on capital increase resolutions under the registered capital system, must be examined separately. Choosing the wrong type of action, although the court has the power of legal characterisation, may create risk in terms of the prayer for relief and procedural strategy.

How Are the Grounds of Nullity Under Article 391 TCC Applied?

Resolutions Contrary to the Equal Treatment Principle

The board of directors is obliged to treat shareholders under equal conditions equally. Treating some shareholders in the same share class differently without an objective reason in terms of information, payments, share acquisition, exercise of pre-emption rights or benefit from company facilities may give rise to nullity under Article 391 TCC.

The equal treatment principle is not absolute equality. A share class, a privilege, performance of the capital commitment, the company's interest or a statutory difference may justify an objective distinction.

Resolutions Contrary to the Basic Structure of the Joint-Stock Company

Board of directors resolutions that alter the founding principles, such as the separation of organs, the company's character as a capital company, the limited liability of shareholders, and the fields of duty of the general assembly and the board of directors, may be null.

In decision E.2015/3129, K.2016/804 of the 11th Civil Chamber of the Court of Cassation, resolutions adopted on a call made by unauthorised members were held, within the particulars of the specific case, to be contrary to the company's basic structure.

Resolutions Violating the Principle of Protection of Capital

Unlawful return of capital to shareholders, a transfer of company assets to the controlling shareholder without consideration, use of statutory reserves other than for their purpose, or resolutions that arbitrarily reduce the company's assets may give rise to nullity. The economic result of the transaction, the comparable value, the counter-performance and the company's interest must be examined together.

Resolutions Violating Inalienable Shareholder Rights

Board of directors resolutions that in practice eliminate a shareholder's inalienable rights, such as attending the general assembly, voting, bringing an action, obtaining information or receiving equal treatment, may be null. A resolution that reasonably regulates only the manner of exercise of the right must be distinguished from a resolution that renders the right non-functional.

Resolutions Falling Within the Non-Transferable Power of Other Organs

The board of directors cannot take for itself a power that is non-transferable by law of the general assembly or another organ. Exercising powers belonging to the general assembly, such as amendment of the articles of association, election of board members, approval of financial statements and profit distribution, by a board of directors resolution may give rise to nullity.

The Most Common Invalidity Scenarios in Practice

Irregular Change of the Authority of Representation

The delegation or limitation of the authority of representation must be made within the framework of the articles of association, the internal regulations and Articles 367 and 370 TCC. In decision E.2016/5382, K.2017/3443 of the 11th Civil Chamber of the Court of Cassation, the removal of a member's authority of representation and the leaving of the authority to certain members, without a provision in the articles of association and an internal regulation based on it, was assessed within the scope of nullity.

Systematic Exclusion of One of the Members from Meetings

Failing to make any call at all, concealing the place of the meeting, failing to give information and documents, or arranging the meeting in such a way as to make the member's attendance practically impossible may violate the right to participate in management. The effect on the result of the decision and on the quorum must be examined separately.

Subsequent Alteration of the Text of the Resolution

Entering in the resolution book a text different from the one voted on at the meeting, joining signature pages to another text, or altering the digital record creates a serious defect in the formation and proof of the resolution. Technical examination, e-mail metadata, e-signature verification and the integrity of the book pages are important.

Adopting a Decision on a Matter Within the Competence of Another Organ

If the board of directors has adopted a decision on a matter falling within the non-transferable power of the general assembly, Article 391 TCC expressly provides for the sanction of nullity. A decision by the board of directors that is merely preparatory or in the nature of a proposal must be distinguished from its exercise of final authority.

A Resolution Containing a Related-Party Transaction Detached from the Company's Interest

A resolution that gives a benefit without consideration to the controlling shareholder or to a person connected with a manager may, besides contravening the principles of equal treatment and protection of capital, also give rise to manager liability and unjust enrichment claims.

Who Can Bring the Action and Against Whom Is It Directed?

Article 391 TCC does not list particular claimants. In general, a shareholder, a board member or a person who has a legal interest in a declaration that the resolution is non-existent or null, or who has an interest worthy of protection in the specific case, may bring the action. Each claimant must explain the current legal effect of the resolution on themselves.

The Defendant Is the Company as a Legal Entity

An action for a declaration of invalidity of a resolution is, as a rule, directed against the company. It is not correct to direct the action against the board members who adopted the resolution merely because they were parties to the resolution. The members' personal liability may separately be the subject of a compensation action.

The Competent Court and Jurisdiction

The action is an absolute commercial action and is heard by the commercial court of first instance (asliye ticaret mahkemesi) at the place of the company's head office. Exclusive jurisdiction, connected claims and provisional protection requests must be examined separately according to the specific dispute.

Time Limit for the Action, Legal Interest and the Rule of Good Faith

An action for a declaration of non-existence and nullity is not subject to the three-month preclusive period (hak düşürücü süre) provided for the annulment of general assembly resolutions. However, if the resolution has been implemented for a long time, transactions have been made with third parties and the claimant has remained silent, a discussion of Article 2 TMK (Turkish Civil Code), legal interest, abuse of rights and reliance of third parties may arise.

For this reason, waiting on the thought that “there is no time limit” is not safe. Legal protection should be considered without delay, taking into account when the resolution was learned of, registered and implemented and its effect on the company's assets.

The Examination Power of the Trade Registry Director and the Effect of Registration

The trade registry directorate examines the statutory conditions of the registration request and the sufficiency of the documents submitted. When a clear deficiency of authority, form or quorum is identified, the registration may be refused. However, a complex evaluation of evidence, the parties' statements and a discussion of invalidity going to the merits of the company's internal dispute will in most cases require a court judgment.

Registration Does Not Cure a Null or Non-Existent Resolution

The registration and announcement of a board of directors resolution in the trade registry does not by itself remove the deficiency in the constitutive elements of the resolution or its contravention of Article 391 TCC. On the other hand, the protection of third parties who act in reliance on the registration must be assessed separately from the invalidity of the resolution.

A Complementary Request May Be Required to Correct the Registry Entry

After the declaration of invalidity, in order for the registered consequences of the resolution to be deleted or corrected, the court judgment must be notified to the trade registry and the relevant entries must be updated. The prayer for relief must be framed so as to include this implementation need.

Interim Injunction and Provisional Legal Protection

Filing the action does not by itself stop the implementation of the board of directors resolution. If the implementation of the resolution would cause damage that is difficult to remedy, an interim injunction may be requested under Article 389 et seq. of the Code of Civil Procedure (HMK).

The Injunction Request Must Be Concrete and Proportionate

The request must clearly indicate which transaction is to be stopped. Instead of a broad injunction halting all of the company's activity, targeted measures should be considered, such as:

• Suspending the registration or implementation of a particular change of representation,
• Preventing a particular transfer of immovable property or shares,
• Postponing a general assembly call based on the resolution,
• Temporarily limiting the use of a particular bank authority,
• Protecting the resolution book and digital records.

Prima Facie Proof and Security

The claimant must prove approximately (prima facie) the likelihood that the resolution is non-existent or null and the danger that would arise if the resolution were implemented. The court may require security. The extent to which the injunction would affect the company's activity and third parties is also taken into account.

What Documents Should Be Collected for Proof?

1. The current articles of association and their amendments.
2. Records of board members and the division of duties.
3. Meeting calls, e-mails, notarial notices and delivery records.
4. The agenda, draft resolutions and documents shared before the meeting.
5. The attendance list and electronic participation records.
6. The board of directors resolution book and notary opening/closing records.
7. Signed resolution pages, e-signature verification data and timestamps.
8. Internal regulations, signature circulars and records of authority of representation.
9. Trade registry application, registration and announcement documents.
10. Contract, bank, land registry and accounting records relating to the implementation of the resolution.
11. Documents showing the conflict of interest or the related-party transaction.
12. Current records of loss and transaction risk showing the need for an injunction.

How Should a Strategic Check Be Carried Out Before the Action?

First, It Must Be Determined Whether the Resolution Was Actually Formed

The meeting or written resolution method, the call, attendance, signature and quorum records are compared. If a constitutive element is missing, non-existence is emphasised; if the resolution has been formed but its content is seriously unlawful, nullity is emphasised.

The Content of the Resolution and the Organ's Authority Must Be Examined

It is determined on what statutory or articles-of-association authority the resolution is based, whether it falls within the non-transferable power of another organ and whether it affects the company's basic structure.

Implementing Acts Must Be Mapped Separately

The questions of whether the resolution has been registered, whether a bank or land registry transaction has been made, whether a contract with a third party has been concluded and whether a general assembly call has been made must be answered. The action and injunction requests must be framed to be result-oriented, so as not to be satisfied with a mere declaration of the resolution.

The Prayer for Relief Must Be Framed Clearly and in the Alternative

Depending on the specific case, a declaration of non-existence; if that is not accepted, a declaration of nullity; annulment if there is a special annulment provision; stopping the implementation of the resolution; correction of the registry entry; and liability claims must be set out without being confused with one another.

Conclusion

The invalidity of a joint-stock company board of directors resolution does not consist merely of an allegation of unlawfulness in the text of the resolution. First, it must be determined whether the constitutive elements of the resolution came into being, whether the meeting or written resolution method was properly operated, whether the quorum was satisfied and on what organ's authority the resolution is based. A deficiency in a constitutive element may produce non-existence; serious violations under Article 391 TCC where the resolution exists may produce nullity; and only the cases for which there is a special statutory provision may produce annullability.

Registration and implementation do not cure a non-existent or null resolution; however, the position of third parties and the implementing acts are assessed separately. Since filing an action does not stop the resolution by itself, a targeted interim injunction request should be framed if there is a risk of damage that is difficult to remedy. An effective legal review compares in a single file the articles of association, internal regulations, call and signature records, resolution book, electronic data, registry records and the factual consequences of the resolution.

Frequently Asked Questions

Can annulment of a board of directors resolution always be requested?

No. No general annulment action is provided for board of directors resolutions. Non-existence of the resolution or its nullity under Article 391 TCC may be sought; an annulment action arises in cases for which there is a special statutory provision.

Can a member who was not called to the meeting invalidate the decision?

Failure to make the call is a serious irregularity; however, the specific case determines the outcome. The elimination of the member's right to participate in management, the authority to call, the articles of association and the effect on the quorum are examined together.

If there is no meeting quorum, is the decision regarded as null or non-existent?

The failure of the constitutive decision quorum to come into being is mostly associated with the sanction of non-existence. However, the source of the quorum used and the nature of the violation must be assessed in the specific decision.

How does a decision by circulation become valid?

A resolution proposal must be presented in writing to all members, no member may request a meeting, and the majority of the total number of members must approve the proposal in writing. The signed documents must be brought together in the resolution book.

Is an electronic board of directors resolution valid?

Yes, an electronic meeting or a resolution with an electronic signature is valid if the statutory and technical conditions are satisfied. The electronic system does not replace the review of authority, quorum and content.

Can a member with a conflict of interest vote?

In a conflict of personal interest within the scope of Article 393 TCC, the member cannot take part in the deliberation. The effect of the violation on the decision and the member's liability are assessed according to the specific case.

Is a null board of directors resolution valid if it has been registered in the trade registry?

No. Registration does not by itself cure absolute invalidity or non-existence. However, the good faith of third parties and their reliance on the registry must be examined separately.

Is there a three-month period for a nullity action?

The declaration of nullity and non-existence under Article 391 TCC is not subject to the three-month period for the general assembly annulment action. Even so, delay may create risk in terms of Article 2 TMK, legal interest and third-party reliance.

Against whom is the action brought?

As a rule, the defendant is the company as a legal entity. The personal liability of the members who adopted the resolution may separately be the subject of a compensation or liability action.

Does filing the action stop the implementation of the resolution?

No. An interim injunction must be requested in order to stop the implementation, and the danger of damage that is difficult to remedy must be shown by prima facie proof.

Sources

Legislation and Official Sources

1. Turkish Commercial Code No. 6102, in particular Art. 357, 360, 366-371, 390-393: Text of the law published by the Ministry of Trade

2. Code of Civil Procedure No. 6100, in particular Art. 106 and Art. 389 et seq.: Legislation Information System

3. Ministry of Trade, Central Registry Recording System and electronic resolution practices: MERSİS

Decisions of the Court of Cassation

4. Court of Cassation 11th Civil Chamber, E.2015/3129, K.2016/804, T.26.01.2016: Text of the decision

5. Court of Cassation 11th Civil Chamber, E.2016/5382, K.2017/3443, T.06.06.2017: Text of the decision

6. Court of Cassation 11th Civil Chamber, E.2023/5865, K.2024/8480, T.28.11.2024: Text of the decision

7. Court of Cassation 11th Civil Chamber, E.2014/16882, K.2015/2676, T.27.02.2015: Text of the decision

8. Court of Cassation 11th Civil Chamber, E.2016/4850, K.2017/3533, T.08.06.2017: Text of the decision

Academic Sources

9. Erdoğan Moroğlu, Anonim Ortaklıklarda Genel Kurul Kararlarının Hükümsüzlüğü (Invalidity of General Assembly Resolutions in Joint-Stock Companies), the relevant conceptual distinctions.

10. Tamer Pekdinçer, “Anonim Şirketlerde Yönetim Kurulu Kararlarının Geçerliliği” (Validity of Board of Directors Resolutions in Joint-Stock Companies), academic work: DergiPark

11. TBB Dergisi, “Anonim Şirket Yönetim Kurulu Kararlarının Hükümsüzlüğü” (Invalidity of Joint-Stock Company Board of Directors Resolutions): Article