We are a general practice Turkish law firm based in Istanbul, providing legal services to local and international clients. We actively work in all fields of private law with an emphasis on business law matters.trAKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Proposed_Amendments_to_Notification_LawSince its enactment in 1959, Notification Law No. 7201 (the Law) has been subject to justifiable criticism. Accordingly, it was amended many times in the last half-century. However, technological developments in the last two decades have made the Law even more outdated than before. The provisions of the Law still reflect the long-standing traditions of Turkish law, which, from a procedural point of view, causes an inevitable slowness in proceedings. In the 21st century, there are still cases in Turkey where a creditor is obliged to send the same petition or payment order to fifteen different addresses of the recipient (i.e. the debtor or the claimant) in order to have made a due notification. The latter is simply not acceptable. Considering the above, the Turkish government proposed the Draft Law No 1/742 amending the Law (the Draft Law) to the Parliament in October 2009. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Share_transfer_issuesThe epicenter of a share purchase deal consists of the due performance of share transfer. In case the shares are not duly transferred, the transfer may not be binding on (and enforceable against) the entity in question and/or third parties. Therefore, share transfer must be performed in a precise and orchestrated manner. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Employment-related_Consequences_of_Workplace_TransferEmployment-related consequences of workplace transfer in asset purchase deals in Turkey.AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Major_Security_Mechanisms_under_Turkish_LawFew would deny that “security” is a key term in business. Whatever activity a company carries out, there is always a risk that its debtors do not or cannot fulfill their payment obligations, which may trigger an “event of default [1]. Events of defaults are undesirable situations, but they do happen. Thus, it is up to the creditor of any agreement to take the necessary precautions against a potential failure of its debtor in performing its payment obligations. Such precautions would certainly be in the nature of solid security provided by debtor. Although it is possible for creditors to secure their receivables by using various methods, some of the foreign-imported practical inventions (e.g., trust) rarely lead to success. Below, you may find summary information on the most widely used security mechanisms in Turkey. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Aircraft_Finance_in_TurkeyThe Turkish aviation industry and the civil aviation sector have made remarkable progress over the last decade in terms of fleet size, passenger number and profitability. As a consequence of new players’ intention to enter this attractive market and the existing players’ thirst for growth, aircraft finance has been in high demand these last years. Below you may find the essentials of the Turkish aircraft finance practice from a legal standpoint. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Petroleum_Affairs_in TurkeyLocated at the crossroads of Europe, Russia, the Caspian Region and the Middle East, Turkey is an energy corridor linking the supplier countries to principal consumer markets and thus stands as a key player in ensuring energy security through diversification of resources and routes. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Setting_up_a_company_in_TurkeyIn accordance with the principle of equal treatment specified in the Foreign Direct Investment Law No. 4875 of 2003, foreign investors may freely set up companies in Turkey [1]. Apart from ordinary incorporation documents (e.g. Articles of Association, signature declarations) which are also requested from Turkish persons/entities, there is no additional approval, licensing or permission requirement for foreign investors while establishing a company in Turkey, except for the mere notification obligation to the Foreign Direct Investment Department of the Undersecretariat of Treasury for statistical purposes. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=First_Step_in_Turkey:_Liaison_Office_or_BranchThe ongoing financial turmoil has caused foreign investors, which contemplate entering the Turkish market, to act more prudently. The necessity of avoiding substantial tax liability and further hesitations as regards a new market have directed such investors to resort to more marginal solutions such as establishing a liaison office (irtibat burosu) or a branch (sube) as a first step prior to incorporating a separate legal entity in Turkey. Which one of these two alternatives is the right choice depends on the investor’s business needs and thus should be evaluated on a case-by-case basis. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Lease_Agreements_under_Turkish_LawEnacted in 1955, Law No. 6570 on Real Property Leases (the Law) is the main piece of legislation governing landlord-tenant relationships in Turkey. The lease of all “covered” (i.e., surrounded by walls and having a roof) real properties, which are located (i) within the boundaries of a municipality or (ii) in a harbor, pier or railway station, are subject to the Law. The provisions of the Turkish Code of Obligations No. 818 (the TCO) that do not contradict with the Law are also applicable to the above-mentioned leases. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Disclosure_or_Ponzimonia?During the “Maintaining Market Integrity in Turbulent Times: Surveillance, Inspection and Enforcement for Securities” forum that was recently held in Istanbul and co-organized by the U.S. Securities and Exchange Commission and the Capital Markets Board (the CMB) of Turkey, one of the most debated issues was the implementation and functioning of adequate public disclosure mechanisms used to prevent market manipulation and formation of ponzi schemes [1]. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Promissory_Notes_under_Turkish_LawThousands of commercial agreements are executed every day, most of the times with at least one party having a payment obligation. Although the said party may have the option to fulfil this obligation by paying cash on the due date, other means of payment such as negotiable instruments are also frequently used. From a Turkish law perspective, this is because negotiable instruments are not just payment tools. Their ease of transferability and most importantly their independence from the underlying contractual relationship between the parties of the relevant transaction make them the preferred choice for a number of other reasons. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Temporary_Legal_Protections_under_Turkish_lawIn an ideal world, anyone whose legally recognized rights are violated would have the right to apply to a competent judicial authority (normally a court) and seek appropriate remedy. Fortunately, it is the case in Turkey.However, in order not to face any unpleasant surprise at the end, one should know -from the outset of the relevant legal proceeding- how to effectively use applicable legal precautions protecting its rights. Failure in resorting to such precautions on time may lead to severe consequences for any claimant. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=anti_corruption_practices_in_TurkeyMost countries assure independency and impartiality of their civil servants by means of to-the-point legislation. Specific laws play an important role in the enhancement of state administration and elimination of time-consuming bureaucracy which traditionally goes hand in hand with corruption. They also contribute to the creation of a pacifist social environment where citizens’ trust in public authority is soaring. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Compulsory_Use_of_the_Turkish_Language_in_Agreements_Executed_in_TurkeyOne who does business in Turkey and reads the above heading may ask himself whether there is such a requirement. Well, the answer is “Yes”, but only a few are aware of it. On the other hand, the ones who still ignore the said requirement may face unpleasant situations such as the invalidity of a key agreement which they signed recently with their top business partner.AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=Piercing_the_Corporate_Veil_under_Turkish_Law_(the_Alter_Ego_Theory)It is widely recognized that a company has a legal personality that is distinct from those of its shareholders. Accordingly, while doing business with a company, one is not dealing with its shareholders, but with an artificial entity to which the law attributes a separate personality. AKDOGAN | USLAShttp://www.akdogan-uslas.av.tr/default.asp?sayfa=makaleler&no=The_Ultra_Vires_Doctrine_under_Turkish_LawWhen a company is first established, its shareholders may be confident that -through that company- they will be able to carry out any and all activities. In accordance with Turkish law, this would not be a right reasoning. One day, the said shareholders may suddenly discover that their “almighty” company is legally not capable of entering into a certain transaction, or even more strikingly, part of the transactions already executed by it are null and void. How can this be?