Shareholders’ Agreements in Turkey 2026 — Right of First Refusal, Tag-Along, Drag-Along, Deadlock, Veto Rights and Reflecting the Deal in the Articles (Turkish Commercial Code Arts. 340, 493, 577, 595)

Turkish version (Türkçe sürüm): Pay Sahipleri Sözleşmesi

A foreign investor who becomes a shareholder in a Turkish company, or sets up a company with a Turkish partner, usually builds the relationship on two documents. The first is the articles of association, which are registered with the trade registry (in a limited liability company, the company contract). The second is the shareholders’ agreement signed between the shareholders. Rights of first refusal, tag-along and drag-along rights, the right to nominate board members, veto rights and deadlock solutions are usually written into this second agreement. As a rule, however, a shareholders’ agreement binds only those who signed it; it does not bind the company or third parties who are not party to it. In a joint stock company (anonim şirket, A.Ş.), the articles may depart from the Turkish Commercial Code only where the Code expressly allows it (Turkish Commercial Code (TCC) Art. 340). In a limited liability company (limited şirket, Ltd.), rights of first offer, first refusal, repurchase and purchase over shares become binding when written into the company contract (TCC Art. 577). This guide explains, from a foreign investor’s perspective, which provisions of a shareholders’ agreement should be reflected in the articles, share transfer restrictions (TCC Arts. 490-494 and 595), how to draft right of first refusal, tag-along and drag-along clauses, the statutory default outcomes in a deadlock and the court routes (TCC Arts. 390, 531 and 636-641), penalty clauses, governing law and arbitration, Competition Board notification and stamp duty.

What is a shareholders’ agreement, and whom does it bind?

A shareholders’ agreement is a contract in which the shareholders of a joint stock or limited liability company (or persons who will become shareholders) regulate among themselves how they will conduct their relationship as shareholders. In Turkish practice it is also called a “hissedarlar sözleşmesi” or “ortaklık sözleşmesi”, or by its English name, “shareholders’ agreement (SHA)”. The Turkish Commercial Code does not regulate this agreement separately; it is a contract governed by the general provisions of the Turkish Code of Obligations. It is therefore valid unless it breaches mandatory provisions of law, morality, public order or personality rights, or its subject matter is impossible (TCO Art. 27(1)). The invalidity of some of its provisions does not affect the others, unless it is clear that the agreement would not have been concluded without them (TCO Art. 27(2)).

The most important feature of the agreement is its relative effect: it binds only the shareholders who signed it (and their heirs as universal successors); a new shareholder who acquires shares is not bound by it unless it accedes to the agreement. The company as a legal entity, the board of directors, the general assembly and shareholders who have not signed the agreement are not bound by it. In a first-instance judgment upheld by the 11th Civil Chamber of the Court of Cassation (Yargıtay) (11th Civil Chamber, 11 October 2016, E.2016/1275, K.2016/8000), it was accepted that an agreement among shareholders binds only the shareholders party to it, is not binding on the company as a legal entity and does not override the majority principle. In a more recent case (a regional court of appeal judgment upheld by majority by the 11th Civil Chamber’s decision of 3 February 2025, E.2024/1865, K.2025/478), it was stated that a reference in the articles to the provisions of a shareholders’ agreement is not valid, and that, under the principle of privity of contract, a shareholders’ agreement cannot be relied on against a person who is not party to it.

The two documents need to be designed together. The shareholders’ agreement sets out the shareholders’ actual deal in detail; the articles carry the part of that deal that must have effect against the company and third parties. If the two conflict, the company operates in accordance with the articles; between the shareholders, the conflict can only be resolved as a breach of contract and a damages issue. A good shareholders’ agreement therefore contains a conformity clause along the lines of “the parties undertake to vote in accordance with this agreement and to bring the articles into line with it”. The steps for setting up a company are explained in our guides Company Formation in Turkey for Foreigners and Anonim Şirket Kuruluşu (in Turkish).

Which provisions can go into the articles?

In a joint stock company, the articles may depart from the provisions of the Turkish Commercial Code on joint stock companies only where the Code expressly allows it (TCC Art. 340). This “principle of mandatory law” (emredicilik ilkesi: the articles may depart from the Code only where it expressly allows) prevents many of the mechanisms in a shareholders’ agreement from being transferred as they are into the articles. In addition, except for the exceptions provided by law, no obligation other than paying the share price, or the premium above the nominal value of the share, may be imposed on a shareholder through the articles (TCC Art. 480(1)). When these two rules are applied together, whether call and put options and drag-along provisions, which impose on a shareholder an obligation to buy or sell shares against its will, can be included in the articles of a joint stock company is disputed in legal writing. One view argues that these provisions breach the single-obligation principle; it is argued in legal writing, on the other hand, that a right of first refusal does not impose an additional obligation on the shareholder. As there is no settled Court of Cassation case law on this issue, the proper place for these mechanisms in a joint stock company is the shareholders’ agreement.

The picture is different in a limited liability company. TCC Art. 577 lists certain provisions that are binding only if they are provided for in the company contract. These include rights of first offer, first refusal, repurchase and purchase over shares (Art. 577(1)(b)), additional payment and ancillary performance obligations, non-compete obligations, veto rights granted to certain shareholders over certain general assembly resolutions, and grounds for exit and exclusion. In a limited liability company, writing option and first refusal rights into the company contract therefore makes them effective at company level as well.

One further detail matters: making a reference in the articles to the shareholders’ agreement (such as “share transfers are subject to the conditions in the shareholders’ agreement”) is not enough. In the 2025 decision mentioned above, such a reference was not considered valid. The grounds restricting transfers, the approval procedure and the time limits must be written expressly in the text of the articles themselves. The 11th Civil Chamber of the Court of Cassation has also stressed (17 March 2025, E.2024/6481, K.2025/1865) that, in order to rely on grounds for refusal such as a threat to the company’s economic independence, these must be provided for in the articles.

Share transfers and transfer restrictions

Right of first refusal, tag-along and drag-along clauses all ultimately lead to a share transfer. It is therefore necessary to know first how shares are transferred under Turkish law. In a joint stock company, unless otherwise provided by law or the articles, registered shares may be transferred without any restriction; a transfer by legal transaction may be made by transferring possession of the endorsed registered share certificate to the transferee (TCC Art. 490(1)-(2)). Registered shares that are not fully paid, however, may be transferred only with the company’s approval, except where they pass by inheritance, partition of an estate, the matrimonial property regime or enforcement proceedings; the company may refuse approval only if the transferee’s ability to pay is doubtful and the security requested has not been provided (TCC Art. 491).

In joint stock companies that have not printed share certificates, shares are transferred, in Court of Cassation practice, under the rules on assignment of receivables (for example, Court of Cassation Assembly of Civil Chambers, 12 November 2014, E.2014/11-801, K.2014/891). An assignment of a receivable is not valid unless made in writing (TCO Art. 184). The transfer can be relied on against the company only after entry in the share ledger; in relations with the company, only the person registered in the share ledger is deemed a shareholder (TCC Art. 499). For a foreign investor this means that, at closing, the endorsement and delivery of the share certificate or the signing of a written assignment, followed by the board’s approval of the transfer and its entry in the share ledger, should each be documented separately.

In joint stock companies whose shares are not traded on a stock exchange, the articles may provide that registered shares may be transferred only with the company’s approval (TCC Art. 492(1)). The company may then refuse the request for approval in two ways: by relying on an important ground set out in the articles, or by offering to buy the transferor’s shares, for its own account or for the account of other shareholders or third parties, at their real value at the time of the application (TCC Art. 493(1); in practice called an “escape clause”). Provisions of the articles on the composition of the shareholder base constitute an important ground if they justify the refusal of approval with regard to the company’s business purpose or the economic independence of the business (TCC Art. 493(2)). If the transferee does not reject this price within one month of learning the real value, it is deemed to have accepted the company’s offer to take over the shares (TCC Art. 493(6)). Until the approval required for the transfer is given, ownership of the shares and all rights attached to them remain with the transferor (TCC Art. 494(1)); if the company has not rejected the request within three months at the latest from receiving it, or if the rejection is unjustified, approval is deemed given (TCC Art. 494(3)). Adding a transfer restriction to the articles later requires the affirmative votes of shares representing at least seventy-five per cent of the capital (TCC Art. 421(3)).

In a limited liability company, the transfer of a share and the transaction creating the obligation to transfer must be made in writing and the signatures must be certified by a notary (TCC Art. 595(1)). Unless otherwise provided in the company contract, the transfer requires the approval of the general assembly and becomes valid upon that approval; unless otherwise provided in the company contract, the general assembly may refuse approval without giving any reason (TCC Art. 595(2)-(3)). The company contract may prohibit the transfer of shares (TCC Art. 595(4)); if the transfer is prohibited or approval is refused, the shareholder’s right to exit on just cause is preserved. If the general assembly does not reject the application within three months, approval is deemed given (TCC Art. 595).

Disputes over the share transfer agreement itself (non-payment of the price, breach of representations and warranties) are covered in our guide Pay (Hisse) Alım Sözleşmesi Uyuşmazlıkları ve Tahkim (in Turkish), and the details of transfer formalities and restrictions in Anonim ve Limited Şirkette Pay Devri (in Turkish).

Right of first refusal and right of first offer

The most common tool for keeping exits under control is the right of first refusal. Under a right of first refusal, a shareholder wishing to sell first agrees terms with a third party and then notifies those terms to the other shareholders; the other shareholders have the right to buy the shares at the same price and on the same terms. Under a right of first offer, by contrast, the shareholder wishing to sell must offer its shares to the other shareholders before approaching a third party; if the shareholders do not accept the offer, the shareholder may sell to a third party within a certain period, usually at a price not lower than the one offered. A call option gives a shareholder the right to buy another’s shares on certain terms; a put option gives the right to sell one’s shares to another.

The statutory pre-emption right over immovable property (TCivC Arts. 732-734) does not apply to shares; a right of first refusal over shares arises from contract. All the elements of the right must therefore be written into the agreement. The Code expressly allows rights of first offer, first refusal, repurchase and purchase over shares in a limited liability company to be written into the company contract (TCC Art. 577(1)(b)). In a joint stock company there is no express statutory provision on rights of first refusal; in practice the right is written into the shareholders’ agreement and supported by a transfer restriction in the articles. There is an important difference here: when a joint stock company refuses approval of a transfer “by offering to buy the shares at their real value”, the price is not the price agreed with the third party but the real value at the time of the application; the transferee may ask the court to determine this value (TCC Art. 493). The “same price and terms” right of first refusal in the shareholders’ agreement and the “purchase at real value” mechanism in the articles should therefore be drafted to fit together.

Breach of a right of first refusal is the most misunderstood issue. If a shareholder transfers its shares to a third party in breach of the shareholders’ agreement, the transfer does not become invalid merely because it breaches that agreement, since the agreement does not bind a buyer who is not party to it. What can prevent the transfer from having effect at company level is the approval (transfer restriction) provision in the articles and a refusal given by the company within the time limit under that provision (TCC Arts. 493-494; in a limited liability company, Art. 595). The foreign investor’s protection should therefore be built in two layers: a right of first refusal and a heavy contractual penalty in the shareholders’ agreement, and an approval requirement and grounds for refusal in the articles.

Tag-along and drag-along

A tag-along right gives the minority shareholder, when the majority shareholder sells its shares to a third party, the right to sell its own shares to that buyer at the same price and on the same terms. The aim is to prevent the minority from being left alone with a new controlling shareholder it does not want. A drag-along obligation works the other way: a majority shareholder wishing to sell the whole company may compel the minority shareholder to join the sale at the same price and on the same terms. Since most buyers want to acquire the whole company, drag-along makes the majority shareholder’s exit easier.

Neither right is regulated by statute in Turkish law; they are written into the shareholders’ agreement under freedom of contract. Since a tag-along right does not bind the buyer directly, the clause is usually framed as an obligation of the seller: the seller may not sell its shares unless it procures that the buyer also acquires the minority’s shares on the same terms. In a drag-along clause, the minority is protected by agreeing a minimum price or valuation condition, a requirement that the sale be made to an independent third party, and that the minority gives warranties only as to title to its shares and its own capacity.

Enforcing a drag-along clause depends on the minority shareholder’s cooperation: in a joint stock company, endorsement and delivery of the share certificate or a written assignment is required; in a limited liability company, a transfer agreement signed before a notary and general assembly approval (TCC Arts. 490 and 595). In practice, therefore, depositing the share certificates with an escrow agent, transfer documents signed in advance, a call option and a heavy contractual penalty are used together. Relying on a power of attorney alone is not enough, because the principal may restrict or revoke the authority it has granted at any time (TCO Art. 42; for the mandate contract, Art. 512(1)). In a limited liability company, writing a purchase right into the company contract (TCC Art. 577(1)(b)) also supports the drag-along obligation at company level. In a joint stock company, including a drag-along provision in the articles is disputed under the single-obligation principle (TCC Art. 480(1)), as it imposes an obligation to sell on the shareholder.

In both clauses the concept of “same terms” should be defined in detail: if items such as performance-linked additional payments (earn-outs), payments for non-compete undertakings, management agreements or post-closing price adjustments are kept outside the price, the minority shareholder may be forced to sell for a lower consideration.

Board, privileged shares and veto rights

The second critical issue for a foreign investor is management: who appoints how many board members, and which decisions cannot be taken without the investor’s consent. In a joint stock company, the articles may grant certain share groups, shareholders forming a particular group and the minority the right to be represented on the board; this right is in the nature of a privilege, and the general assembly must elect the nominated candidate unless there is just cause (TCC Art. 360). Voting privileges may also be granted; however, a share may carry at most fifteen votes, and this limit may be exceeded only by court decision where institutionalisation requires it or just cause is proven (TCC Art. 479(2)). Voting privileges cannot be used for resolutions amending the articles or for resolutions on release of liability and bringing liability actions (TCC Art. 479(3)). Resolutions amending the articles that may infringe the rights of privileged shareholders cannot be implemented unless approved by a special meeting of the privileged shareholders (TCC Art. 454).

Veto rights, on the other hand, are mostly created through increased quorums. Unless the articles provide for a higher quorum, the board meets with a majority of its total members and takes decisions by a majority of the members present (TCC Art. 390(1)); the meeting and decision quorums of the general assembly are also regulated so that the law or the articles may provide for higher quorums (TCC Arts. 418 and 421(1)). If the articles set a quorum for certain decisions that makes the investor’s vote necessary, the investor acquires a de facto veto over those decisions. In a limited liability company, the company contract may grant certain or identifiable shareholders a veto over certain general assembly resolutions (TCC Art. 577).

The reserved matters list usually covers approval of the budget and business plan, investments above a certain amount, borrowing and granting security, related-party transactions, appointment of senior managers, capital increases and decreases, mergers, demergers, changes of legal form, liquidation, profit distribution and amendments to the articles. Some of these decisions fall within the competence of the general assembly and some within that of the board. The board has non-transferable and inalienable duties and powers, such as the senior management of the company and the giving of related instructions, and the appointment and removal of managers other than branch managers (TCC Art. 375(1)(a) and (d); subparagraph (d) as amended by Law No. 7511). Board members must perform their duties with the care of a prudent manager and protect the company’s interests in good faith (TCC Art. 369(1)). A member appointed by the investor therefore cannot vote against the company’s interests on the strength of the shareholders’ agreement; the validity of agreements binding the votes of board members is disputed in legal writing.

Voting agreements, under which shareholders undertake to cast their votes at the general assembly in a certain way, are generally accepted as valid in legal writing, unless they breach mandatory provisions of law or morality (Moroğlu, Özellikle Anonim ve Limited Ortaklıklarda Oy Sözleşmeleri). However, a vote cast in breach of the agreement does not automatically become invalid; the general assembly resolution remains valid, and the consequence is the breaching shareholder’s liability for damages or a contractual penalty. The meaning of privileged shares and group structures is explained, using the example of a listed company, in our guide A Grubu İmtiyazlı Paylar (in Turkish).

Deadlock and resolution mechanisms

A deadlock is a situation in which the company cannot take important decisions because the votes of the shareholders, or of the board members they appoint, are evenly split, or because a veto right is exercised. The risk is high in 50/50 joint ventures and in structures where the foreign investor is granted broad veto rights. The law provides default outcomes for some situations; these do not resolve the deadlock, however, but only determine how the decision falls.

On the board of a joint stock company, the law does not give the chair a casting vote; a tie results in the rejection of the proposal. In a limited liability company, by contrast, the chair of the board of managers has a statutory casting vote; who holds the chair in a 50/50 limited liability company is therefore a critical point of negotiation. In the event of a tie at the general assembly, no board can be elected, no financial statements approved and no profit distributed. Since board members are elected for at most three years (TCC Art. 362(1)), a long deadlock can in time turn into a missing body.

A deadlock resolution mechanism that works without leaving matters to the statutory default should therefore be written into the shareholders’ agreement. The mechanisms below are used on their own or in stages.

Where the buyer in a share purchase mechanism is to be the company itself, separate limits apply: a joint stock company may not acquire its own shares for consideration in excess of, or so as to exceed, one tenth of its share or issued capital (TCC Art. 379(1)); the company granting an advance, loan or security to another person for the purpose of acquiring its own shares is also void (TCC Art. 380). In deadlock solutions, the buying party should therefore be structured as the shareholders themselves.

Dissolution, exit and exclusion on just cause

If the contractual mechanisms do not work, or were never written, the last resort is the court. In a joint stock company, where there is just cause, holders of shares representing at least one tenth of the capital, or one twentieth in publicly held companies, may ask the commercial court of first instance at the company’s seat to order the dissolution of the company. Instead of dissolution, the court may order that the claimant shareholders be paid the real value of their shares as at the date closest to the judgment and removed from the company, or another suitable and acceptable solution (TCC Art. 531). In a limited liability company, where there is just cause, every shareholder may ask the court to dissolve the company; here too, instead of dissolution, the court may order payment of the real value of the claimant’s share or another solution (TCC Art. 636(3)). In addition, every shareholder may sue for permission to exit the company on just cause (TCC Art. 638(2)). A shareholder leaving the company is entitled to an exit payment corresponding to the real value of its share (TCC Art. 641(1)).

The Court of Cassation treats dissolution as a last resort. In a decision concerning a closely held family joint stock company, the Assembly of Civil Chambers accepted that personal discord cannot, as a rule, by itself be a ground for dissolving a capital company; but that, since the importance of personal relations between the shareholders cannot be ignored in family companies, hostility may constitute just cause if it is concretely proven to harm the company’s functioning, and it upheld the lower court’s insistence judgment finding just cause (Assembly of Civil Chambers, 28 May 2025, E.2025/11-121, K.2025/364). In a case concerning two 50/50 limited liability companies that had long been inactive, the 11th Civil Chamber of the Court of Cassation reversed a dissolution order given without considering milder solutions such as exclusion of a shareholder, finding it contrary to the principle that dissolution is a last resort (11th Civil Chamber, 15 February 2022, E.2020/8247, K.2022/1130). The same Chamber stated that, in a limited liability company with equal shareholdings, a court choosing exclusion instead of dissolution must give concrete reasons (11th Civil Chamber, 12 May 2025, E.2024/5016, K.2025/3284).

There was an important change in 2026 for two-shareholder limited liability companies. Under the Code, applying to court for the exclusion of a shareholder on just cause is a non-transferable power of the general assembly, and this resolution is passed with a qualified quorum (TCC Arts. 616(1)(h) and 621(1)(h)). In a two-shareholder company, since this quorum could not be reached, particularly in an equal-shareholding structure or for a shareholder not holding an absolute majority of the capital, it was accepted in practice that an exclusion action could not be brought in two-shareholder limited liability companies. By its decision of 25 December 2025, E.2025/128, K.2025/273 (Official Gazette of 17 March 2026, No. 33199), the Constitutional Court annulled TCC Art. 616(1)(h) and the relevant wording in Art. 621(1)(h) “with respect to two-shareholder limited liability companies”. As a result, the requirement of a general assembly resolution, and of the quorum for that resolution, for an exclusion action no longer applies in two-shareholder limited liability companies. Details are in our guides Limited Şirkette Ortaklıktan Çıkma ve Çıkarma and Haklı Sebeple Şirketin Feshi Davası (in Turkish).

The shareholders’ agreement itself should not be left without a term either. No one may waive their freedoms or restrict them in a manner contrary to law or morality (TCivC Art. 23(2)). Legal writing accepts that, although a specific time limit cannot be fixed in the abstract, indefinite or excessively long transfer prohibitions are reviewed against this standard, and that shareholders’ agreements pursuing a common purpose may be terminated for just cause. The agreement should therefore state expressly its term, renewal, its termination with respect to a party when that party ceases to be a shareholder, and the provisions that survive termination (confidentiality, non-compete, dispute resolution).

Remedies for breach: penalty clauses and lawsuits

Since a shareholders’ agreement does not bind the company, the remedies between the shareholders are the agreement’s real strength. If a penalty has been agreed for non-performance or improper performance of a contract, the creditor may, unless otherwise apparent from the contract, demand either performance or the penalty (TCO Art. 179(1)). If the penalty has been agreed for failure to perform at the specified time or place, the creditor may demand the penalty together with the principal obligation, unless it has expressly waived this right or accepted performance without reservation (TCO Art. 179(2)). The penalty is payable even if the creditor has suffered no loss; if the loss exceeds the penalty, the creditor may claim the excess by proving the debtor’s fault (TCO Art. 180). The parties may freely set the amount of the penalty; the judge reduces of its own motion a penalty it finds excessive (TCO Art. 182(1) and (3)). However, a debtor that is a merchant cannot ask the court to reduce the penalty on the ground that it is excessive (TCC Art. 22). Legal writing discusses whether, for penalty clauses relating to share transfers, the debtor’s merchant status and whether the transaction relates to its commercial business must be assessed separately.

When setting the amount of the penalty, both the real loss the breach would cause the investor and the gain the other party could obtain from the breach should be taken into account. If a lawsuit is to be filed in a Turkish court, prior application to a mediator is a mandatory procedural precondition for bringing the action (dava şartı) in commercial claims for receivables and damages concerning payment of a sum of money (TCC Art. 5/A). Penalty clauses and the judge’s power to reduce them are explained in detail in our guide Cezai Şart ve Hâkimin İndirim Yetkisi (in Turkish).

Governing law, jurisdiction and arbitration

Foreign investors often want the shareholders’ agreement governed by English law or the law of their own country. Contractual obligations are governed by the law expressly chosen by the parties; the choice may be made for all or part of the contract, and may also be made or changed later (PIL Art. 24). Matters relating to the company itself, however, are not affected by this choice. The legal capacity and capacity to act of legal persons is governed by the law of the seat of administration stated in their statutes; if the actual seat of administration is in Turkey, Turkish law may be applied (PIL Art. 9(4)). For a joint stock or limited liability company incorporated in Turkey, the form of share transfers and their effect against the company, the share ledger, the powers of the corporate bodies, quorums, privileges, dissolution and exit are governed by the Turkish Commercial Code.

As for jurisdiction, where there is no exclusive territorial jurisdiction, the parties may confer jurisdiction on a foreign court for disputes arising from a contract with a foreign element; the agreement must be proven by written evidence (PIL Art. 47(1)). In actions by a private-law legal entity against its shareholders, or by shareholders against one another, arising from their status as shareholders, however, the court of the place where the legal entity has its seat has exclusive jurisdiction (CCP Art. 14(2)); choosing a foreign court may therefore be risky for disputes between shareholders arising from the shareholding relationship. Actions to annul general assembly resolutions and for dissolution on just cause, on the other hand, are filed with the commercial court of first instance at the company’s seat under TCC Arts. 445 and 531; whether these actions are arbitrable is disputed in legal writing.

An arbitration clause, by contrast, is a common and suitable solution for contractual disputes between shareholders. International Arbitration Law No. 4686 applies to disputes with a foreign element where the seat of arbitration is in Turkey or where the parties have chosen the provisions of that Law (Art. 1). The fact that at least one of the company shareholders party to the main contract on which the arbitration agreement is based has brought in foreign capital under the foreign capital incentive legislation gives the dispute a foreign element (Art. 2(1)(3)). If the seat of arbitration is abroad, the resulting award is enforced in Turkey through recognition and enforcement (PIL Arts. 60-63; New York Convention).

In practice this distinction means that a shareholders’ agreement governed by English law with arbitration in London works for claims for damages and contractual penalties between the shareholders; but for stopping a transfer at the level of the Turkish company, or annulling a general assembly resolution, Turkish law and the Turkish courts remain decisive. Further details are in our guides Tahkim (HMK m.407-444) and Yabancı Mahkeme ve Hakem Kararlarının Tanınması ve Tenfizi (in Turkish).

Competition Board and listed companies

Veto rights in a shareholders’ agreement are not only a company law issue; they can confer joint control. Control may arise, individually or jointly, de facto or de jure, through rights, contracts or other means that confer the possibility of exercising decisive influence over an undertaking (Communiqué No. 2010/4, Art. 5(2)). According to the Competition Authority’s Guidelines on Cases Considered as a Merger or an Acquisition and the Concept of Control, updated in 2026, veto rights over the budget, the business plan, major investments or the appointment of senior management typically confer joint control; veto rights over matters such as amendments to the articles, capital increases or decreases and liquidation, by contrast, are rights protecting the minority and do not by themselves confer control. Transactions that bring about a change of control and exceed the turnover thresholds do not acquire legal validity without Competition Board approval (Law No. 4054, Art. 7).

In a joint venture that a foreign investor sets up with a local partner, the competition law effect should therefore be considered when drafting the veto list; if approval is required, closing should be made conditional on approval. In companies whose shares are traded on Borsa Istanbul, a shareholders’ agreement may also have capital markets consequences: persons who cooperate on the basis of an express or tacit, oral or written agreement for the purpose of acquiring management control of the target company are considered “persons acting in concert” (Communiqué on Tender Offers II-26.1, Art. 4(1)(ç)), and acquiring management control may trigger a mandatory tender offer (Capital Markets Law No. 6362, Art. 26). The full list of approval processes is in our guide Buying a Turkish Company as a Foreign Investor: Which Approvals Do You Need?, and the Competition Board procedure in Birleşme ve Devralma İzni (in Turkish).

Stamp duty

Documents drawn up in connection with the formation, share transfers, capital increases and extensions of term of joint stock companies, partnerships limited by shares and limited liability companies, and of investment funds, are exempt from stamp duty (Table (2), IV-16, annexed to Stamp Duty Law No. 488). The words “share transfers” were added to this item by Law No. 6728. Other contracts containing a specific amount of money are subject to stamp duty at 0.948% (9.48 per mille); in 2026 the duty payable on a single document cannot exceed TRY 29,115,961.10 (Stamp Duty General Communiqué Serial No. 71).

The exemption is limited to documents drawn up in connection with share transfers. Since the stamp duty position of shareholders’ agreements varies with their content, if the agreement contains specific amounts of money independent of the share transfer (for example, a separate service fee or a loan commitment), these should be set out in a separate document or their tax effect assessed in advance.

Agreement checklist

Common mistakes

• Writing everything into the shareholders’ agreement and leaving the articles standard. The company operates under the articles; a transfer or resolution in breach of the shareholders’ agreement often remains valid, leaving the investor only a damages claim.
• Merely referring to the shareholders’ agreement in the articles. Transfer restrictions and grounds for refusal must be written expressly in the articles.
• Trying to put a call option and drag-along into the articles of a joint stock company. This is disputed because of the single-obligation principle (TCC Art. 480(1)); if this is needed, a limited liability company or a strong contractual structure should be preferred.
• Not writing a deadlock clause in a 50/50 structure. On the board of a joint stock company a tie means the proposal is rejected (TCC Art. 390(3)); at the general assembly no resolution is passed at all.
• Leaving the content and period of the first refusal notice vague. Because the period never starts, a sale can be locked for months.
• Not regulating a change of control at parent company level. If the foreign shareholder’s parent is sold, the shares in the Turkish company are deemed not to have changed hands.
• Keeping the contractual penalty symbolic. In an agreement that does not bind the company, the deterrent effect comes largely from the penalty clause.
• Drafting the veto list without considering competition law. Vetoes over the budget and senior management may confer joint control, and approval is required if the thresholds are exceeded.

Frequently asked questions

Does a shareholders’ agreement bind the company?

No. A shareholders’ agreement is a contract between the shareholders and binds only those who signed it; it does not bind the company as a legal entity, its bodies or persons who are not party to it. The 11th Civil Chamber of the Court of Cassation has also accepted this relative effect in decisions it upheld (11th Civil Chamber, E.2016/1275, K.2016/8000; 11th Civil Chamber, E.2024/1865, K.2025/478).

If the articles and the shareholders’ agreement conflict, which applies?

The company operates under the articles; general assembly and board resolutions are assessed against the articles and the law. A breach of the shareholders’ agreement is resolved between the shareholders as a damages or contractual penalty issue. The agreement should therefore contain an undertaking by the shareholders to bring the articles into line with the shareholders’ agreement.

Is a share transfer made in breach of a right of first refusal invalid?

It does not become invalid merely because it breaches the shareholders’ agreement, since the agreement does not bind a buyer who is not party to it. What can prevent the transfer from having effect at company level is an approval requirement in the articles and a refusal given by the company within the time limit (TCC Arts. 493-494; in a limited liability company, Art. 595). The consequence of the breach of contract is damages and the contractual penalty.

Can a right of first refusal be written into the articles of a joint stock company?

There is no express statutory provision on rights of first refusal in a joint stock company, and the articles may depart from the Code only where expressly allowed (TCC Art. 340). The articles may, however, make the transfer of registered shares subject to company approval, and the company may refuse approval on an important ground set out in the articles or by offering to buy the shares at their real value for its own account or for the account of other shareholders or third parties (TCC Arts. 492-493). The details of the right of first refusal are written into the shareholders’ agreement.

How do rights of first refusal and purchase rights become binding in a limited liability company?

Rights of first offer, first refusal, repurchase and purchase over shares are binding if they are provided for in the company contract (TCC Art. 577(1)(b)). The transfer must also be made in writing, the signatures must be notarised and, unless the company contract provides otherwise, general assembly approval must be obtained (TCC Art. 595).

What is a tag-along right?

A contractual provision giving the minority shareholder, when the majority sells its shares to a third party, the right to sell its own shares to that buyer at the same price and on the same terms. Since it does not bind the buyer directly, it is written so that the seller may not sell its own shares unless it has the buyer also acquire the minority’s shares.

Can drag-along be enforced under Turkish law?

It may be written into the shareholders’ agreement and is binding between the shareholders; but enforcing it depends on the minority taking part in the transfer formalities. Depositing the share certificates with an escrow agent, transfer documents signed in advance, a call option and a contractual penalty are therefore used together. Since the principal may revoke the authority it has granted at any time (TCO Art. 42), a power of attorney alone should not be relied on. Including it in the articles of a joint stock company is disputed because of the single-obligation principle (TCC Art. 480(1)).

What happens if the votes on the board of a joint stock company are tied?

The matter is deferred to the next meeting; if there is a tie again at the second meeting, the proposal is deemed rejected (TCC Art. 390(3)). In a limited liability company, by contrast, the chair of the board of managers has the casting vote in a tie; the company contract may provide otherwise (TCC Art. 624).

Is deadlock in a 50/50 company a just cause for dissolution?

Deadlock is an important element in assessing just cause; but the Court of Cassation treats dissolution as a last resort. Personal discord is, as a rule, not sufficient on its own; particularly in family companies, it may be a just cause if it is concretely proven to harm the company’s functioning (Assembly of Civil Chambers, E.2025/11-121, K.2025/364). Instead of dissolution, the court may order that the claimant be removed against payment of the real value of its shares, or another solution (TCC Arts. 531 and 636(3)).

How is a shareholder excluded from a two-shareholder limited liability company?

By its decision of 25 December 2025, E.2025/128, K.2025/273 (Official Gazette of 17 March 2026), the Constitutional Court annulled TCC Art. 616(1)(h) and the relevant wording in Art. 621(1)(h), which required a general assembly resolution and quorum for an exclusion action, with respect to two-shareholder limited liability companies. A general assembly resolution is therefore no longer required for an exclusion action in these companies; exclusion still requires just cause and a court decision (TCC Art. 640).

Within what period must a joint stock company decide on approval of a share transfer?

If the company has not rejected the request within three months at the latest from receiving it, or if the rejection is unjustified, approval is deemed given (TCC Art. 494(3)). Until approval is given, ownership of the shares and all rights attached to them remain with the transferor (TCC Art. 494(1)).

Can a foreign law be chosen for a shareholders’ agreement?

Yes. Contractual obligations are governed by the law expressly chosen by the parties (PIL Art. 24). However, the form of share transfers, the share ledger, the corporate bodies, quorums, dissolution and exit for a company incorporated in Turkey remain governed by Turkish law.

Is an arbitration clause in a shareholders’ agreement valid?

It is valid for contractual disputes between the shareholders. The fact that at least one shareholder has brought in foreign capital gives the dispute a foreign element (International Arbitration Law No. 4686, Art. 2(1)(3)). Actions to annul general assembly resolutions and for dissolution on just cause, however, are filed with the commercial court of first instance at the company’s seat under TCC Arts. 445 and 531; in actions between shareholders arising from their status as shareholders, the court of the company’s seat also has exclusive jurisdiction (CCP Art. 14(2)).

Can a court reduce a contractual penalty?

The judge reduces of its own motion a penalty it finds excessive (TCO Art. 182(3)). However, a debtor that is a merchant cannot ask for the penalty to be reduced on the ground that it is excessive (TCC Art. 22). The penalty is payable even if the creditor has suffered no loss; if the loss exceeds the penalty, the excess may be claimed by proving the debtor’s fault (TCO Art. 180).

Do veto rights require Competition Board approval?

Veto rights over the budget, the business plan, major investments or the appointment of senior management may confer joint control. If a transaction bringing about a change of control exceeds the thresholds updated by Communiqué No. 2026/2 (combined Turkish turnover of TRY 3 billion with at least two parties each above TRY 1 billion; or Turkish turnover of the target above TRY 1 billion and worldwide turnover of another party above TRY 9 billion), Competition Board approval is required (Law No. 4054, Art. 7; Communiqué No. 2010/4, Arts. 5 and 7).

Is a share transfer agreement subject to stamp duty?

No. Documents drawn up in connection with share transfers of joint stock companies, partnerships limited by shares and limited liability companies are exempt from stamp duty (Table (2), IV-16). Provisions or side protocols containing a specific amount of money independent of the share transfer may, however, be subject to duty at 0.948%; in 2026 the maximum per document is TRY 29,115,961.10.

Related guides

• Legal Guide for Foreign Investors in Turkey — company, stock exchange, mining, energy, real estate, tax and arbitration
• Buying a Turkish Company as a Foreign Investor: Which Approvals Do You Need? — Competition Board, sector approvals and notifications
• Company Formation in Turkey for Foreigners — capital, documents and formation steps
• Dividend Repatriation from Turkey for Foreign Shareholders — dividend withholding and transfer
• Paying Royalties, Licence and Service Fees Abroad from Turkey — licence and management fees in a joint venture
• Pay (Hisse) Alım Sözleşmesi Uyuşmazlıkları ve Tahkim — share purchase agreement disputes (in Turkish)
• Haklı Sebeple Şirketin Feshi Davası (TTK 531) — dissolution on just cause (in Turkish)
• Ortak Girişim (Joint Venture) ve Rekabet Denetimi — joint control and notification (in Turkish)
• Can Foreigners Build or Buy a Hotel in Turkey? — first refusal, vetoes and deadlock in a hotel joint venture
• Can Foreigners Establish a Bank or Buy Into a Bank in Turkey? — BRSA permission as a closing condition and share transfers in a bank
• Can a Foreigner Be a Board Member or Manager of a Turkish Company? — registration, remote attendance and liability of foreign directors nominated to the board
• Pay Sahipleri Sözleşmesi — Turkish version of this article