Privilege in voting in join stock companies

Provisions regarding privileged shares have been modified by the Turkish Commercial Code numbered 6102, matters that weren't regulated in the previous code of commerce were now included in the code, issues that have been accepted de facto by the doctrine and the case law became de jure and found a place in the current code. During its chronological development, privileged shares were sometimes given preference and the balances were built upon them, while sometimes some countries have abandoned the concept altogether. Thus, it has been a subject of investigation regarding both domestic legal systems and comparative law. As a matter of rule, privilege is accorded to the share. An exception to this is the accordance of privilege to the representation of certain groups in the board of directors. Privilege has to be foreseen by the articles of association. Otherwise, privilege can be accorded by the modification of the articles of assocation. It is possible to create a privilege in many matters, but most commonly, privilege is accorded in voting, dividend or distribution of the balance of the company in liquidation. While the right of voting is not defined by the law, the voting rights increased by the privileged shares allows to influence the management of the company, while those who only have material expectations from the company and not want to participate in the management of the company are called shareholders without vote. Shares with voting privileges are regulated under a different title, separate from other shares, in art. 479 of Turkish Commercial Code. Unlike the previous code, the procedures of according privileges have been modified and a numerical limit has been established over the voting privileges. While it was possible to accord an equal vote to shares with different nominal values before, the current laws do not allow this anymore. It is permitted only to accord a different amount of votes to shares with equal nominal values. Privilege can also be now accorded at the establishment of the company or afterwards. Concurrently, a relative, and not absolute, equality exists among the shareholders. As the owners of shares with voting privileges are not equal to other shareholders, they will not be subject to the principle of equal treatment. Equality is only valid among equals. Everyone benefits from the rights of shareholding in the company in proportion to the capital they put during the establishment of the company. The general assembly of privileged shareholders that was foreseen in the old code to protect the voting privileges is now renamed to the special board of privileged shareholders. This board convenes in cases where the rights of the privileged shareholders are harmed and a decision is reached in line with the case at hand. According to this decision, the board of directors will file a suit to ascertain that a violation has not been committed and according to the ruling of the court, the operations of the company will resume. The concept of corporate governance gained importance in the 90s and it has entered our legal system only very recently. This governance is a model of company management built on principles of equity, transparence, accountability and responsibility. The connection between the shares with voting privileges and corporate governance is deemed possible yet the legal deficiencies concerning institutionalization have not been corrected.