Cash capitalization debt in joint stock companies and limited companies and sanctions for breach of debt

In joint stock companies and limited companies, the most important debt of the shareholder is to pay the capital they have committed in the articles of association and capital increase. Cash and in kind assets can be brought to joint stock and limited companies as capital. Only "money" falls within the scope of cash capital. All economic values other than money are considered within the scope of capital in kind. According to TCC Art. 344/1 the shareholders of joint stock companies are required to pay at least twenty-five percent of the nominal value of the shares they commit in cash before the registration of the company. The remaining amount must be paid within twenty four months. As a result of the amendment made to the 585th article of the TCC with Law No. 7099, the obligation to pay twenty-five percent of the capital committed in cash before registration has been abolished in limited companies. Due to this amendment, it may be possible that limited companies remain without capital for twenty four months following the establishment. There are various sanctions that can be imposed on the shareholder in case of acting against the debt of putting capital in cash in joint stock and limited companies. In order to apply for these sanctions, the shareholder must default to the capital debt. Sanctions that can be applied to the shareholder in default; execution proceedings and execution cases, default interest, compensation, penal clause and invalidation. Among these sanctions, invalidation is a sanction that removes the ownership o and rights from ownership and can result in dismissal from partnership. Therefore its application is subject to strict form requirements.