State of insolvency and its consequences in joint stock companies

The principle of maintenance of capital is one of the fundamental tenets of corporate law. To ensure this principle for joint-stock companies, some regulations have been made in the law on the protection of assets due to the impact it has on the company, its creditors, and shareholders. It is natural for a joint-stock company to deteriorate due to several reasons. One of these financial deteriorations is insolvency. Insolvency can be defined as the inability of the company's assets to meet its debts, it has been regulated separately in the law, as it adversely affected both the company, the company's creditors, the company's shareholders, and the public, and brought some obligations and consequences with it. According to the article 376 subsection 3 of the Turkish Commercial Code, if there are some indications that the company is in debt, the board of directors should issue an interim balance sheet, and if it is understood from the interim balance sheet that the assets of the company are not sufficient to meet its debts, this situation is should be reported to the commercial court of the first instance where the company headquarters is located and the bankruptcy of the company should be requested from the court by the board of directors. The result attributed to insolvency is bankruptcy, which is the reason for the termination of the company. If the court determines that the company is indeed in insolvency, in the examination to be made by the court upon the insolvency notice, it decides the bankruptcy of the company. However, it can be said that with some methods, it is possible for the company to be saved from the bankruptcy decision due to its insolvency situation. This study consists of three parts, the first part of this study is about the deterioration in the financial position of joint-stock companies, the second part is about the actions to be taken in the case of insolvency and the responsibility arising from the insolvency, the last part consists of bankruptcy as a result of insolvency and the methods that can be applied to prevent the bankruptcy decision.