Restitution of dividends and shares of profits in joint stock companies

The subject of our study is the restitution of the dividends received by shareholders and shares of profits received by the board members in joint stock companies. The provisions of law, which are fundamental to this subject, are (i) Article 512 of Turkish Commercial Code ("TCC"), providing that the shareholders who have unduly and in bad faith received dividends or intercalary interests shall return such benefits and that the same provision shall apply to the shares of profits received by the board members, and (ii) Article 513 of TCC, applicable in case of company's insolvency, which provides that the board members shall return all shares of profits and other earnings which exceed the appropriate amount of remuneration and violates the prudent accounting principles. In our study, we have explained, in a comparative approach with Swiss Law, the concept of dividend and share of profit, conditions in order to assert a claim for restitution, the scope of claim for restitution, the persons who may claim the restitution and who are obliged to return, the procedure to claim the restitution and the responsibility of the board members and independent auditors in such cases.