Capital loss or merger in the case of a joint-stock company's being in default

The Turkish Commercial Code numbered 6102 gives particular importance to the protection of capital in joint-stock companies. According to article 139, a joint-stock company in liquididation or technical bankruptcy may be involved in an acquisition. Thus, the joint-stock company may recovered financially by a company in good financial standing. A company which has lost half of the sum of its capital and statutory reserves due to damages, or whose liabilities exceed its assets, may merge with a company, provided that the latter is in possession of freely disposable equity sufficient to cover the capital loss or, if necessary, to remedy the state of excess of liabilities over assets. According to Turkish Commercial Code, article 376; If suspicions are raised that company's liabilities exceed its assets, the board of directors shall have an interim balance sheet prepared based on the going concern value and based on liquidation of the assets. If, pursuant to such reports, it is seen that the assets are not sufficient enough to cover the debts, then the board of directors shall notify this situation to the Commercial Court of First Instance located where the headquarters of the company is situated and request declaration of the bankruptcy of the company. First of all, merger, dominant principles of mergers and other legal arrangements (Code of Obligations, Law on the Protection of Competition, Insurance Law etc.) are explained in my thesis. In the second section, terms of mergers, procedure and results of acquisition are explained. In final chapter, merger in case of dissolution of a company, merger of commercial enterprise by the company, capital loss or merger in the case of a company's being in default and are mentioned by individually. Key Words: Joint-stock Company/ Capital loss/ Excess of assets over liabilities/ Merger/ Turkish Commercial Code