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Electronic General Assembly Meetings: An Easier Way to Participate in the Management of Startups
The Electronic General Assembly Meetings system enables shareholders of Turkish companies to, regardless of their citizenship status, hold meetings and vote agendas in English or Turkish without the need to be present in the same room or even in the same country. As it is seen more and more Turkish startup companies attracting foreign investors, the electronic GAM system enables foreign shareholders of the Turkish companies to participate GAM without any obligation to travel to Turkey.
1. Is it necessary to have a provision in the Articles of Association (“AoA”) of the company to benefit from this?
BNecessarily yes. According to the Article 1527 of the Turkish Commercial Code the companies may convene the General Assembly electronically, if its AoA includes a specific provision to allow the electronic General Assembly Meeting (e-GAM). This means the absence of the provision for e-GAM in the AoA is an obstacle to transition to the electronic General Assembly System.
2. How do you make a transition from traditional GAM to electronic ones?
This is possible for shareholders by obtaining electronic signatures (https://www.btk.gov.tr/elektronik-sertifika-hizmet-saglayicilari) from authorized service providers listed on Information and Communication Technologies Authority's (Bilgi ve İletişim Teknolojileri Kurumu – “BTK” ) website. Even though it is not mandatory to outsource e-GAM infrastructure services as every company is allowed to set up its infrastructure provided that it complies with the required standards to protect sensitive trade information, most companies do not bother with setting up their system. At the time, the only company providing an outsourcing service for setting up the required electronic infrastructure for e-GAM is the Central Securities Depository (Merkezi Kayıt Kuruluşu – “MKK”). MKK is the service provider and sells electronic General Assembly System (e-GAS) products to customer companies.
3. How to set up the infrastructure?
A company wishing to convene the GAM electronically must apply to e-GAS and provide company details, including its secretary. MKK's information system specialists handle the setting up of the entire infrastructure in the company premises except for the VPN server and electronic signature, which is the responsibility of the customer company. Once the system’s setup is completed, the secretary of the customer company will be appointed by the system in accordance with the information that are given by the customer company. This company secretary may be a shareholder or another person authorized by the Company. The role of the company secretary is to take on tasks such as setting up meetings as the system administrator and conducting the meeting in terms of discussion and votes of agendas.
4. How will the GAM be conducted electronically?
The company secretary will schedule the GAM on the system. Once the GAM is scheduled, shareholders will have two days prior to the GAM to choose whether to participate electronically or physically via e-GAS. In accordance with the shareholders' choice of participation method, list of the attendant will be automatically generated by the system and will include the e-signature of the shareholder participating electronically. The company secretary will start the meeting session and the system will provide a live stream from the meeting room which allow every shareholder to hear and watch the physical meeting room. After the beginning of the session, every agenda of the meeting may be discussed between the shareholder.
Every shareholder who are participate the GAM electronically will be able to vote the agendas. After the electronical votes the secretary may register the votes of the shareholders who participate physically to the system. Once all votes have been recorded in the system, the system presents a table of votes showing the accepted or rejected agendas.
5. How will foreign shareholders who are residents abroad obtain the e-signature?
E-signature service providers handle the required procedures for foreign resident shareholders to obtain their e-signature tokens. The shareholders abroad fills out the form that he/she must fill out and sends the passport number and potential tax number to the e-signature provider firm.