Leaving or Excluding a Partner in a Turkish Limited Company: The Exit Right, the Court Action for Just Cause, Exclusion Clauses and the Exit Payment at Real Value (TCC 612, 616, 621, 636, 638-642)
A Turkish limited company (limited şirket) is built for a small, stable circle of partners. Shares do not move freely, the partners often know each other personally and many companies have only two or three owners. That is exactly why a broken relationship is so costly: a partner who wants out cannot simply sell to a stranger, and the others cannot simply show the door to a partner who blocks every decision or competes with the business. The Turkish Commercial Code (Türk Ticaret Kanunu, TCC No. 6102) answers with two mirror-image institutions: exit (çıkma), where a partner leaves on his own initiative, and exclusion (çıkarma), where the company removes a partner against his will. Both end in the same place, the exit payment (ayrılma akçesi) calculated on the real value of the share. This article follows the text of the Code as in force in September 2026, including the Constitutional Court decision published in the Official Gazette on 17 March 2026 that changed the rules for two-partner companies.
1. Why Exit and Exclusion Matter in a Limited Company
In a joint stock company (anonim şirket) an unhappy shareholder can usually sell. In a limited company the transfer of shares is deliberately restricted and many partners discover, only when the relationship breaks down, that there is no buyer they can bring in without the others' approval. A partner may want to leave because the majority has cut him off from information, stopped distributing profit or turned the company in a direction he never agreed to. The majority, for its part, may want to part with a partner who competes with the company, refuses to perform agreed ancillary obligations or paralyses the general assembly.
The Code gives both sides a structured answer. The exit provisions (TCC 638-639) protect the partner who wants to leave. The exclusion provision (TCC 640) protects the company against a partner whose presence has become untenable. The exit payment provisions (TCC 641-642) govern the money in both cases, and TCC 612(2) lets the company buy back the shares of a departing partner within a wider limit than usual. Around these rules sit the general assembly's inalienable powers (TCC 616), the qualified majority for important decisions (TCC 621) and, as a last resort, the partner's action for dissolution for just cause, which the court may convert into a buy-out (TCC 636(3)).
Two structural points are worth stating at the outset. First, the articles of association matter enormously: TCC 577(1)(k) and (l) make clauses granting a right of exit, fixing the type and amount of the exit payment and listing special exclusion grounds binding only if they are written into the articles. Second, the court routes exist precisely for the situations the articles did not foresee, and they cannot be waived by the majority.
2. Leaving the Company: The Contractual Exit Right and the Action for Just Cause (TCC 638-639)
Exit under the articles. Under TCC 638(1) the articles may grant the partners a right to exit and may make its exercise subject to conditions, for example a notice period, a minimum holding period or the occurrence of a defined event such as a change of control. Where the articles contain such a clause, the partner exits by declaring that he uses the contractual right; no court is needed, although a dispute about whether the conditions are met may of course end up in court.
Exit for just cause. Independently of the articles, TCC 638(2) gives every partner the right to bring an action asking the court to decide that he may leave the company for just cause. This is a mandatory safety valve: the majority cannot remove it, and the size of the claimant's stake is irrelevant. The Code does not define just cause for limited companies. A helpful yardstick appears elsewhere in the Code, in the rules on co-owned ships, which describe just cause as events that, under the rule of good faith, make it unreasonable to expect a co-owner to remain in the venture (TCC 1083(2)). The court decides each case on its own facts.
Protection while the case is pending. A just-cause action can take time, and a partner who has asked to leave is in an uncomfortable position if he must keep carrying the full burden of membership. TCC 638(2) therefore allows the court, at the claimant's request, to freeze some or all of the claimant's rights and obligations arising from the partnership for the duration of the case, or to order other measures designed to secure the claimant's position.
Joining another partner's exit. Exit has consequences for those who stay, because the company will have to pay the leaver. To keep the process fair, TCC 639 provides that when a partner declares a contractual exit or brings a just-cause exit action, the managers must inform the other partners without delay (TCC 639(1)). Each of the other partners then has one month from the date the news reaches him either to notify the managers that he joins the exit, where the contractual ground also applies to him, or to join the just-cause exit action by bringing his own action (TCC 639(2)). All partners who leave are treated equally, in proportion to their shares (TCC 639(3)). This joining mechanism does not apply where a partner is being excluded under the articles or for just cause (TCC 639(4)).
3. Excluding a Partner Under the Articles of Association (TCC 640(1)-(2), 621)
The clause. TCC 640(1) allows the articles to specify grounds on which a partner may be excluded from the company by a general assembly resolution. Typical examples in practice are a partner's failure to pay an agreed contribution, breach of an ancillary obligation, or joining a competitor, but the point is that the grounds must be set out in the articles; TCC 577(1)(l) confirms that clauses stating special exclusion grounds are binding only if the articles provide for them.
Adding a clause later. Partners who did not think about exclusion when they founded the company cannot simply out-vote a partner to introduce a clause aimed at him. Under TCC 621(3), added in 2013, an amendment of the articles that introduces exclusion grounds after incorporation requires a unanimous resolution of all partners representing the entire capital at the general assembly meeting.
The resolution. Excluding a partner for a ground stated in the articles is one of the important decisions listed in TCC 621(1)(h). It requires, cumulatively, at least two thirds of the votes represented at the meeting and an absolute majority of the entire capital carrying voting rights. Where the articles provide for it, the decision is an inalienable power of the general assembly (TCC 616(2)(f)); it cannot be delegated to the managers.
The excluded partner's remedy. The excluded partner is not left without protection. Under TCC 640(2) he may bring an annulment action within three months from the date the exclusion resolution is notified to him through a notary. The practical lesson for the company is to serve the resolution by notary so that the three-month period starts to run; the practical lesson for the partner is to calendar that date immediately and to assess whether the ground relied on is really covered by the clause and whether the majority requirements were met.
4. Exclusion by the Court for Just Cause and the 2026 Change for Two-Partner Companies
The court route. Where the articles contain no exclusion clause, or the facts are not covered by it, TCC 640(3) preserves the possibility of excluding a partner by court decision for just cause, at the company's request. The claimant is the company, not an individual partner. Deciding to apply to the court is an inalienable power of the general assembly (TCC 616(1)(h)) and one of the important decisions that need two thirds of the votes represented plus an absolute majority of the entire voting capital (TCC 621(1)(h)).
The problem in two-partner companies. Many Turkish limited companies have exactly two partners, often with equal stakes. Under the original text, a partner who did not hold an absolute majority of the capital could never obtain the general assembly resolution required to take the other partner to court: the qualified majority was arithmetically out of reach. The route existed on paper and was closed in reality.
The Constitutional Court decision. In a decision published in the Official Gazette on 17 March 2026, the Constitutional Court annulled TCC 616(1)(h), and the words in TCC 621(1)(h) referring to an application to court to exclude a partner for just cause, as regards two-partner limited companies. The Court found that leaving two-partner companies outside the exclusion mechanism was incompatible with the freedom of enterprise and the right to an effective remedy (Constitution Articles 48 and 40). The decision did not postpone the effect of the annulment, so it has applied since publication. The provisions remain in force for companies with three or more partners.
What this means in practice. In a two-partner company, the statutory requirement of a general assembly resolution before the company applies to court for exclusion no longer applies. The annulment removes an obstacle; it does not change what must be proved. The applicant side still has to show just cause, and the excluded partner is still entitled to the exit payment at real value. How the proceedings are framed in a given company, and who represents the company in them, should be analysed carefully against the articles and the company's management structure before any step is taken.
Dissolution as the fallback. TCC 636(3) allows every partner to ask the court to dissolve the company for just cause. Instead of dissolution, the court may order that the claimant be paid the real value of his share and leave the company, or adopt another appropriate and acceptable solution; TCC 636(4) allows the court to take necessary measures while the case is pending. A dissolution action is therefore often filed together with, or as an alternative to, an exit action.
5. The Exit Payment: Real Value, Due Date and Ranking (TCC 641-642, 612)
The entitlement. Whenever a partner leaves the company, whether by exit or by exclusion, he may claim an exit payment corresponding to the real value (gerçek değer) of his share (TCC 641(1)). Real value is not the nominal value printed in the articles and not simply the book value in the last balance sheet; it is the value of the share in the company as a going concern, which in a dispute is normally established by expert valuation. Where the exit takes place under a contractual exit right, the articles may regulate the exit payment differently (TCC 641(2)); TCC 577(1)(k) confirms that clauses fixing the type and amount of the exit payment bind only if written into the articles.
When the payment falls due. TCC 642(1) links the due date to the protection of the company's capital. The exit payment becomes due upon departure if (a) the company has usable equity at its disposal, (b) the leaving partner's shares can be transferred, or (c) the capital has been reduced in accordance with the relevant provisions. The former second paragraph of TCC 642 was repealed in 2012.
If the company cannot pay. Under TCC 642(3), any part of the exit payment that remains unpaid becomes a claim against the company that ranks after all other creditors. It becomes due when the annual report establishes the amount of usable equity. For a departing partner this is the central commercial risk: winning the exit case does not by itself put money in his account if the company has no free equity.
The company buying back the shares. A limited company may normally acquire its own shares only if it has freely usable equity for the price and the nominal value of the shares acquired does not exceed ten percent of the capital (TCC 612(1)). Where the acquisition results from an exit or exclusion provided for in the articles or ordered by the court, the ceiling is twenty percent (TCC 612(2)). Shares acquired above ten percent must be sold or cancelled through a capital reduction within two years, and the company must set aside a reserve equal to the price paid (TCC 612(2)-(3)). While the company holds its own shares, the voting and related rights attached to them are suspended (TCC 612(4)).
6. Comparison of the Routes
The table compares the routes available when a limited company partnership breaks down.
| Route | Who starts it | What is needed | Legal basis | Main protection for the other side |
|---|---|---|---|---|
| Contractual exit | The leaving partner | An exit clause in the articles and its conditions | TCC 638(1), 577(1)(k) | Others may join within one month (TCC 639) |
| Exit for just cause | Any partner, by court action | Just cause proved in court | TCC 638(2) | Court decides; interim freezing or securing measures |
| Exclusion under the articles | General assembly | Ground in the articles; two thirds of votes represented plus absolute majority of voting capital | TCC 640(1), 621(1)(h), 616(2)(f) | Annulment action within three months of notarial notice (TCC 640(2)) |
| Exclusion by court for just cause | The company | Just cause; general assembly resolution with qualified majority, except in two-partner companies since 17 March 2026 | TCC 640(3), 616(1)(h), 621(1)(h) | Court assessment; exit payment at real value |
| Dissolution for just cause | Any partner, by court action | Just cause | TCC 636(3)-(4) | Court may order buy-out or another solution instead |
In every row the money question is governed by the same rules: real value (TCC 641) and the capital-protection conditions for payment (TCC 642).
7. Practical Steps for Partners and for the Company
Read the articles first. Before any letter is sent, check whether the articles contain an exit right, conditions attached to it, exclusion grounds, a formula for the exit payment, transfer restrictions and pre-emption rights. These clauses decide whether a quick contractual route exists or whether the matter must go to court.
Build the just-cause file. Whether the case is exit or exclusion, the court will ask what happened and why continued co-operation cannot reasonably be expected. Minutes of general assembly meetings, correspondence with the managers, information requests and the answers to them, evidence of competing activity and financial statements over several years are the core of such a file.
Use the time limits. The one-month period for other partners to join an exit (TCC 639(2)) and the three-month period for an excluded partner to seek annulment (TCC 640(2)) are short. Notarial notification of an exclusion resolution fixes the start of the three-month period, so both sides should keep the notarial documents.
Think about the money early. A partner who leaves is paid at real value, but only if the company can pay without impairing its capital (TCC 642). Negotiated solutions, such as a share transfer to the remaining partners at an agreed price, are often worth exploring alongside litigation. Interim measures under the Code of Civil Procedure (HMK 389-391) and the specific measures in TCC 636(4) and 638(2) can protect a party while the dispute is resolved.
Two-partner companies. After the 2026 Constitutional Court decision, the balance of power in a deadlocked fifty-fifty company has changed. A partner considering either exit or exclusion should have the options reassessed against the current text, not against advice given before March 2026.
Frequently asked questions
Can I leave a Turkish limited company if the articles say nothing about exit?
Yes, if you have just cause. TCC 638(2) gives every partner the right to sue for a court decision allowing him to leave for just cause, regardless of the size of his stake and regardless of the articles. A contractual exit without having to prove just cause is available only if the articles grant it (TCC 638(1)).
What happens to my rights and duties while my exit case is pending?
At your request the court may freeze some or all of your rights and obligations arising from the partnership for the duration of the case, or order other measures to secure your position (TCC 638(2)). Whether and how far this is done depends on the court's assessment of the facts.
My business partner wants to leave. Can I leave on the same terms?
The managers must inform the other partners without delay when a partner exits under the articles or sues for exit on just cause. Within one month of receiving the news, each other partner may notify the managers that he joins the contractual exit if the ground applies to him too, or join the just-cause exit by bringing his own action. All leaving partners are treated equally in proportion to their shares (TCC 639).
Can the majority expel me from the company?
Only in two ways. Either the articles list exclusion grounds and the general assembly resolves with at least two thirds of the votes represented and an absolute majority of the entire voting capital (TCC 640(1), 621(1)(h)), or the company asks the court to exclude you for just cause (TCC 640(3)). Exclusion grounds cannot be added to the articles later without the unanimous vote of all partners representing the entire capital (TCC 621(3)).
How long do I have to challenge an exclusion resolution?
Three months from the date the resolution is notified to you through a notary (TCC 640(2)). Keep the notarial notification and have the resolution and the underlying clause reviewed promptly.
We are two partners with fifty percent each. Can one of us exclude the other?
Under the original text the company could not apply to court without a general assembly resolution requiring a qualified majority, which one partner in a two-partner company without a capital majority could never reach. In a decision published on 17 March 2026, the Constitutional Court annulled that requirement as regards two-partner limited companies, with no postponement. Just cause must still be proved in court and the excluded partner still receives the exit payment at real value.
How much will I be paid when I leave, and when?
You are entitled to an exit payment corresponding to the real value of your share (TCC 641(1)), unless a contractual exit right in the articles regulates the payment differently (TCC 641(2)). It falls due on departure only if the company has usable equity, your shares can be transferred or the capital has been reduced (TCC 642(1)); any unpaid part ranks after all other creditors and becomes due when the annual report establishes usable equity (TCC 642(3)).
