Removing or Restricting the Manager of a Turkish Limited Company: The General Assembly's Power, the Partner's Court Action for Just Cause, Registration and the Removed Manager's Rights (TCC 616, 620, 623-630)
In a Turkish limited company (limited şirket) the manager (müdür) signs the contracts, runs the bank accounts, hires and dismisses staff and prepares the financial statements. When the partners lose confidence in the manager, because he competes with the company, keeps the others in the dark, stops preparing the accounts or simply can no longer run the business, the question is not whether he can be removed but how, by whom and with what consequences. The Turkish Commercial Code (Türk Ticaret Kanunu, TCC No. 6102) gives two routes: a general assembly resolution, which needs no reason, and a court action by any partner for just cause, which exists precisely for the partner who cannot command a majority. This article explains both routes, the intermediate option of restricting rather than removing, how the change reaches the trade registry and third parties, and what the removed manager may still claim, following the text of the Code as in force in September 2026.
1. Who Manages a Turkish Limited Company and Why Removal Matters
Under TCC 623(1) the management and representation of a limited company are regulated by the articles of association. The articles may give them to one or more partners who carry the title of manager, to all partners, or to third persons, but at least one partner must have the right to manage and to represent the company. If a legal entity is appointed manager, it designates a natural person who performs the function on its behalf (TCC 623(2)). Managers are competent in every management matter that the law or the articles have not reserved to the general assembly (TCC 623(3), 625(1)).
The managers' powers are wide and, in part, cannot be delegated or waived. TCC 625(1) lists them: the high-level management of the company and the giving of instructions; determining the management organisation; establishing accounting, financial control and financial planning where needed; supervising those to whom parts of the management have been delegated; setting up the early risk detection committee, except in small limited companies; preparing the financial statements and the annual report; preparing general assembly meetings and executing their resolutions; and notifying the court if the company is over-indebted. Where there are several managers, the general assembly appoints one of them as chair, decisions are taken by majority and the chair's vote prevails in a tie unless the articles provide otherwise (TCC 624).
This concentration of power explains why the removal question is urgent in practice. A manager who has fallen out with the other partners still holds the signing authority registered in the trade registry, still has the bank tokens and still controls the books. In a company with foreign partners, the manager is often the only person on the ground in Türkiye, which makes the imbalance sharper. The Code's answer is not to leave the partners at the manager's mercy but to give them a quick internal route and, when that route is blocked, a judicial one.
2. Removal by the General Assembly: An Inalienable Power Exercised by Simple Majority
TCC 616(1)(b) lists the appointment and removal of managers among the inalienable powers of the general assembly. Inalienable means that the articles cannot transfer the power to the managers, to a committee or to one partner; any clause attempting to do so is ineffective. TCC 630(1) confirms the power in direct terms: the general assembly may remove the manager or managers and may restrict the right to manage and the power to represent.
The Code does not require the general assembly to give reasons. Removal is the counterpart of appointment: the partners who entrusted the company to the manager may take it back. The resolution is taken, unless the law or the articles provide otherwise, by the simple majority of the votes represented at the meeting, election resolutions included (TCC 620(1)). The removal of a manager is not among the important resolutions for which TCC 621 requires a qualified majority, so the default is simple majority. The articles may, however, set a higher threshold, and many do, particularly in joint ventures where each side wants to protect the manager it has nominated. Reading the articles is therefore the first step: a clause that requires unanimity or a specific quorum for the removal of managers binds the partners and changes the arithmetic of the meeting.
The meeting must be validly convened and held. The manager who is to be removed is often the person who would normally convene the meeting and prepare the agenda (TCC 625(1)(g)), and that conflict of interest is one of the most common practical obstacles. Partners who cannot get a meeting convened should take legal advice early on the convening route available to them under the articles and the Code; a removal resolution adopted at a meeting that was not properly convened is exposed to an annulment action, which applies to limited companies by analogy with the joint-stock company rules.
Once adopted, the removal takes effect within the company at once. Its effect on third parties depends on registration, which is discussed in section 5.
3. Restricting Instead of Removing: Joint Signature, Limited Mandates and Internal Approval
Removal is not the only tool. TCC 630(1) allows the general assembly to restrict the manager's right to manage and power to represent while leaving him in office. This is often the better choice where the manager's know-how is still needed, where removing him would unsettle employees or customers, or where the partners want to test a new arrangement before a final decision.
Typical restrictions are: requiring the manager to sign jointly with another manager or with a named partner; limiting his authority to the business of the head office or of a particular branch; setting monetary thresholds above which he may not bind the company alone; and requiring prior general assembly approval for defined categories of transaction. The last option has a specific basis: under TCC 625(2) the articles may require the managers to submit certain decisions or individual issues to the general assembly for approval, although approval does not remove or limit the managers' liability.
The legal effect of a restriction differs inside and outside the company. Inside, the manager who ignores it breaches his duties and is liable. Outside, the rule of TCC 371(3), which TCC 629(1) applies to limited companies by analogy, is decisive: a restriction of representation does not bind third parties acting in good faith, except restrictions confining authority to the business of the head office or a branch and restrictions requiring joint exercise, provided those have been registered and announced. A monetary cap or an internal approval requirement therefore protects the partners mainly through the manager's liability, whereas a registered joint-signature rule protects them against the counterparty as well. That is why, in a dispute, the restriction partners usually choose is joint signature, registered without delay.
4. When the Majority Will Not Act: The Partner's Court Action for Just Cause (TCC 630(2)-(3))
The general assembly route fails exactly where protection is most needed: when the manager is himself the majority partner, when he is backed by the majority, or when a 50/50 company cannot reach a majority at all. For those cases TCC 630(2) provides that every partner, whatever the size of his stake, may ask the court to remove or restrict the management right and the representation power of the managers if there is just cause. The action is brought before the commercial court of first instance (asliye ticaret mahkemesi) of the company's seat. Because its subject-matter is not a sum of money, the pre-action mediation that TCC 5/A requires for commercial money claims does not apply to it.
TCC 630(3) defines just cause by two examples that carry most cases. The first is a serious breach of the duty of care and loyalty or of other obligations arising from the law or the articles. The duty itself is set out in TCC 626: managers must perform their duties with all due care and protect the company's interests in good faith; unless the articles or the written consent of all other partners allow it, they may not engage in activities that compete with the company; and they are bound by the partners' duty of loyalty. The second example is the manager's loss of the ability required for good management.
In practice, the facts brought under these headings include: running a competing business or diverting customers to one; transactions between the company and the manager's relatives on terms no independent party would accept; failure to prepare the financial statements and the annual report or to convene the ordinary general assembly (TCC 625(1)(f), (g)); failure to notify the court of over-indebtedness (TCC 625(1)(h)); systematically denying information to the other partners; and long-term absence or incapacity that leaves the company unmanaged. The court does not second-guess ordinary business judgment; the question is whether the breach is serious enough that the partners cannot reasonably be expected to leave the company in the manager's hands.
Because a court action takes time, the claimant usually asks at the same time for an interim measure under Article 389 of the Code of Civil Procedure (HMK), which allows the court to act where a change in the current situation would make obtaining the right considerably harder or impossible, or where delay would cause a drawback or serious harm. Typical requests are a temporary joint-signature requirement or the appointment of a co-signatory for bank transactions pending judgment. The evidence file should be ready at filing: the articles, trade registry records, bank statements, correspondence showing requests for information that went unanswered, and documentary proof of any competing activity.
5. Registration, Signature Circulars and the Position of Third Parties
TCC 629(1) applies the joint-stock company provisions on the scope of representation, its restriction, the designation of authorised signatories, the form of signature and their registration and announcement to limited companies by analogy. The removal of a manager, the appointment of a replacement and any restriction of signing authority are therefore registered with the trade registry of the company's seat and announced in the Trade Registry Gazette. Until that happens, counterparties who rely in good faith on the registered position may continue to deal with the removed manager.
A practical sequence after the resolution or the judgment looks like this:
- Obtain the certified resolution or the court decision and file the registration application with the trade registry without delay.
- Have the new manager's signature declaration (imza beyannamesi) prepared and submitted, and have the removed manager's signature removed from the bank mandates.
- Notify the company's banks, main customers and suppliers in writing, enclosing the registry record once issued.
- Recover the physical and digital means of management: seals, bank tokens, e-signature and electronic filing credentials, access to the accounting software and the company's books.
- Check that at least one partner still holds management and representation powers, as TCC 623(1) requires, and register a new appointment if necessary.
Foreign partners should remember that registration documents executed abroad, such as powers of attorney and signature declarations, generally need notarisation and an apostille and a sworn translation into Turkish before the registry accepts them. Planning this in advance avoids a gap of several weeks during which the removed manager remains the only registered signatory.
6. The Removed Manager's Rights and the Parallel Contract
TCC 630(4) states that the compensation rights of the removed manager are reserved. The provision reflects a distinction that matters in every removal: the manager holds an office in the company, which the general assembly may end at any time, and may in addition have a contract with the company, such as a service contract or an employment contract, which is governed by its own rules. Ending the office does not automatically end the contract, and ending the contract without a valid reason or without notice may create claims for fees, notice pay or damages under the Turkish Code of Obligations or the Labour Act, depending on the nature of the relationship.
For the company, the practical consequences are two. First, the removal resolution should be accompanied by a decision on the contract, taken after checking its term, notice and termination clauses. Second, where there is just cause, the documentary record that supports the removal also supports the defence against a compensation claim; a removal that is made for strategic reasons but dressed as just cause invites litigation on both fronts.
Removal also does not, by itself, release the manager from liability for past conduct. A manager who caused loss to the company by breaching the duties described in TCC 625 and 626 remains exposed to a liability claim after he leaves office; a release (ibra) is a separate general assembly decision under TCC 616(1)(f), and partners who are removing a manager for cause should not grant it in the same breath. Partners sometimes use the removal and the liability action together: the first stops further harm, the second seeks recovery of the harm already done.
7. Choosing the Route: A Comparison and the Alternative of Dissolution
The table summarises the routes available to partners who have lost confidence in a manager.
| Route | Who acts | Condition | Legal basis | Main limit |
|---|---|---|---|---|
| Removal by general assembly | General assembly | No reason required; simple majority of votes represented unless the articles say otherwise | TCC 616(1)(b), 620(1), 630(1) | Needs a majority and a validly convened meeting |
| Restriction by general assembly | General assembly | No reason required | TCC 630(1), 625(2) | Binds good-faith third parties only if it is a registered joint-signature or head-office/branch restriction (TCC 371(3)) |
| Court removal or restriction | Any partner | Just cause: serious breach of duties or loss of ability to manage | TCC 630(2)-(3) | Takes time; interim measure under HMK 389 needed for urgent cases |
| Dissolution for just cause | Any partner | Just cause for ending the company | TCC 636(3) | Court may order the claimant's exit at the real value of his shares or another suitable solution instead |
The last row is the most drastic option and is relevant where the conflict is no longer about one manager but about the partnership itself. Under TCC 636(3) every partner may, for just cause, ask the court to dissolve the company; the court may instead order that the claimant be paid the real value of his shares and leave the company, or adopt another appropriate and acceptable solution. In a deadlocked company the court action under TCC 630 often comes first, and dissolution for just cause remains the fallback if the conflict proves irreparable.
Whichever route is chosen, the articles of association are the first document to read, the trade registry file the second, and the company's bank mandates the third. Most of the damage in manager disputes is done in the weeks between the loss of confidence and the registration of the new signing arrangement, and that period is the one to shorten.
Frequently asked questions
Can the partners remove a limited company manager without giving any reason?
Yes. The appointment and removal of managers is an inalienable power of the general assembly (TCC 616(1)(b)), and TCC 630(1) allows the general assembly to remove the managers without requiring a reason. Unless the law or the articles provide otherwise, a simple majority of the votes represented at the meeting is enough (TCC 620(1)). The removed manager's compensation rights are reserved (TCC 630(4)).
I hold 30 percent and the manager is backed by the majority. What can I do?
You may bring a court action under TCC 630(2). Every partner, regardless of the size of the stake, may ask the court to remove or restrict the manager's management and representation powers if there is just cause. A serious breach of the duty of care and loyalty or the loss of the ability needed for good management counts as just cause (TCC 630(3)). An interim measure under HMK 389 may be requested with the claim.
Is mediation required before the court action against the manager?
The mandatory pre-action mediation in TCC 5/A applies to commercial claims for a sum of money, compensation, annulment of objection, negative declaration and restitution. An action to remove or restrict a manager's powers under TCC 630(2) does not have a sum of money as its subject-matter, so that requirement does not apply to it. A separate damages claim against the manager may be different and should be assessed on its own.
Does a joint-signature restriction protect the company against third parties?
Only if it is registered and announced. Under TCC 371(3), applied to limited companies by TCC 629(1), a restriction of representation does not bind third parties acting in good faith, except restrictions to the business of the head office or a branch and joint-signature requirements that have been registered and announced. Other internal limits bind the manager but not the good-faith counterparty.
Can a company be left without a manager after the removal?
No. TCC 623(1) requires that at least one partner must have the right to manage and to represent the company. If the removal leaves no such partner, the general assembly must appoint a new manager at the same time, and the appointment must be registered.
Does removal end the manager's employment or service contract?
Not automatically. Removal ends the office; a contract running alongside it is governed by its own terms and by the Code of Obligations or the Labour Act, as the case may be. That is why TCC 630(4) reserves the removed manager's compensation rights. The contract should be reviewed and dealt with at the same time as the removal.
Is the manager still liable after removal for what he did in office?
Yes. Removal stops further conduct but does not release the manager from liability for loss caused by breaches of his duties while in office. A liability claim for loss caused by breaches of TCC 625 and 626 may be pursued after the removal. Note that the release of managers (ibra) is a separate general assembly decision under TCC 616(1)(f); granting it can weaken a later claim.
