Mr. A and Mr. B establish a limited company named “ABC Textile Ltd. Co.” Both are 50% partners. According to the articles of association, the authority to represent and manage the company is given to Partner Mr. B as the “manager” for 10 years.<\/p>\n
Although things go well for the first few years, Mr. A notices a serious drop in the company’s profitability over the last year. When he demands a detailed financial report and account summary from Mr. B (the manager), Mr. B constantly stalls him with the excuse of “being too busy.”<\/p>\n
Suspecting the situation, Mr. A conducts his own research and discovers that Mr. B:<\/p>\n
Paid his wife’s personal credit card debts and family holiday expenses from the company bank account,<\/p>\n<\/li>\n
Received invoices at exorbitant prices from a company owned by Mr. B’s relative for services purchased from the market,<\/p>\n<\/li>\n
Rented a luxury official car that provided no benefit to the company. When Mr. A wants to call a general assembly meeting to correct this situation, Mr. B refuses this request as well.<\/p>\n<\/li>\n<\/ol>\n
Legal Evaluation<\/b> This case is a typical example of a situation known as “deadlock,” often experienced in 50-50 partnership companies, where the manager partner abuses their authority.<\/p>\n
1. Violation of Manager’s Duty of Care and Loyalty (TCC Art. 626)<\/b> According to the Turkish Commercial Code (TCC), managers (whether partners or outsiders) must perform their duties with “the care of a prudent manager” and protect the interests of the company with “loyalty.”<\/p>\n Mr. B has clearly violated these obligations and caused damage to the company by using company money for personal expenses (disguised profit distribution) and purchasing overpriced services from relatives.<\/p>\n<\/li>\n<\/ul>\n 2. Prevention of Partner’s Right to Information and Inspection (TCC Art. 614)<\/b> Every partner has the right to obtain information about the financial status of the company and to inspect the books. Manager Mr. B’s stalling of this request is a separate unlawfulness.<\/p>\n 3. Mr. A’s Deadlock: Locked with 50% Vote<\/b> Even if Mr. A convenes the general assembly, he cannot make a decision alone to remove Mr. B from the management because he holds only 50% of the votes (since Mr. B also holds 50%).<\/p>\n Legal Result and Solution Methods<\/b> The TCC grants significant rights to the “minority” (or deadlocked) partner for such “deadlock” and “mismanagement” situations. Steps Mr. A should take through his lawyer:<\/p>\n 1. Request for Appointment of Special Auditor (TCC Art. 637):<\/b> The first thing Mr. A should do is apply to the Commercial Court of First Instance<\/b> with evidence of suspicious transactions and request the appointment of a “special auditor” to investigate “specific issues” (suspicious expenses, relative company invoices, etc.). This is critical for turning suspicions into an official report.<\/p>\n<\/li>\n 2. Lawsuit for Removal of Manager for Just Cause (TCC Art. 630):<\/b> With the special auditor’s report or existing evidence, Mr. A must apply to the Commercial Court again to request the “removal of Mr. B from management for just cause.”<\/b> If just causes (causing loss to the company, violation of duty of loyalty) are clearly proven, the court can remove Mr. B from management without the need for a general assembly decision.<\/p>\n<\/li>\n 3. Liability Lawsuit (TCC Art. 636):<\/b> Additionally, Mr. A can file a “manager’s liability” lawsuit to compensate for the damage given to the company, demanding the collection of personal expenses from Mr. B and their return to the company.<\/p>\n<\/li>\n 4. Last Resort: Termination of Company for Just Cause (TCC Art. 636\/3):<\/b> If the continuation of the partnership has become impossible, a lawsuit for the “termination of the company for just cause” can also be filed as a last resort.<\/p>\n<\/li>\n<\/ul>\n Conclusion and Advice<\/b> Trust between partners in limited companies is the foundation of commercial activity. However, when this trust is abused, especially in 50-50 deadlocks, fast and strategic legal moves are essential. As soon as you notice the actions of a bad-faith partner, applying to legal remedies such as a special auditor and removal of the manager to prove the situation and request intervention from the court is the only way to save both the company and your personal investment.<\/p>\n","protected":false},"excerpt":{"rendered":" A limited company with 50\/50 partnership where the manager partner causes loss to the company. The other partner’s rights to request “removal of manager for just cause” and “appointment of a special auditor.”<\/p>\n","protected":false},"featured_media":849,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","project-cat":[798],"class_list":["post-879","portfolio","type-portfolio","status-publish","has-post-thumbnail","hentry","project-cat-commercial-corporate-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/portfolio\/879","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/portfolio"}],"about":[{"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/types\/portfolio"}],"replies":[{"embeddable":true,"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/comments?post=879"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/media\/849"}],"wp:attachment":[{"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/media?parent=879"}],"wp:term":[{"taxonomy":"project-cat","embeddable":true,"href":"https:\/\/sura-hukuk.com\/en\/wp-json\/wp\/v2\/project-cat?post=879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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