The new Turkish Commercial Code
The new Turkish Commercial Code 6102, which is expected to enter into force on July 1, 2012, is increasingly becoming the talk of the business world.
Recently, Murat Yalçýntaþ, Head of the Istanbul Chamber of Commerce, where 350,000 companies are registered, said the new code was extremely satisfactory on such matters as transparency and access to reliable information, but also he did not fail to cite some significant points of objection.
The Union of Chambers and Commodity Exchanges of Turkey (TOBB) also has some reservations.
The other day, I met the renowned consultancy firm Deloitte’s Turkey CEO Hüseyin Gürer. We met to talk about the Deloitte Education Foundation, which trains young leaders of the future, but the topic soon shifted to the new Turkish Commercial Code, which Gürer is closely monitoring.
I have to say this first: Gürer finds the new code in compliance with the European Union legal standards. He does not believe, as some circles claim, that the law will be postponed. He does, however, indicate that some things in the law might be “rubbed.”
I asked him what reforms and innovations this new law would bring to business life in Turkey, as the law is quite complicated to my eyes.
“I think one of the most important things is this: bosses will not be as free as they want in drawing cash ‘from the case,’” Gürer said.
I can have no objection to that, because I am astonished every time that classic scene appears in Turkish movies: the boss takes a huge amount of money directly from a case in the back, despite that money officially belonging to the company.
The new Turkish Commercial Code will address this, and will not allow companies to spend “from the capital.”
“It is an article that protects them all, the management, the suppliers and the customers,” Gürer told me.
Ninety-five percent of businesses in Turkey are Small and Medium Sized Enterprises (SME).
The article of the new code, even though it does not get any reaction from big bosses, naturally receives a reaction from SMEs. But everybody will have to learn to be transparent and give a fair account of their affairs.
Another important factor in the new code is the obligation for companies to have an official web site. It must be possible to access various kinds of information about companies through their web sites.
According to Gürer, the compulsory web site clause, even though it is not fully practiced in some countries in Europe, will be obligatory as of 2015.
The compulsory web site condition is an exceptionally significant step in preventing unregistered businesses (which have reached 54 percent of the total, according to Deloitte’s estimates).
However, it is quite difficult to apply.
“I think the unregistered business rate will only drop 10 percent in 10 years,” Gürer said.
Also, according to Gürer’s estimates, there will be a major fall in the number of companies in Turkey after the new code goes into effect. “I am guessing that the total number of companies – which currently stands at 816,000 - will fall to 300,000,” he said.
Meanwhile, since the auditing of companies will gain importance, Deloitte and similar companies will have new work loads.
“The number of auditing companies, small or big, will increase. Consequently, there will be new job opportunities for young people. We will start new recruitments in Deloitte in the coming months,” Gürer said.
What I deducted from what he said is this: As soon as the new Turkish Commercial Code goes into effect, the business world, together with everybody related to working life including the commercial courts, will have a steep learning curve.
No doubt, the winner will be Turkey.