COVID-19: Dividend Distribution Limitation Extended For Three Additional Months – Coronavirus (COVID-19)

Recent Development

The dividend distribution limitation period was extended for an
additional three months pursuant to the Presidential Decision No.
2948 (“Presidential Decision“) published
in the Official Gazette No. 31248 on September 18, 2020.

Within the scope of governmental measures taken due to COVID-19,
dividend distributions were limited and Provisional Article 13 was
added to the Turkish Commercial Code
(“TCC“). The Communiqué on the
Procedures and Principles for the Application of Provisional
Article 13 of the Turkish Commercial Code
(“Communiqué“) was published in
the Official Gazette dated May 17, 2020 and No. 31130.

What Does the Presidential Decision Say?

The dividend distribution limitation was set to end on September
30, 2020, but was extended for an additional three months, until
December 31, 2020. The Presidential Decision granted this extension
based on the authorization provided by Provisional Article 13 of
TCC.

Conclusion

Companies wishing to distribute dividends within the scope of
the listed exceptions until the end of 2020 must take into
consideration the provisions of the TCC and Communiqué
regarding the principles on the limitation of dividend
distributions and their exceptions.

For further information on the limitation of dividend
distributions, refer to our previous Legal Alerts COVID-19: Limitations on Dividend
Distributions and COVID-19: Procedures, Principles and Exceptions Defined for
Limitation on Dividend Distribution

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.