The Resolution of the General Assembly in Limited Liability Company Share Transfer and Its Annulment

Asst. Prof. Dr. Emine Develi Ayverdi*

Conflicts arising from the transfer of limited liability company shares are often related to the general assembly resolution. Therefore, its legal nature and annulment constitute an interesting and up-to-date subject to tackle. With the article which is outlined in this blog post, it is aimed to address to those conflicts and solutions are suggested.

General assembly resolution is first and foremost the will of the company. It is a legal bond and a provision of applicability. These specifications clear the way to establish a durable ground for any legal issues emerging from the share transfer.

During the period between the signing of the transfer contract and general assembly resolution, the share is open to transactions, namely interim legal transactions. Provision of applicability property of general assembly resolution causes the first transaction approved to be the only effective transaction if these two contradict.

Upon the notification of parties, the general assembly has three options: to approve, stay silent, or reject. Both approval and rejection resolutions may be annulled, however, the latter poses legally challenging outcomes. Most importantly, in the case of an annulment of rejection, parties are not contended, since it only helps to return to the legal status before the resolution. Determination of an affirmative resolution and specific performance in case of voting deficits might be effective tools to provide parties with solid legal protection.

Keywords: Transfer of limited liability company shares, Interim legal transactions, Legal effects of general assembly resolution, Determination of affirmative resolution, Voting right in share transfer

For the full text of this post in Turkish, please click here.

* Sakarya University Faculty of Law, Department of Commercial Law