Obligation to Have a Lawyer in Joint Stock Companies

WHAT IS THE SCOPE OF THE OBLIGATION TO EMPLOY A LAWYER?

The obligation for joint stock companies and building cooperatives to employ a lawyer is regulated in Article 35 of Attorneyship Law No. 1136.

The third paragraph of Article 35 of Attorneyship Law No. 1136 states: “Anyone with the capacity to initiate a lawsuit may prepare the documents related to their own case, file their case personally, and follow up on it. However, joint stock companies with a capital equal to or greater than five times (250,000 TL) the minimum capital stipulated in Article 272 of the Turkish Commercial Code, and building cooperatives with one hundred or more members, are obliged to employ a contracted lawyer. Any institutions acting contrary to this paragraph shall be subject to an administrative fine by the public prosecutor for each month they fail to appoint a contracted lawyer, equal to two months’ gross minimum wage applicable to workers over the age of sixteen in the industrial sector at the time of the offense.”

Accordingly, joint stock companies with capital equal to or greater than five times the minimum capital stipulated in Article 332 of the Turkish Commercial Code, and building cooperatives with one hundred or more members, are obliged to employ a contracted lawyer.

contracted legal counsel

In conclusion, according to these legal provisions:

• Joint stock companies with a capital of 250,000.00 TL or more,
• Building cooperatives with one hundred or more members,

are obliged to employ a contracted lawyer under the Attorneyship Law.

IS THERE AN OBLIGATION TO EMPLOY A LAWYER IN LIMITED COMPANIES?

The obligation to employ a lawyer applies only to those listed in Article 35. Therefore, since it is not mentioned in Article 35 of the Attorneyship Law, there is no obligation to employ a lawyer in limited companies or other types of companies. Likewise, joint stock companies with capital below 250,000.00 TL or building cooperatives with fewer than one hundred members are not subject to this obligation. However, to avoid loss of rights, it is always advisable to seek legal support from a lawyer even if it is not mandatory.

contracted company lawyer

WHAT IS THE SANCTION FOR NOT EMPLOYING A LAWYER?

The Istanbul Bar Association, in a letter sent to nearly 32,500 joint stock companies as notified by the Istanbul Trade Registry Office, stated that companies must comply with the obligation to employ a lawyer, and that for those failing to do so, applications would be made to the relevant Public Prosecutor’s Offices for legal action. To access the relevant notice click here.

According to Article 35 of the Attorneyship Law, the sanction for failing to comply with the obligation to employ a lawyer is also specified in the same article. Accordingly, institutions failing to comply with this obligation are subject to an administrative fine as per the provision: “The public prosecutor shall impose an administrative fine for each month they fail to appoint a contracted lawyer, equal to two months’ gross minimum wage applicable to workers over the age of sixteen in the industrial sector at the time of the offense.”

contracted company lawyer

For example: for companies obliged to employ a lawyer but failing to do so,

for the year 2020, the gross minimum wage was (2,943 TL) x 2 = 5,886 TL (this is the fine applied for each month worked without a lawyer)

If you fail to employ a lawyer for the entire year of 2020, despite the obligation, the fine you would have to pay would be 5,886 × 12 = 70,632 TL.