1163 KOOPERATİFLER KANUNU İNGİLİZCE
REPUBLIC OF TURKEY MINISTRY OF INDUSTRY AND TRADE General Directorate Of Organization LAWS ON COOPERATIVES January 1996, ANKARA COOPERATIVES LAW 1163 COOPERATIVES LAW Law No. : 1163 Date of Approval : 24.4.1969 Official Gazette of Publishing : Date: 10/5/1969, No: 13195 PART ONE Cooperative And Establishment Thereof A) DESCRIPTION: Article-1: Cooperatives are bodies with variable members, variable capital, and legal identity that are established by natural and public legal entities and private administrations, municipalities, villages, societies and associations in order to ensure and maintain certain economic interests and especially the needs of their members toward professional life and living standards by means of mutual assistance, solidarity and service as trustees to each other. B) ESTABLISHMENT, TERMS OF VALIDITY, AUTHORIZATION FOR USING NAME Article-2: A cooperative is established through an Rules to be signed between 7 members. The signatories in the Rules should be notary-attested. The undertakings in the Rules of the other cooperatives the scope of which include the transfer of immovable properties, pertaining to the fact that immovable properties will be transferred to members are deemed as valid irrespective of other official procedure. While establishing cooperatives, the capital of the cooperative cannot be confined of to a certain amount. The name ‘cooperative’ can solely be used by the bodies that have been established in accordance with this law hereby. The titles of the cooperatives and their superior institutions cannot contain the names of public bodies and institutions (Article 1 of the Law 3476 and addendum thereof). (*) C) PERMISSION, REGISTRATION, AND ANNOUNCEMENT Article-3: The Rules is submitted to the Ministry of Trade. Should the Ministry permit the establishment, it is registered with the local Trade Registry Office and announced accordingly. The particulars to be registered and announced are as follows: (*) The members of the Board of Directors of the cooperatives and their superior institutions that violate Item 4 are sentenced to penalties such as imprisonment from 1 month up to 6 months and heavy fines such as fifty thousand to five-hundred thousand Turkish Liras depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/2. 1. The date of the Rules, 2. The scope, the field of activity and the duration, if any, of the cooperative, 3. The title and the registered office of the cooperative, 4. The capital of the cooperative, and the minimum amount paid in return for the cash portion thereof and the value of the share of each membership, 5. The fact that the membership share documents are prepared in names, 6. What the capital in kind and the valuable assets taken over consist of and the values designated for these, 7. How the cooperative shall be represented and audited, 8. The names of the members of the Board of Directors and the people authorized to represent the cooperative, 9. How the announcements to be made by the cooperative shall be made and how the decisions to be made by the Board of Directors shall be notified to the shareholders, if there are any provisions about this in the Rules, 10. Branch offices of the cooperative: Cooperatives can establish branch offices within and out of the country, should they deem it as necessary. Branch offices are registered with the local registry authorities of the city they are established in with reference to the registered head office thereof. The Ministry of Trade cannot abstain from permitting the establishment of the cooperative claiming that it is in poor conformity with the optional provisions of the Law. The amendment of the Rules depends on the procedures of the organization. D) THE PROVISIONS TO BE CONTAINED BY THE ARTICLES OF ASSOCIATION I. Obligatory Provisions Article-4: The Rules of the cooperatives have to contain the provisions pertaining to the following particulars. 1. The name and the registered office of the cooperative, 2. The purpose and the field of operating of the cooperative, 3. The states and conditions that result in the gain or loss of the position of membership, 4. The value of the shares of the members and the way the cooperative capital is paid; cash payment of at least ¼ of the cash capital, 5. Whether the members shall deposit capital in kind or not, 6. The state and the degree of responsibility of the members with regard to the liabilities of the cooperative, 7. The duties, authorities, and responsibilities of the managing and controlling organs of the cooperative and the way they are elected, 8. Provisions concerning the representation of the cooperative, 9. The ways to calculate and utilize annual income / expenditure differences, 10. The names, surnames and the residence addresses of the founders. II. Optional Provisions Article-5: The Rules may also contain the following provisions: 1. The provisions concerning the meeting of the General Assembly, the way decisions are made, and the way of voting, 2. The procedures concerning the way the cooperative is operated, 3. The relations of the cooperative as to the associations, 4. The provisions concerning the merging of the cooperative with another cooperative, 5. The duration of the cooperative. III- Construing Provisions Article-6: In case there are no provisions in the Rules pertaining to the particulars written in the lines 1 and 2 of Article 5, the following provisions are applicable: 1. The General Assembly is called for meeting through letters signed by the persons authorized to represent the cooperative, or local newspapers, or through written and signed notices if in villages. 2. The activities of the cooperative: These are restricted to the purpose and the field of operation of the cooperative. E) THE ACQUISITION OF LEGAL IDENTITY AND RESPONSIBILITIES THEREOF Article-7: The cooperative acquires legal identity through registry with the Trade Registry Office. The persons acting for and on behalf of the cooperative before registry are personally and successively responsible for their actions. PART TWO Acquisition and Loss of Membership Position A) TERMS OF ENTERING MEMBERSHIP AND ADDITIONAL PAYMENTS I- Terms of entering membership and the number of members (modified by Article 2 of the Law 3476): Article-8: Natural persons need to be able to use the civil rights in order to be eligible for entering cooperative membership. Natural and legal entities that are eager to enter membership apply to the Board of Directors of the cooperative along with a written notice documenting that they fully agree with the provisions of the Rules along with all rights and duties thereto. Should the cooperative be assigning certain personal responsibilities or additional payments other than its own assets to its members, then the intention to become a member is valid solely on the condition that such liabilities are agreed to in writing. Board of Directors: is obliged to inspect whether the members and those applying for membership are eligible as per the Rules. (*) The number of housing units, offices (or work places), and members is specified by the General Assembly in construction cooperatives. The Board of Directors cannot have enrolled more members than specified by the General Assembly. (**) II- Membership of legal entities Article-9: Legal Public entities such as private administrations, municipalities, villages, societies and associations, state economic enterprises, and cooperatives may support, have a leading role in, or become members to the establishment of the cooperatives with respect to their purpose of operation. B) TERMINATION OF MEMBERSHIP I- Freedom of withdrawal from membership – indemnity thereof (*) The members of the Board of Directors of the cooperatives and their superior institutions that violate Item 2 are sentenced to penalties such as imprisonment from 1 month up to 6 months and heavy fines such as fifty thousand to five-hundred thousand Turkish Liras depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/2. (**) The members of the Board of Directors of the cooperatives and their superior institutions that violate Item 3 are sentenced to penalties such as imprisonment from 1 month up to 6 months and heavy fines such as fifty thousand to five-hundred thousand Turkish Liras depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. Article-10:Each member has the right to withdraw from membership. In case the act of withdrawal endangers the presence of the cooperative, a provision stipulating that a just indemnity be paid to the cooperative by the withdrawing member can be included in the Rules. II- Restriction of withdrawal from membership Article-11: The usage of the right to withdrawal from membership can be restricted through the Rules up to a maximum term of 5 years. A provision can be put into the Rules stipulating that any member can withdraw from membership prior to the end of this term provided that s/he has rightful and important reasons. Bindings stipulating that a member can in no way withdraw from the cooperative are invalid. III- Notification period and time of withdrawal Article-12:Members may withdraw only as of the end of the fiscal year and with a prior notification of at least 6 months. Should a shorter period be specified in the Rules, withdrawals within the fiscal year can be permitted. IV- Abstinence from accepting withdrawal from membership Article-13: Should the Board of Directors abstain from accepting the withdrawal of any given member from membership in spite of a withdrawal request made in compliance with the Rules, the member notifies his/her request of withdrawal through a notary-public. The withdrawal is realized as of the date of such notification. V- Death of the member and the transfer of membership Article-14: The position of membership is terminated upon the death of the member. As per the provisions stipulated in the Rules, the position of membership can be passed on to the heirs of the member. Membership may be transferred. If the person taking over the membership is eligible for membership, the Board of Directors accepts the membership of such person(s) (modified by Article 3 of the Law 3476). VI- Termination of duty or service; membership in return for immovable properties or enterprise Article-15: If the position of membership depends on the execution of a particular duty or service, the position of membership is terminated upon the termination of such duty or service. In such cases, the position of membership can be perpetuated through the addition of a particular provision to the Rules. The acquisition of the position of membership can be connected by the Rules to the enjoyment of certain rights in connection to the ownership of a given immovable or to the operation of a given enterprise. In such cases, the Rules can include provisions that the ownership of an immovable property or the enterprise, or the position of membership can be transferred to third persons as a right to the new owner in case of transfer of them or their rights. The validity of such immovable property acquisition against third persons is dependent on the conditional delivery made in this manner to the Title Deed Registry. C) PRINCIPLES OF DISMISSAL FROM MEMBERSHIP, AND OBJECTION THEREOF Article-16: The reasons necessitating dismissal from cooperative membership are specified clearly in the Rules. Members cannot be dismissed from cooperative membership for reasons other than those specified in the Rules (modified by Article 3 of the Law 3476). (*) Dismissal from membership is decided upon by the General Assembly upon the proposal of the Board of Directors. The Board of Directors can be authorized by the Rules with respect to the reservation of the right of the dismissed member to apply to the General Assembly. The decision about dismissal is written with cause in the written reports as well as in the members’ book. The attested copy of the decision is delivered to the notary public within ten days, for being notified to the dismissed member. The said member can open a lawsuit of objection within three months as of the date of notification. If the notified decision has been made by the Board of Directors, the member can as well forward his/her objection to the General Assembly within the three-month period. This objection is realized through a notary-notification in writing to the Board of Directors, for being submitted to the first meeting of the General Assembly. If the objection is forwarded to the General Assembly, a lawsuit of objection cannot be opened against the decision of dismissal by the Board of Directors. The right to open a lawsuit of objection against the decision to be made by the General Assembly is reserved. The decisions of dismissal against which no objections are forwarded either to the General Assemblies or to the courts within a three-month period become definite. The members, the decisions of dismissal about whom have not become definite, cannot be replaced with new ones. The membership rights and liabilities of such persons continue to be valid until the decisions of dismissal about them become definite (Article 4 of the Law 3476 and addenda). (**) (*) The members of the Board of Directors of the cooperatives and their superior institutions that violate Item 1 are sentenced to penalties such as imprisonment from 1 month up to 6 months and heavy fines such as fifty thousand to five-hundred thousand Turkish Liras depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/2. (**) The members of the Board of Directors of the cooperatives and their superior institutions that violate Item 5 are sentenced to penalties such as imprisonment from 1 month up to 6 months and heavy fines such as fifty thousand to five-hundred thousand Turkish Liras depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. D) PERIOD OF SETTLING ACCOUNTS WITH THE MEMBERS WHO HAVE WITHDRAWN OR BEEN DISMISSED, AND LIABILITIES THEREOF Article-17: Regarding the members that have withdrawn or been dismissed from the cooperative, particulars as to whether or not they or their heirs possess any right on the assets of the cooperative and what these consist of are specified in the Rules. These rights are designated according to the balance sheet of the year of their separation from the cooperative, excluding the reserves. The returns and the payments which tend to endanger the presence of the cooperative can be delayed by the General Assembly for a period of not more than three years, even if shorter periods are specified in the Rules. In such cases, the right to ask for a just indemnity from the cooperative is reserved. The credits and the rights of the withdrawn or dismissed members and their heirs are prescribed in case they are not asked for within a period of five years as of the date of acquisition of such rights. The terms stipulating that the withdrawn or dismissed member shall be totally deprived of their capitals or credits are invalid. PART THREE Rights and Liabilities of the Members A) DEED OF MEMBERSHIP Article-18: It is obligatory for the membership rights of each of the members to be represented with a deed of membership bearing names. The title of the cooperative, the name and surname and business and residence addresses of the owner of the bill and the dates of entering into and parting from the cooperative are borne by the said deed of membership. The owner of the deed of membership and the persons authorized to represent the cooperative sign these particulars. The money deposited or withdrawn by the member is recorded in order of time. If these records are related to the money paid by the cooperative, the member signs the related documents. The signed deed of membership is regarded as a receipt for payment. The said deed of membership can be prepared in the form of a membership account book, on the condition that it includes the Rules. The deeds of membership are not regarded as valuable assets, but do have the influence of an evidence document. B) MEMBERSHIP SHARES – PERSONAL CREDITS Article-19: It is required to collect at least one membership share from every member entering into a cooperative. The Rules may permit the collection of more than one shares by a member within a maximum limit to be specified in the Rules The value of a single membership share is 10.000 TL. Those entering into a cooperative can guarantee a maximum of 1000 shares. On the other hand, those entering into a superior institution of a cooperative guarantee a minimum of 50 shares. The value of a single membership share can be increased up to ten times within the decision of the Council of Ministers. (modified by Article 5 of the Law 3476). (*) Several shares can be represented on one single deed of membership. The shares not represented by deeds of membership are regarded as equivalent to 10.000 TL. (modified by Article 5 of the Law 3476). The loan demands of each cooperative are covered up with priority by the banks, institutions, or companies, depending on the field of operation of the cooperative. The investment activities of the agrarian cooperatives are supported by low-interest loans to be delivered via allotments to be spared from the budgets, within the principles of the legislation prepared by the related Ministry. (*) The value of a single membership share has been increased to 100.000 (a hundred thousand) TL with the Decree 93/4507 dated 12.6.1993 of the Council of Ministers published on the Official Gazette 21618 dated 25.6.1993 The personal creditors of any member can only seize the amount equivalent to the share of the member arising from the interests and income - expenditure differences and the share to be paid to the member upon the dissolving of the cooperative. C) CAPITAL IN KIND Article-20:The placement of the same kind of capital or the taking over of a present enterprise or the capitals in kind can be accepted by the Rules. 1- Evaluation, expert Article-21: If the value of the capital in kind is not specified in the Rules, this designation is realized by the expert to be elected by the majority of the members representing two thirds of the number of members at the first General Assembly to be called for by the founders. In case the members entering into the cooperative following its foundation are to put capitals in kind, this call for a meeting is made by the Board of Directors. In cases where it is not possible for two thirds of the members to come to a unanimous decision, the election of the expert is requested from the Civil Court of Peace. The report submitted by the expert or experts can be objected at the Civil Court of Peace within one week as of the date of notification. The decision to be made by the court is definite. 2- Decision quorum, acceptance of the reports Article-22:The subject is discussed after the expert assigned in accordance with Article 21 prepares the reports and submits them to the General Assembly meeting. A copy of the expert report is annexed to the letters of invitation. Following the reading and examination of the expert reports on the condition that at least half of the number of members are present at the meeting either in person or as represented and if deemed necessary after listening to the explanations of those who have put capitals in kind or the owners of the enterprises or the capitals in kind to be taken over, decisions are made through majority with respect to the approval or refusal of the same values or their evaluation upon the consent of related persons. Ç) EQUALITY IN RIGHTS AND OBLIGATIONS Article-23:The members are equal in rights and obligations within the principles accepted by this Law. 1- Right of obtaining information, balance sheet Article-24:The annual work report including the proposals of the Board of Directors about the form of distribution of the income-expenditure differences and the balance sheet and the report to be prepared by the auditors in accordance with the provisions of Article 66 are presented for examination by members at the headquarters and the branches if any for a period of one year, as of 15 days prior to the annual General Assembly meeting. It is obligatory to present one copy each of the balance sheet and the income - expenditure difference accounts. The right of the members to obtain information cannot be confiscated or restricted either by the Rules or by the decision of one of the organs of the cooperative. 2- Provisions on the confidentiality of commercial books and secrets and penalty thereof Article-25:The examination of the commercial books and the conditions about the communication of the cooperative is possible upon the clear permission of the General Assembly or by the decision of the Board of Directors. None of the members are authorized to be informed about the business secrets of the cooperative, except for those to be informed from the books and documents which they permitted to examine. Every member is obliged to always keep the business secrets which they happen to find out by any means, even in the case they later lose membership position. The member who does not conform to this obligation is sentenced to imprisonment up to one year or with a heavy fine from 500 TL to 10.000 TL or both upon the complaint of the cooperative, even if any kind of losses were not expected, apart from being responsible for the losses to arise against the cooperative 3- Right of attending General Assembly meetings (modified by Article 6 of Law 3476) Article-26:Except for the members who were not members three months ago, every member possesses the right to attend General Assembly meetings. With construction cooperatives, such condition is not required for attending General Assembly meetings. E) OBLIGATIONS AND RESPONSIBILITIES OF THE MEMBERS I- Term of membership and termination thereof Article-27:The amount of money that can be paid by the members for the shares undertaken is specified in the Rules. The cooperative demands the realization of these obligations from the members indebted with capital or other payment obligations through letters personally submitted or via registered posting or by announcements if this is not possible, by specifying a reasonable term. The memberships of those who do not conform with the provision that their obligations should be realized within one month following the second request will automatically terminate. The termination of the memberships of such persons does not necessitate the removal of the debts arising with respect to the Rules or otherwise. II- Responsibility of the Cooperative Article-28:Unless there exists a provision on the contrary in the Rules, the cooperative is only responsible for its creditors with the patrimony. 1- Unlimited responsibility Article-29: In case the assets of the cooperative are not adequate to cover up the debts of the cooperative, The Rules can include an article providing that the members can be obliged to be responsible in person and in an unlimited manner. In such cases, in case the creditor cannot obtain whole of their credits upon the liquidation of the cooperative either through bankruptcy or other reasons, the members of the cooperative shall be responsible in succession and with all their assets due to the debts of the cooperative. 2- Limited responsibility Article-30: A provision may be introduced into the Rules rendering each member liable from the cooperative debts in excess of his own share in person and up to a certain amount after the cooperative. The amount that the members will be personally liable may also be shown as proportional to the amount of their shares in the cooperative. The liability is set forth by the bankruptcy administration until the end of the bankruptcy. 3- Additional payment burden Article-31: The Rules may put a burden of additional payment on the members. However it is obligatory to use the additional payments only for the purpose of covering up the balance deficits. The additional payment burden may not only be unlimited but also limited as proportional to specific amounts or volume of work or shares. In case of bankruptcy of the cooperative, the right of demanding the additional payment belongs to the bankruptcy administration. 4- Non-permitted limitation Article-32:The provisions of the Rules postponing the liability to certain time or putting this burden on some member groups are not valid. 5- Procedure in case of bankruptcy Article-33: In case of bankruptcy of the cooperatives the members of which are liable in person or are responsible for additional payments, the bankruptcy administration demands for the payment of the debts corresponding to the share of each member, as well as preparing the sequence schedule. The amounts that are not collected are shared between the other members. The active remainder is returned following the definite designation of the share schedules. The recourse rights of the members against each other are reserved. The members reserve the right to object to the temporarily specified debts and the share schedules, in accordance with the provisions of the Execution and Bankruptcy Law. 6- Modification of the provisions on responsibility Article-34:The modifications about the liability of the members and the additional payment burden are only possible through the modification of the Rules. The placement of liability and additional payment burden or the increasing of these expresses a provision in favor of the entire credits of the cooperative upon the registry of the related decision. The decisions about the reduction of the liability do not cover the debts arisen prior to registry. 7- Liability of the members entering the cooperative Article-35: In a cooperative where the members are liable in person or obliged with additional payments, any individual newly entering the cooperative being aware of his condition becomes equally responsible as the other members for the debts previously arisen. Contract terms contrary to this and the contracts between the members are not valid for third persons. 8- Liability following the withdrawal of a member or the dissolving of the cooperative Article-36:As of the date a member with limited or unlimited responsibility dies or it becomes definite that s/he withdraws from the cooperative for any other reason, in case the cooperative goes bankrupt within one year or a longer period if specified in the Rules, the member cannot avoid responsibility for the debts arisen prior to his withdrawal. The burden of additional payment continues to be present under the same conditions and within the same period. If a cooperative dissolves, in case it is decided upon announcing the bankruptcy of the cooperative within one year as of the registry at the Trade Registry Office or within a longer period if specified in the Rules, the members are likewise responsible for the additional payments. 9- Prescription in responsibilities Article-37:The demands of the creditors for rights arising from the personal liabilities of the members can be put forward by each of them for a period of a further year, as of the termination of the bankruptcy transactions, if not invalidated sooner with the enforcement of a legal provision. The recourse rights of the members against each other are prescribed are prescribed within one year as of the realization of the payment forming the basis of this right. PART FOUR Cooperative Accounts A) INCOME-EXPENDITURE DIFFERENCES – DIVISION THEREOF AND APPLICATION OF INTEREST TO SHARES Article-38: In case there are no provisions stipulating the contrary in the Rules, the entire income obtained at the end of a one-year activity as a result of the transactions made with the members is added to the reserves of the cooperative as the income-expenditure difference. If the distribution of the income-expenditure difference between the members is anticipated, this distribution is realized proportional to the level of operation of the members. A provision can be introduced to the Rules stating that an interest can be paid for the capital shares of the members after the distribution of at least 50% of the income-expenditure difference upon the decision of the General Assembly, to be not ore than the maximum interest rates applied for the State Bonds. (modified by Article 7 of Law 3476) A provision can also be introduced to the Rules stating that the revenues obtained from the non-member transactions can be distributed to the members proportional to their capital shares. If not distributed, these are accumulated in a special fund to be used for work that will assist the development of the cooperative. (modified by Article 7 of Law 3476) In case the results of the one-year activity are negative, the deficit is covered up from the reserves and incase these are not adequate, by additional payments or by joint capital shares. Unless the negative results are removed, the distribution of income-expenditure differences and interests cannot be realized. B) SPARING RESERVES Article-39: In the cooperatives, distribution to the members is not realized unless at least 10% of the income-expenditure difference is spared as reserves; an additional 5% should be reserved as extraordinary reserves in cooperative superior institutions. The provisions to be introduced in the Rules about the distribution of the reserves to the members are not valid. C) CHARITY FUNDS FOR THE MEMBERS AND THE PERSONNEL Article-40:The Rules may introduce provisions about the establishment of donation institutions for the officials, workers, and the members of the cooperatives and the operation of these. If the assets spared for donation purposes are specified, these are deposited in a special account for the purpose of realizing the objectives for which they were assigned, thus being separated them from the patrimony of the cooperative. D) FUNDS TO BE SPARED WITH PRIORITY FROM THE INCOME-EXPENDITURE DIFFERENCE Article-41:The reserves and the money to be deposited in other funds founded in accordance with the Rules and the Law are spared with priority from the income-expenditure difference that is to be divided. The methods and conditions for using the reserves and special funds are specified in the Rules. PART FIVE Cooperative Organs A) GENERAL ASSEMBLY I. Authority Article-42:The General Assembly is the organ of the cooperative with maximum authority which represents the entire members. The General Assembly cannot transfer or renounce from the following authorities: 1. Modify the Rules, 2. Elect the Board of Liquidation whenever deemed necessary as well as the members of the Board of Directors and Auditors, 3. Decide upon the division of the operation account, balance and whenever deemed necessary income - expenditure difference. 4. Acquittal of the Board of Directors and Auditors, 5. Decide upon the subjects imposed on the General Assembly by Law or by the Rules, 6. Designate the qualification, location and the maximum price of the immovable to be sold, within the methods to be followed in the purchasing and selling of an immovable (appended with Article 9 of Law 3476), 7. Designate the method of realization for manufacturing and construction works (appended with Article 9 of Law 3476), 8. Designate number of buildings and work-places and the number of the members of the cooperatives in construction cooperatives (appended with Article 9 of Law 3476) . III- Call 1- Those authorized for calling Article-43:The Board of Directors and any other organ authorized in this matter by the Rules, the Board of Auditors whenever deemed necessary, the association with which the cooperative is connected and the liquidation officials hold the right to call the General Assembly for a meeting. However, in case the General Assembly cannot meet as stated above, the related Ministry bears the authority to call the General Assembly for a meeting. 2- Request of the members, call from the Ministries, permission of the court Article-44:The General Assembly is called for a meeting with the request of at least 10% of the number of members, on the condition that the number is not less than four members. In case the General Assembly does not comply with this request within a minimum of ten days, the General Assembly can be called for a meeting upon the application of the requestors or directly by the related Ministry. In case the General Assembly does not still meet, the requestors can collect the permission to call the General Assembly for a meeting in person. 3- Form (modified by Article 11 of Law 3476) Article-45:The General Assembly meets ordinarily or extraordinarily whenever deemed necessary. It is obligatory to hold the ordinary meeting within six months as of the end of each of the account periods and at least once in a year. (*) The General Assembly is called for a meeting within the form and method specified in the Rules. The meeting quorum is specified in the Rules. However it is obligatory for at least one fourth of the members to be present in person or as represented in the construction cooperatives. The date, place, and the agenda of the General Assembly meeting is notified to the related Ministry and the civil Administrative Officer in writing, at least 15 days prior to the meeting. The chairmanship and the administration of the General Assembly is realized by the chairman and the members elected from within the members or the representatives of the superior institutions. III- Agenda (modified by Article 12 of Law 3476) Article-46:The agenda is written on the meeting invitation and the announcement. If the modification of the Rules is in question, it is sufficient to designate the numbers of the articles to be modified in the announcement to be made. It is compulsory to include in the agenda the conditions to be notified by at least one tenth of the members, on the condition of not being less than four, in writing at least twenty days prior to the General Assembly meeting. (*) The members of the Board of Directors who do not call the General Assembly for the ordinary meeting are sentenced to imprisonment from three months up to two years and to a heavy fine of between 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/2. The topics that are not included in the agenda cannot be discussed. However upon the written request of at least one tenth of the members registered in the cooperative prior to the commencement of the discussion of the agenda subjects, the election of the account examination commission, the leaving back of the examination of the balance sheet and the acquittal, the decision-making about the withdrawn or dismissed members, the calling of the General Assembly to a new meeting, the annulment of the decisions of the Board of Directors claimed to be conflicting the General Assembly decisions as per Law, the Rules and the good intention principles and the subjects regarding the dismissal of the members of the Board of Directors and replacement thereof are included in the agenda upon the consent of one more than half of those attending the meeting. IV- The condition of presence of the entire shareholders Article-47:As long as all of the members of the cooperative are attending the General Assembly meeting and as long as there are no objections, decisions can be made even if the provisions related to the meeting invitation are not adhered to, on the condition that the other provisions about the General Assembly meetings are reserved. It is obligatory for such decisions to be signed by the members or by the representatives to be elected unanimously by the members at the meeting. V- Right to vote 1- In general Article-48: At the General Assembly, each member has the right to use only a single vote. 2- Representation Article-49: If there is an explanation in the Rules, any member can transfer the right of voting at the General Assembly meeting to another member by permitting accordingly in writing. No members can represent more than one members at the General Assembly. In the cooperatives the number of members of which are over 1.000, the Rules may include provisions allowing each member to represent up to nine members at the most at the General Assembly. For the spouses and the first degree relatives, the membership condition is not required with regard to representation. 3- Those who cannot vote Article-50: Those who have in any manner participated in the realization of the cooperative works cannot participate in voting with regard to the decisions on the acquittal of the Board of Directors. This provision does not apply to auditors. None of the members can use the right of voting in the discussions about a business article, or a case between the cooperative and him/herself or his/her spouse or ancestors and descendants. 4- Decisions 1- In general Article-51:Unless there is a provision conflicting the Law or the Rules, one more than half of the votes are required for the decisions of the General Assembly and the elections. Two thirds of the practically used votes are required for the decisions upon the liquidation of the cooperative or the modification of the Rules. The Rules may introduce heavier provisions regarding the majority of the votes necessitated for making these decisions. 2- The increasing of the shares of the members modified by Article 1 of Law 2475 dated 8.6.1981) Article-52: For the decisions upon the hardening of the personal responsibilities of the members or the introduction of additional obligations, the consent of three fourths of the entire members is required. However, this condition is not required for the decisions to be made for the purpose of benefiting from the increase in the amount of credit, for the cooperatives obtaining credits from state institutions and the provisions dictated in Item 1 of Article 51 is applied. These decisions do not bind the members who have not participated in the decision-making and who have notified the cooperative that they have withdrawn from the cooperative within three months as of the date of advertisement. Under such circumstances, the declaration regarding withdrawal from the cooperative takes effect as of the date of validity of the decision. The utilization of the right of withdrawal from the cooperative in this manner cannot be related to the payment of withdrawal indemnity. 3- The cancellation of decisions and, terms thereof Article-53: The following persons can apply to the court against the decisions of the General Assembly, where the cooperative headquarters is located, with the claim that the decisions are in poor compliance with the Law, the provisions of the Rules and the principles of good intention, within a period of one month as of the date of the meeting: 1- The shareholders who were present at the meeting but were against the decisions and who enforced the addition of this term into the written report, who were unjustly prevented from casting their votes and who are claiming that the invitation to the General Assembly meeting was not realized in compliance with the procedures, that the agenda was not announced or notified as it should have been, or that some of the people in favor of the decision were not authorized to attend the General Assembly meeting; 2- The Board of Directors; 3- Each of the members of the Board of Directors and the inspectors, in case the fulfillment of the decisions necessitate their personal responsibility. The date on which the lawsuit of cancellation is opened and that on which the trial will be held is announced by the Board of Directors in accordance with the procedure. The trial cannot commence prior to the end of the one-month period that results in the loss of rights, as dictated in Item 1. If more than one lawsuits are opened, the cases are merged and a single trial is made. Upon the request of the cooperative, the court may decide upon the display of a guarantee by the plaintiffs against probable losses. The court specifies the nature and the amount of guarantee. The cancellation of a decision applies to all members. 4- Voting by mail and the meeting of representatives Article-54: In the cooperatives with members more than 1.000, the following practices may render a General Assembly, on the condition that such a provision is introduced to the Rules: 1. That all or part of the decisions of the General Assembly was taken by the votes of the members sent by mail, 2. The group of representatives elected from within the members, consisting of divided groups, with a view to cast their votes in accordance with the instructions to be specified by the decisions to be made. In case of voting by mail, the content of the letters are specified following its examination in front of the Board of Directors and the representative of the related Ministry, and is recorded with a written report. The decision regarded to have been taken according to the written report signed by those present takes effect. In the General Assembly of the group representatives, each representative possesses votes at the number of members s/he is representing. The voting of the representative in poor compliance with the instruction s/he has received shall have no effect on the decision. B) BOARD OF DIRECTORS I- Obligations and the number of members thereof Article-55: The Board of Directors is the executive organ of the cooperative, managing the activities of the cooperative within the provisions of the Law and the Rules, as well as representing the cooperative. The Board of Directors consists of at least three members. It is obligatory for these and their substitutes to be members of the cooperative. Legal entities elected for the Board of Directors notify the cooperative of the names of their representatives. II- The conditions and the fee of membership (modified by Article 14 of Law 3476) Article-56: The following qualifications are required for the members of the Board of Directors: 1- To be citizens of the Republic of Turkey, 2- Not to be members of the Boards of Directors of other cooperatives with similar fields of activity, 3- Not to have been tried and found guilty as per the provisions of the Turkish Punishment law with regard to embezzlement, theft, corruption, bribe, misuse of duties, forgery, thievery, cheating, fraudulent bankruptcy, misuse of trust, and the crimes committed against the personality of the State or as per this Law. The auditors investigate the conditions for membership. The Board of Directors terminate the assigned duties of those who were selected although they did not have these qualifications and those who lost such qualifications later. (*) Although the duties of those against whom public lawsuits are opened for the above-dictated crimes continue until the first General Assembly meeting, a topic is included in the agenda of the first General Assembly meeting by the Board of Directors with regard to the dismissal or the continuation of the duties of such members. If the Board of Directors loses the meeting quorum due to this reason or any other reason to be specified in the Rules, adequate number of substitute members are invited immediately for the vacant memberships of the Board of Directors by the board of auditors. (**) One or several of the members of the Board of Directors can be elected as delegate members, with the authority to represent the cooperative. The election and changing of the delegate members should e registered with the Trade Registry Office. (*) The members of the board of auditors of the cooperatives or the superior institutions violating Item 2 are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/3. (**) The members of the board of auditors of the cooperatives or the superior institutions violating Item 4 are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/3. No kind of payments under any names can be delivered to the members of the Board of Directors, except for the salaries, attendance fees, (ristourne), and allowances specified by the General Assembly. (*) III- Term of membership Article-57: The members of the Board of Directors are elected for a maximum period of four years. Unless there is a provision on the contrary, they can be re-elected. IV- Administration and representation 1- Transfer of authority Article-58: The Rules may transfer the authority of assigning one or several directors or members of the Board of Directors who are not required to be cooperative members, for the partial or entire administration and representation of the cooperative, to the Board of Directors. 2- Scope and restriction thereof Article-59:The persons authorized to represent can realize all legal transactions for and on behalf of the cooperative and necessitated by its objective. The restriction of the said representative authority does not impose any provisions against the third persons with good intentions. The records registered with the Trade Registry Office regarding that the representative authority is detained for only the works related to the basic enterprise or a branch or the usage of the cooperative title together, is reserved. The cooperative is responsible for the losses arising from the unjust actions taken by the persons authorized to manage or represent, during the execution of their duties. It is compulsory that the purchase of the immovable properties decided to be purchased by the cooperative via a title deed transfer or an agreement of selling promise with an annotation be delivered to the real estate registry office. (appended with Article 15 of Law 3476)(**) (*) The members of the Board of Directors and the officials of the cooperatives or the superior institutions violating Item 6 of Article 58 are sentenced to imprisonment from 3 months up to 2 years and a heavy fine of 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. (**) The members of the Board of Directors and the officials of the cooperatives or the superior institutions violating Item 4 of Article 59 are sentenced to imprisonment from 3 months up to 2 years and a heavy fine of 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. It is required that the immovable to be purchased is in accordance with the objective of the cooperative (appended with Article 15 of Law 3476). The members of the Board of Directors administration the personnel of the cooperative cannot realize any commercial transactions with the cooperative within the subject of the cooperative in their own names or in the name of others in person or indirectly, except for the membership transactions. (appended with Article 15 of Law 3476) (*) The announcements, advertisements and explanations to be made by the cooperatives and their superior institutions for the purpose of registering members cannot be deficient or untrue and cannot include misleading information and elements. (appended with Article 15 of Law 3476) (**) The distribution and the persons authorized to represent cannot use the authorities that the General Assembly cannot transfer. (appended with Article 15 of Law 3476) (**) 3- Signature Article-60: The persons authorized to represent the cooperative can only bind the cooperative by putting their signatures under the title of the cooperative. 4- Registry Article-61:The cooperative presents the names and titles of the members of the Board of Directors and the persons authorized to represent the cooperative and samples of the notary-attested decisions based on this authority to the Trade Registry Office. 5- Degree of fastidiousness and the liabilities of the members Article-62:The Board of Directors shows the fastidiousness necessitated by the administration of the cooperative works and makes its best efforts for the success and the development of the cooperative. The Board of Directors is responsible for the preparation, keeping, and the maintenance of its own written reports, the reports of the General Assembly, the necessary books and the list of the members in an organized manner, and for presenting the operation account and the balance sheets prepared in accordance with the legal provisions for inspection purposes. The members of the Board of Directors and the officials of the cooperative are responsible for the losses arising from their own faults. Such persons are punished in a manner (*) The members of the Board of Directors and the officials of the cooperatives or the superior institutions violating Item 6 are sentenced to imprisonment from 3 months up to 2 years and a heavy fine of 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. (**) The members of the Board of Directors and the officials of the cooperatives or the superior institutions violating Item 7, and 8 are sentenced to imprisonment from 3 months up to 2 years and a heavy fine of 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. similar to the ‘State Officials’ regarding the actions and behaviors deemed as crime, and especially for the crimes they have committed on money and properties, balance sheets, written reports, reports and other papers, books and documents of the cooperative. V- Works to be performed in case of the inability of the cooperative Article-63: In case there are serious reasons for the inability of the cooperative, the Board of Directors immediately prepares an interim balance sheet on the basis of the current market prices. In case the last year’s balance sheet or a liquidation balance sheet prepared letter, or the interim balance sheet dictated above designates that the resources of the cooperative are not any more able to cover the debts, the Board of Directors notifies the related Ministry about the situation and calls the General Assembly for an extraordinary meeting. In a cooperative where share promissory notes have been forwarded, in case half of the resources of the cooperative remains to be bounced within the last year’s balance sheet, the Board of Directors calls the General Assembly for a meeting and presents the situation to the information of the members. The Board of Directors at the same time notifies the court and the related Ministry about the situation. However, in cooperatives where the members are obliged with additional payments, in case the deficiency specified in he balance sheet is not covered up with the additional payments of the members within three months, the related Ministry is notified. In case it is deemed possible that the financial situation can be corrected, the court may delay the opening of the lawsuit of bankruptcy, upon the request of either the Board of Directors or one of the creditors. In such cases, it takes the precautions related to the protection and the continuation of the resources of the cooperative, such as keeping the resources book or the assignment of an administrative official. VI- Dismissal Article-64: The Board of Directors can always dismiss the personnel it has assigned for the realization of the works, the directors it has assigned, or the other representatives and deputies. Those who are dismissed reserve the right to demand indemnity. C) AUDITORS I- Election Article-65: The auditors inspect the entire transactions and accounts of the cooperative for and on behalf of the General Assembly. The General Assembly elects one or more auditors as the auditing organ for a period of at least one year. The General Assembly may elect substitutes for the auditors. It is not compulsory for the auditors and their substitutes to be members of the cooperative. The provisions present in Paragraphs 1 and 3 of Item 1 of Article 56 also apply to the auditors. II- Working 1- Obligation of investigation (*) Article-66: The auditors are obliged to examine whether or not the operation account and the balance sheet conform to the books, whether or not the books are kept accordingly, and whether or not the transactions are realized in accordance with the provisions stipulated by the results of the operation and the patrimony. In cooperatives where members are personally responsible for or obliged with additional payments, the auditors are obliged to examine whether or not the list of members is kept in good compliance with the procedures. The administrators submit the books and the documents to the auditors for this purpose. Upon the request of the auditors, all kinds of information with regard to the content book and the principles with which this book has been organized and any other subject must be presented.(**) The members are authorized to call the attention of the auditors in issues they deem necessary and to demand for an explanation. 2- Preparing reports (***) Article-67: The auditors are obliged to submit their annual proposals to the General Assembly along with their reports. The auditors are also obliged to inform the related organs and, whenever deemed necessary, the General Assembly of the faults and wrongdoings in the execution of the works, the actions conflicting Law and the Rules that they designate within the scope of their duties. The auditors attend the meetings of the Board of Directors and the General Assembly. However they cannot cast votes at the Board of Directors meetings. (*) The members of the board of auditors of the cooperatives or the superior institutions violating this Article are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/3. (**) The members of the Board of Directors of the cooperatives or the superior institutions violating Item 2 are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/2. (***) The members of the board of auditors of the cooperatives or the superior institutions violating this Article are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/3. 3- Obligation to keep secrets Article-68: The auditors cannot disclose the particulars they have attained during their duties and which are expected to be damage the cooperative or the members upon disclosure, to cooperative members or third persons. III- Special Provisions Article-69: It is possible to introduce broader provisions regarding the auditing organization, to increase the authorities of the auditors and especially to anticipate interim auditing by the Rules and the decision of the General Assembly. PART SIX Cooperative Associations, Central Associations of Cooperatives, Turkish National Cooperatives Association, Board of Consultants Duties and Liabilities Article-70: Cooperative associations, central associations of cooperatives and the Turkish National Cooperatives Association are established for the purpose of realizing the services such as the protection of the joint benefits of the cooperatives, the realization of economic activities for achieving objectives, coordinating and auditing the activities of the cooperatives, organization of the relations with foreign countries, development of the cooperative-business and the realization of training activities and recommendations on the cooperative-business. The provisions of Article 62 apply to the members and the officials of the cooperative associations and the Turkish National Cooperative Association. Obligation Article-71: Obligations in excess of those imposed by Law or the Rules cannot be imposed on the members of the cooperatives joining in the associations. A) COOPERATIVE UNIONS Article-72:The conditions that associations can be established by 7 or more cooperatives the fields of operating of which are either the same or related to each other, can be specified within their Rules. Such associations are established in the form of cooperatives. In case the related Ministry specifies regions, more than one cooperatives cannot be established at these regions on the same field of operation. (appended with Article 15 of Law 3476) 1- General Assembly Article-73:The most authorized organ of the cooperative associations is the General Assembly which consists of the representatives of the cooperatives, unless there is a provision stipulating the contrary in the Rules. It is possible for the members of the Board of Directors to be elected as representatives. 2- Board of Directors Article-74: The Board of Directors of the association is elected from within the representatives included in the General Assembly of the association. It is compulsory for the members to be elected to the Board of Directors not to be representatives of the same cooperative. 3- Inspection and training (modified by Article 18 of Law 3476) Article-75: The central associations of cooperatives audit the connected associations and cooperatives and provide the training and education needs thereof. In case the establishment of the central association is not complete, the associations carry out the auditing of the connected cooperatives. The results of the auditing realized by the superior institutions are notified to the related Ministry. The cooperatives and the superior institutions thereof share the expenditures related to the auditing and the training services provided for themselves, within the rules and principles to be specified by its superior institution. B) CENTRAL UNIONS FOR COOPERATIVES Article-76: The cooperative associations establish central associations among themselves in the form of cooperatives. The General Assemblies of the central associations of cooperatives are established by the representatives to be elected by the General Assemblies of the cooperative associations included in this cooperative central association. The members of the Board of Directors of the cooperative associations can be elected to the memberships of the central associations of cooperatives. The cooperative associations having similar fields of operation cannot establish more than one central associations of cooperatives. C) TURKISH NATIONAL COOPERATIVES UNION Article-77: The associations or the central associations of cooperatives can establish a Turkish National Cooperatives Association in the form of a cooperative. The conditions of participation are specified in the Rules of the Turkish National Cooperatives Association. The representatives to be elected by the General Assemblies of the central associations of cooperatives establish the General Assembly of the Turkish National Cooperatives Association. The fact that this board is constituted from the Board of Directors of the cooperatives, associations and central associations of cooperatives can be taken under provision with the Rules. D) DESIGNATION OF THE REPRESENTATIVES Article-78: The number of the representatives of the cooperatives, associations, and central associations of cooperatives which depends on the number of members and should not exceed 5 persons, to constitute the General Assemblies of the associations, central associations of cooperatives and the Turkish National Cooperatives Association is specified in their Rules. Article-79:The Associations, the Central associations of cooperatives, and the Turkish National Cooperatives Association prepare their Rules in accordance with the provisions of this Law hereby. E) BOARD OF CONSULTANTS Article-80: The participation of the General Board of Directors of the Turkish National Cooperatives Association and one representative each from the State Planning Organization, the Ministry of Industry and Trade, the Ministry of Agriculture Forestry and Rural Affairs, the Ministry of Finance and Customs, the Ministry of Training Youth and Education, the banks financing cooperatives and the Turkish Cooperatives Institution constitute the ‘Turkish Cooperatives Consulting Board’. The duties and the authorities and the form and conditions of working of this board are specified within the rules and regulations prepared by the related Ministry. PART SEVEN Liquidation of the Cooperatives A) REASONS FOR LIQUIDATION (modified by Article 20 of Law 3476) Article-81: The cooperatives are liquidated for the following reasons: 1- As required by the Rules, 2- By the decision of the General Assembly, 3- By the opening of the lawsuit of bankruptcy, 4- Upon the decision to be made by the related Ministry, regarding other conditions anticipated by Law, 5- Due to merging with another cooperative or by transfer thereof, 6- In case the ordinary General Assembly meeting is not held in three successive years, 7- By the decision to be taken by the court upon the designation by the related Ministry of the fact that the means of achieving objectives are absent. The construction cooperatives are assumed to have reached their objective and liquidated, upon the completion of the works specified in their Rules and following the registry of the buildings in the name of the members after it is passed on to individual proprietorship. However, if the Rules is modified in a convenient manner within a period of six months following the date of registry, and if the objective of the cooperative is also similarly modified, the provision on liquidation is not applied. The individual relations of the members in accordance with the Flat Ownership Law are finalized within one year at the latest, following the gathering of the building usage permission in construction cooperatives. In case no liquidation officials are elected by the court or by the General Assembly, the Board of Directors carries out the liquidation transactions. A fee to be specified by the authority having realized the assignment is paid to the s of the board of liquidation. If a special quorum is not specified in the Rules, quorum is not required at the General Assembly meetings of the cooperatives in case of liquidation. The duties of the Board of Liquidation are specified in the Rules. The members of the Board of Liquidation are obliged to work for the purpose of completing the liquidation transactions as soon as possible. The provisions stipulated by the Paragraph 3 of Item 1 of Article 56 and 62 do also apply to the members of the Board of Liquidation. B) NOTIFICATION TO THE TRADE REGISTRY OFFICE Article-82: The dissolving of the cooperative for reasons other than bankruptcy is registered and announced by the authorized organs of the cooperative with the Trade Registry Office. The identities of the authorized organs are specified in the Rules. C) DIVISION OF THE LIQUIDATION PATRIMONY Article-83: The properties remaining after the payment of the entire debts of the cooperative entering into a state of liquidation and after the return of the member share prices, can only be divided between the members, if this condition is anticipated in the Rules. Unless another method of solution is accepted in the Rules, the division is realized equally between the registered members and the legal successors at the date of dissolving. In case there are no explanations in the Rules stipulating that a division is to be realized toward members, then the amount remaining after liquidation is transferred to the Turkish National Cooperatives Association for being used in accordance with the objectives of the cooperative-business. If such a association has not been established, this amount is deposited in the fund under the command of the related Ministry, to be donated to the institutions aiming to achieve the objectives dictated in Article 94. D) DISSOLVING THROUGH UNIFICATION Article-84: If any cooperative is dissolved by being taken over by another cooperative with its entire active and passive, the following provisions are applied: 1- The Board of Directors of the cooperative taking over invites the dissolved cooperative to notify the credits in accordance with the provisions stipulating liquidation. 2- The patrimony of the dissolved cooperative is administered separately, until its debts are bound to payments or guarantees. The administration is taken over by the Board of Directors of the cooperative taking over. 3- The Board of Directors of the cooperative taking over is responsible against the creditors in person and in succession for the separate execution of the administration. 4- During the period of separate administration of the patrimony, the authorized court responsible for the trial of the cases before the dissolving of the cooperative will be responsible for the cases to be opened against the dissolved cooperative. 5- In the relations between the creditors of the dissolved cooperative and the cooperative taking over and creditors thereof, the properties taken over are assumed to belong to the dissolved cooperative within the same period. In case of bankruptcy of the cooperative taking over on the other hand, these properties constitute a different desk. If deemed necessary, these are used to pay the debts of only the dissolved cooperative. 6- The patrimony of both cooperatives can only be unified as of the date after which it is possible to decide upon the properties of the dissolved cooperative. 7- The registration about the dissolving of the cooperative is requested from the Trade Registry Official. Following the payment or taking under guarantee of the debts, the registry of the cooperative is removed. 8- Upon the registration of the dissolving of the cooperative, the members as well join the cooperative taking over, along with the entire rights and debts. 9- As long as the patrimony is registered separately, the members of the dissolved cooperative can only be pursued for the debts of the dissolved cooperative and regarding their responsibilities until then, with the related principles. 10- During the same period, in case the burden of responsibilities or the additional payment obligations of the members of the dissolved cooperative is reduced as a result of unification, this reduction cannot be put forward against the creditors of the dissolved cooperative. 11- In case personal responsibilities or additional payment burdens arise or increase for the members of the dissolved cooperative as a result of unification, the decision for unification can be made only by the consent of three fourths majority of the entire members. The provisions stipulating responsibility and the additional payment burden are not applied to the members not agreeing with the decision for unification and in addition for those who have notified of their withdrawal from the cooperative within three months as of the date of advertisement of the decision. E) BEING TAKEN OVER BY A LEGAL PUBLIC ENTITY Article-85: The assets of a cooperative can be taken over by a municipality, an economic State enterprise, a public enterprise, or societies or association working for the good of the public. In such cases, it is necessary for the decision to be taken by the General Assembly to be registered and announced, in accordance with the provisions on dissolving. Under conditions when the assets of such a cooperative are taken over by a municipality, an economic State enterprise, a public enterprise, or societies or association, the General Assembly may make a decision not to realize liquidation. As of the date of announcement of the decision of transfer, the active and passive of the cooperative are transferred to the possession of the institution taking over. The name of the dissolved cooperative is removed from the trade registry. This particular is announced as well. Each of the creditors of the unified establishment and the cooperative can raise an objection to the unification by applying to the authorized court within three months as of the date of advertisement. Unless the right of objection is not given up or a decision made by the court refusing the objection becomes definite or the guarantee to be appreciated by the court is not delivered by the establishment or the cooperative, the unification is not valid. PART EIGHT Duties and Authorities of the Related Ministry A) GENERAL DUTIES AND AUTHORITIES OF THE MINISTRY Article-86: The major duties and authorities of the related Ministry over the cooperatives are as follows: 1- To guide the cooperatives, cooperative associations, central cooperatives associations, and the Turkish National Cooperatives Association on their establishment and organizations and to assist them in administration issues and activities, 2- To supervise, inspect and get other bodies inspect the cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association, 3- To notify the court of the reasons necessitating the dissolving of the cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association, 4- To make necessary attempts at the related Ministries and the institutions for the foundation, crediting with priority, and activating in favor of the country of the cooperatives, especially those related to production, and act as a coordinator, 5- To realize organizations in the field of public and social security funds in order to support the application of current regulations with respect to cooperatives and for the cooperatives and superior institutions thereof. (appended with Article 21 of Law 3476) B) REPRESENTATIVES OF THE RELATED MINISTRY AND THE CONDITION OF VALIDITY OF THE DECISIONS Article-87: The related Ministry assigns a representative to be present at the General Assembly meetings of the cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association. The General Assembly meetings are opened and continued at the presence of a representative from the Ministry. The administration ensures the presence of a representative on the notified day. The representatives are in charge of the inspection and the ensuring of the execution of the meeting in compliance with the Law, the Rules, and the agenda. A price to be designated by the related Ministry at an amount not to exceed twice the local daily allowance of the senior first degree official is paid to each of the representatives. This price is deposited in the treasury of the finance office by the cooperatives and superior institutions thereof, prior to the General Assembly to be delivered to the assigned representative. (modified by Article 22 of Law 3476) The representatives sign the written reports including the decisions of the General Assembly and the list of those attending the meeting. The representative is required to include his opinion on the decisions conflicting Law and the Rules within the written reports. The qualifications and the duties of the representatives are specified by related rules and regulations. However, in case the representative does not attend the meeting despite the realization of the application in accordance with the procedure, the local administrative officer is notified of this situation, for rendering the execution of the meeting. If the representative still fails to attend the meeting, the meeting is initiated in an hour. C) PREPARATION OF SAMPLE RULES DOCUMENT Article-88:The related Ministry prepares sample Rules to be modeled by cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association, on the condition of obtaining the opinions of the institutions in question. D) METHOD OF ACCOUNTING AND BOOKS Article-89:The method of keeping the accounts of the cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association and the books they are obliged to keep may be designated by the related Ministry. The provisions of the Tax Procedure Law related to these conditions are reserved. E) CONTROL AND INSPECTION Article-90:The related Ministry may get the transactions, accounts and assets of the cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association inspected by inspectors or cooperative controllers. The rules and regulations specify the election, the method of working, and the duties ad authorities of the controllers. These organizations are obliged to conform to the instructions to be delivered by the related Ministry, according to the outcome of the inspection. (*) (*) The members of the board of auditors of the cooperatives or the superior institutions violating Item 3 are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/2. The state institutions, foundations, municipalities, and the related Ministries providing the cooperatives and their superior institutions with loans may inspect whether or not the supplied loans are being used in accordance with the objectives, the conformity with the plans and projects and from the viewpoint of technical features and quality. (modified by Article 23 of Law 3476) Those who are assigned at the cooperatives and their superior institutions are obliged to display the properties, money, securities, and the books and documents related to these, even if confidential, to the inspectors, cooperative controllers, and the auditing officials of the credit institutions, to assist in the counting and examining processes, to deliver the requested information in accordance with the truth and completely and to forward correct declarations. (appended with Article 23 of Law 3476) (*) F) CHARGING WITH CONTROL AND INSPECTION ACTIVITIES Article-91: The related Ministry may assign the cooperative superior institutions, related establishments, and independent inspection institutions for the inspection works. The rules and principles related to these are specified by the rules and regulations to be prepared according to Article 90. ¬ (*) The members of the Board of Directors of the cooperatives or the superior institutions violating Item 5 are sentenced to imprisonment from 3 months up to 2 years and a heavy fine of 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/1. PART NINE Miscellaneous Provisions A) PROHIBITION FROM POLITICAL ACTIVITIES (modified by Article 25 of Law 3476) (*) Article-92: The cooperatives and their superior institutions cannot realize activities that are of political purpose and toward the disturbance of the general security, public security and order; neither the cooperatives nor their superior institutions can be involved in activities of such purposes. The cooperatives and their superior institutions can under no circumstances accept any kind of financial assistance from the political parties and organizations or from the persons and organizations who realize the activities dictated in Paragraph 1, nor can they provide them with financial assistance. The Boards of Directors and Auditors of the cooperatives and their superior institutions, as the representatives of these institutions, cannot participate at any kind of meetings to be organized by political parties. B) EXEMPTIONS Article-93: 1- The cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association are exempted from the following: a) The interests and commissions they have taken from each other and the money they have taken from their members for bailing purposes – from the bank and Insurance Procedures Tax. b) The certifying of all kinds of books and Rules and the sealing of the at the opening certifications and all kinds of duties and Stamp Tax. c) All kinds of taxes to be collected from the immovable properties they possess, as long as they are not rented or they are not allocated at places for the purpose of obtaining an income. d) All kinds of taxes and duties related to the immovable properties the rights of which are to be transferred by the members. e) The announcement to be submitted in accordance with Article 13 is not subject to stamp tax or other fees and tolls. 2- In case the servitude of the immovable properties and the obligation of the immovable properties are put as capitals to the cooperatives, cooperative associations, central cooperatives associations and the Turkish National Cooperatives Association – from the reduced rates as dictated in Article 9 of the Real Estate Purchasing Tax Law. (*) The founders the cooperatives, the chairman and members of the Board of Directors, and in case this action takes place at a General Assembly meeting, the chairmen of the General Assembly meeting who have tolerated such action are sentenced to imprisonment from 3 months up to 1 year, depending on the type and degree of the act as Per the Article 26 of the Law 3476 and the appended Addendum 2/4. 3- From the Corporate Tax within the rules and principles dictated in Item 16 of Article 7 of Law 5422 on Corporate Tax Law modified by Law 199. 4- In case the cooperatives, cooperative associations, central cooperatives associations do not join the superior institutions which have become active, they cannot benefit from the exemptions specified in this Article, except for those specified in Paragraph (b) of Item 1 and 2. C) FUND FOR REALIZING SERVICES RELATED TO PROMOTION AND TRAINING Article-94: 1% of the positive income-expenditure difference realized according to the annual balance sheets of the cooperatives are deposited at a fund under the command of the related Ministry, for services such as guidance related to the promotion, training, and organization of cooperative-business and assisting the cooperatives with recommendations on administration and activities. D) DISPUTES, ARBITRATION COMMITEES Article-95: The disputes to arise between the organs of the cooperatives and the cooperatives themselves, and the cooperatives and the cooperative associations they are connected to, and the central associations of cooperatives and the Turkish National Cooperatives Association due to the conditions related to the fields of operation can be settled by arbitration committees as set forth in the Rules, on the conditions that the general provisions are reserved. E) RESERVED PROVISIONS Article-96:The provisions of Law 2834 on Agrarian Sales Cooperatives and Associations and Law 2836 on Agrarian Sales Cooperatives and the provisions on the Construction Cooperatives of Law 7116 are reserved. However, in case there is no clarity in the laws dictated above, the provisions of this law are applied. (13) Article-97: The cooperatives and cooperative associations established by Laws, no: 2834 and 2836 can organize in the form of central associations of cooperatives or can enter the Turkish National Cooperatives Association. (13) Law 2834 about the establishment of the Agrarian Sales Cooperatives and Associations has been taken out of force with Law 3186 dated 30.4.1985 which was published and announced in the Official Gazette 18748 dated 8.5.1985, except for Articles 8, 11, 13, and 21. Law 2836 about the establishment of the Agrarian Loan Cooperatives and Associations has been taken out of force with Law 1581 which was published and announced in the Official Gazette 14172 dated 28.4.1972. In addition, the Articles 4, 5, 6, 7, and 10 has been taken out of force with Law 3223 dated 7.6.1985 which was published and announced in the Official Gazette 18785 dated 15.6.1985 and two additional articles were appended to this Law. Law 7116 about the establishment and the duties of the Ministry of Development and Accommodation has been taken out of force with the Article 37 of the Decree in Power of Law 180 about the establishment and duties of the Ministry of Prosperity and Accommodation which was published and announced in the Official Gazette 18251/(repeated) dated 14.12.1983. F) REFERENCE TO THE PROVISIONS OF JOINT STOCK COMPANIES Article-98: In cases where there are no explanations on the contrary, the provisions concerning Joint Stock Companies in the Turkish Trade Law are applied. G) NATURE OF LAWSUITS AND THE METHOD OF TRIAL Article-99: The lawsuits arising from the particulars organized under this Law are deemed as commercial cases, regardless of whether or not the parties are merchants. Simple trial Methods are applied in such cases. H) ANNULLED PROVISIONS Article-100:Articles 458 – 502 constituting the sixth chapter of the Turkish Trade Law concerning the cooperatives are annulled. Related Ministry Appended Article 1- (appended with Article 26 of Law 3476) The names of the Ministries mentioned in this Law have been replaced with the term ‘Related Ministry’. The term ‘Related Ministry’ should be understood as the Ministry of Agriculture Forests and Rural Affairs for those cooperatives and their superior institutions with agrarian fields of activity, and the Ministry of Industry and Trade for the other cooperatives and their superior institutions. Penal responsibility Appended Article 2- (appended with Article 26 of Law 3476) 1- The members of the Board of Directors and the officials of the cooperatives or the superior institutions violating Item 3 of Article 8, Item 5 of Article 16, Items 4, 6, 7, and 8 of Article 59, and Item 5 of Article 90 are sentenced to imprisonment from 3 months up to 2 years and a heavy fine of 100.000 TL up to 1.000.000 TL, depending on the type and degree of the act. 2- The members of the Board of Directors who do not call the General Assembly for a meeting and the members of the Board of Directors of the cooperatives or the superior institutions violating Item 4 of Article 2, Item 1 of Article 16, Item 2 of Article 66, and Item 3 of Article 90 are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act. 3- The members of the board of auditors of the cooperatives or the superior institutions violating Item 2 of Article 56, and Articles 66 and 67 are sentenced to imprisonment from 1 up to 6 months and a heavy fine of 50.000 TL up to 500.000 TL, depending on the type and degree of the act. 4- The founders the cooperatives, the chairman and members of the Board of Directors violating the provisions stipulated by Article 92 , and in case this action takes place at a General Assembly meeting, the chairmen of the General Assembly meeting who have tolerated such action are sentenced to imprisonment from 3 months up to 1 year. The punishments binding freedom set forth in this Article cannot be converted into fines. The related Ministry can demand the right to intervene with the public lawsuits opened due to the crimes committed by the members of the Board of Directors and Auditors and the officials of the cooperatives and their superior institutions with respect to their duties. Temporary provision Temporary Article 1- (own numberless temporary article of Law 1163 dated 24/4/1969 (14) The cooperatives which are already established and are currently active are required to adjust their Rules according to the provisions of this Law within two years. The cooperatives that do not adhere to this condition are regarded to have dissolved. In case the persons in charge of liquidation by Law do not initiate liquidation within two months as of dissolving, the related Ministry or the Treasury can request for the assignment of a liquidation official from the court. Temporary Article 2- (temporary article introduced with Article 2 of Law 2475 dated 8/6/1981) (15) The provisions in the Rules of the construction cooperatives established before the publishing of this Law which take loans from Public Bodies, which conflict Article 52 of the Cooperatives Law 1163 as modified by this Law are assumed to have been amended according to the mentioned article, without the need for any other procedure. İ) TAKING EFFECT Article-101: This Law takes effect after three months following the date of its publication. (16) (14) It is the numberless temporary article of the Cooperatives Law 1163 dated 24.4.1969 modified by Law 1496, and it has been numbered by Law 3520 published in the Official Gazette 20076 dated 10.2.1989. (15) It is the temporary article put into force with Law 2475 dated 8.6.1981, again numbered by Law 3520 published in the Official Gazette 20076 dated 10.2.1989. (16) It is the executive article of Cooperatives Law 1163 dated 24.4.1969, and it has taken effect after three months as of its publication on the Official Gazette 13195 dated 10.5.1969 İ) COMPETENT AUTHORITY TO EXECUTE THE LAW Article-102: The Council of Ministers executes the provisions of this Law hereby. (17) THE PROVISIONS THAT WERE NOT INCLUDED IN LAW 1163 DATED 24/4/1969 1- Temporary Articles of Law 3476 dated 6/10/1988 Temporary Article 1-The cooperatives and their superior institutions the names of which do not comply with the stipulations of Article 1 are obliged to correct and register their names in accordance with this Law through the modification of the Rules, within six months. According to the Paragraph (2) of Item 1 of Article 56 which was amended by Article 14 of this Law, those who are members of more than one Board of Directors of cooperatives with similar fields of operation shall choose one of the said memberships and give others up within three months as of the date this Law takes effect. (19) Temporary Article 2- The superior institutions of cooperatives which have gained legal identity before the date this Law takes effect, are regarded to have been established in accordance with the provisions of this Law. Temporary Article 3- The cooperatives which are already established and are currently active are required to adjust their Rules according to the provisions of this Law within two years. The cooperatives that do not adhere to this condition are regarded to have dissolved. In case the persons in charge of liquidation by Law do not initiate liquidation within two months as of dissolving, the related Ministry or the Treasury can request for the assignment of a liquidation official from the court. The General Assemblies to be held by the cooperatives in order to adapt their Rules to this Law, meet and decide in accordance with the methods and majorities of ordinary General Assemblies. 2- Validity and Execution Provisions of Law 3476 dated 6/10/1988 Article-27: The provision of Item 2 of Paragraph (4) of Article 2 appended to this Law along with Article 26 shall take effect after six months as of the publication of this Law; the other provisions take effect as of publication. (20) Article-28: The provisions of this Law hereby are executed by the Council of Ministers. (17) It is the executive article of Cooperatives Law 1163 dated 24.4.1969. (19) The date Law 3476 took effect is 25.10.1988. (20) The date the provision of Item 2 of Paragraph (4) of Article 2 appended to this Law along with Article 26 took effect is 25.4.1989. The date the other provisions took effect is 25.10.1988. LIST SPECIFYING THE DATE OF TAKING EFFECT OF THE LEGISLATION APPENDED TO AND AMENDING LAW 1163 No. of Law Articles that take effect on a different date Date of taking effect 1496 (21) ---------- 10/08/1971 2475 (22) ---------- 10/06/1981 3381 (23) ---------- 25/06/1987 3476 (24) The provision of Item 2 of Paragraph (4) of Article 2 appended to Law 1163 along with Article 26 25/04/1989 3476 Other articles 25/10/1988 (21) Law 1496 dated 16.11.1971 which modified one article of Cooperatives Law 1163. (22) Law 3381 dated 8.6.1981 regarding the modification of Article 52 of Cooperatives Law and the addition of one temporary article to the said law. (23) Law 2475 dated 12.6.1987 regarding the modification of Items 2 and 3 of Article 19 of Cooperatives Law 1163. (24) Law 3476 dated 6.10.1988 regarding the modification of some articles of Cooperatives Law and the addition of two articles to the said law.
 
S.S. TÜM TÜKETİM KOOPERATİFLERİ MERKEZ BİRLİĞİ YÖNETİM KURULU’ NDAN, YENİ YIL MESAJI
İNSAN, YALNIZ YAŞAMASI ÇOK MÜMKÜN OLMAYAN SOSYAL BİR VARLIKTIR. DAİMA KENDİSİNDEN BAŞKA İNSANLARLA Y
Detay
19. OLAĞAN GENEL KURUL YAPILDI
S.S. Tüm Tüketim Kooperatifleri Merkez Birliğimiz’ n 19.( On dokuz ) Olağan Genel Kurulu, 22 Haziran 2013 Cumartesi günü
Detay
DEAR COOPERATİVE MEMBERS, DEAR FRİENDS,
The Central Committee for S.S. Tüm Tüketim Kooperatifleri has completed its preliminary work for Manager Training Semina
Detay
1163 KOOPERATİFLER KANUNU İNGİLİZCE
REPUBLIC OF TURKEY MINISTRY OF INDUSTRY AND TRADE General Directorate Of Organization LAWS ON COOPE
Detay
1163 KOOPERATİFLER KANUNU
KOOPERATİFLER KANUNU Kanun Numarası : 1163 Resmi Gazete Tarihi : 10.5.1969 Kabul Tarihi : 24.4.1969 Resmi Gazete Sayıs
Detay