a)
Division agreement and division
plan
(i) General
The management bodies participating in the division draw up a division agreement if a company transfers parts of its assets to existing companies through division. If a company transfers parts of its assets through division to the newly incorporated companies, the company's management draws up a division plan.
The division agreement and division plan must be drawn up in written form and must be approved by the general assembly.
(ii) Content of division agreement and division plan
The division agreement and division plan should include the following:
- Trade names, head quarters and forms of companies participating in the division,
- Division of assets and liabilities and allocation of them; the details of inventories, negotiable instruments tangible and intangible assets,
- Equalization amount, if stipulated, and exchange ratios of company shares; the declarations of the partners of the transferor company regarding their partnership rights in the transferee company,
- Rights that are assigned to the profit sharing certificates holders, non-voting shares and special rights by the transferee company,
- The method of share exchange,
- Date of which company shares will have the right to the profit and the features of this right for making a claim,
- Date of which the transferor company's transactions are assumed to be performed for the account of the transferee company,
- Benefits granted to members of the management organs, managers, persons who have the management rights and auditors,
- The list of business affairs which have passed to the transferee company as a result of the division.
b)
Assets excluded from division
Assets which have not been transferred in the division agreement or in the division plan will be:
- Owned by all transferee companies in co-ownership in the case of a total division in accordance with the rate of net assets transferred to all transferee companies in conformity with the division contract or plan,
- Left to the transferor company in the case of a partial division.
The aforementioned provision is applied to receivables and intangible asset rights in a similar way.
Companies participating in the total division are severally liable regarding debts which have not been transferred to any company according to the division contract or division plan.
c)
Division report
The management bodies of companies participating in the division prepare a separate report with respect to the division. A report that is prepared jointly is also valid. In this report the following points are explained taking into account the legal and economic aspects as well as the reasons:
- Purpose and results of the division,
- Division agreement or division plan,
- Equalization amount to be paid, if stipulated, and exchange ratios of company shares; declarations of the transferor company's partners with regard to their rights in the transferee company,
- Elements of shares valuation with respect to the determination of exchange ratio,
- If necessary, additional payment liabilities, other personal performance liabilities and unlimited liability that may result from the division for partners,
- In cases where the types of companies participating in division are different, liabilities of partners due to the new type,
- Impacts of the division on the employees of companies participating in the division and details of a social plan, if any,
- Impact of the division on the creditors of the companies participating in the division.
If a new company is formed, the articles of association of the new company should also be attached to the division plan.
Small and medium sized companies may not draw up a division report in case of approvals of all partners.
d)
Right to inspect
Each of the companies participating in the division presents the following documents two months before the general assembly resolution to partners participating in the division for inspection purposes at the head office, and in the case of public companies at locations determined by the Capital Markets Board:
- Division agreement or division plan,
- Division report,
- Year-end financial statements, annual reports for the last three years and interim balance sheets, if any.
Partners may request copies of these documents and hard copies from the companies participating in the division if available. These documents are provided free of charge.
Each of the companies participating in a division refers to the inspection right in the announcement that is published in the Turkish Trade Registry Gazette and the web sites.
Small and medium sized companies may not exercise the inspection right in case of approvals of all partners.
e)
Information regarding changes
in assets
Provisions related to the significant changes in the assets and liabilities of companies participating in the merger are applied to the companies participating in the division in a similar way.
