Double Signature Rule

REPRESENTATION OF THE COMPANY IN JOINT STOCK COMPANIES

If the board of directors consists of two or more members, the representation of the joint stock company is subject to the double signature rule as a rule. Article 370 of the TCC states that “Unless otherwise provided for in the articles of association or if the board of directors does not consist of a single person, the authority to represent belongs to the board of directors to be used with double signatures.” As can be seen, although the TCC regulates the double signature rule, it does not clearly regulate who will have the double signature authority. Therefore, unless it is clearly stated in the articles of association or there is a decision by the board of directors in this direction, any two of the board members have the authority to sign, regardless of the requirement of the chairman or vice chairman of the board. For this reason, in cases where regulations different from the double signature rule are made, such regulations must be registered and announced in accordance with Article 373 of the TCC in order to be claimed against third parties. Otherwise, it is not possible to claim this situation against bona fide third parties.

In addition, in cases where the double signature rule is valid, unauthorized representation comes to the fore in cases where transactions are made with a single signature. If the company gives implicit or explicit approval to these transactions later, the transaction will bind the company, otherwise the liability of the unauthorized representative will arise.

REPRESENTATION OF THE COMPANY IN LIMITED COMPANIES

When we look at the issue of representation in limited companies; In limited companies with more than one manager, as a general rule, the authority to represent is used with double signatures. However, in limited companies with more than one manager, it is also possible to stipulate that the authority to represent will be used with a single signature with a provision to be included in the company agreement, i.e. to adopt the single signature system.

Although the legal regulation is in this way, when we look at the practice, it is seen that in some limited companies with more than one manager, and therefore accepted to have a board of directors, individual (single) signature authority is given to each of the managers, even though there is no provision in the company agreement. It is thought that this issue, which constitutes a violation of the legal regulation, has escaped the attention of some trade registry directorates. However, in requests for registration of single-signature representation authority, the contract of the limited company should be examined and it should be investigated whether there is a clear provision in the company contract regarding the adoption of the single-signature system in representation, and if there is no such provision, the registration and announcement request should be rejected by the trade registry directorate. Therefore, it is essential to clearly determine in the company contract how many signatures the limited company will be represented with. In limited companies with more than one manager, if the single-signature system is also intended to be used, in this case, the company contract should be amended and a clear provision should be included in this regard.