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The Ministry of Commerce suspended some provisions of the Companies Law, and granted the commerce minister the necessary powers in this regard.
According to the ministry, some exceptions from those provisions are as follows:
1) The period during which companies must hold their general assembly meetings was extended to the next 12 months following the fiscal year end.
2) The period required for submitting a copy of the company’s auditor’s report, financial statements, business activity, financial position, the proposed dividend and the supervisory board report, if any, to the ministry and every shareholder was extended to 12 months following the end of the fiscal year.
3) The abovementioned clauses shall no longer be effective from Dec. 31.
4) Shareholders in limited partnerships, which include over 20 shareholders, are allowed to vote separately, given that the company’s manager shall send a registered letter including the proposed decisions for vote, for a period of one year as of Nov. 2, 2020 with exception from Article 168/A of the Companies Law.
5) With exception from Article 181 of the Companies Law, the period during which the director of a limited partnership shall invite for a general assembly meeting, is extended to become (180) days of the date on which the board of directors become aware that losses account for 50% of capital, for two years as of March 25, 2020.
6) Article 181/3 of Companies Law shall be suspended for two years as of March 25, 2020. A limited partnership should continuously disclose updates about its losses, when they reach the percentage mentioned in Article 181/1 of the same law, as per the following regulations:
- A director(s) or the board of directors, upon being aware that losses account for 50% of capital, shall apply to the ministry to disclose this news on the ministry’s website, including losses, their percentage of capital and the main reasons behind these losses.
- A director(s) or the board of directors shall submit a quarterly report of losses to the ministry within 15 days of the end of every quarter and shall apply to the ministry to disclose this news on its website.
- A director(s) or the board of directors – upon being aware that losses shrink to below 50% of capital – shall apply to the ministry to disclose this news on the ministry’s website, including the measures taken to adjust the company’s status.
7) Clause 6 shall no longer be effective starting from March 3, 2022.
8) With exception from Article 150 of the Companies Law:
1. The period during which the board of directors must invite the extraordinary general assembly once the board of directors became aware of the losses of the joint-stock company reaching half of its paid-up capital, shall be extended to 60 days, from the date the board of directors become aware of the losses, for a period of two years starting from March 25, 2020.
2. The period during which the extraordinary general assembly meeting must be held shall be extended to 180 days from the date the board of directors become aware of the losses for a period of two years starting from March 25, 2020.
9) Article 150/2 of the Companies Law shall be suspended for a period of two years starting from March 25, 2020, and the joint-stock companies shall upon reaching the amount specified in Article 150/A continuously disclose updates on the losses in accordance with the regulatory rules.
- A board chairman, upon being aware that losses account for 50% of capital, shall apply to the ministry to disclose this news on the ministry’s website, including losses, their percentage of capital and the main reasons behind these losses.
- A board chairman shall submit a quarterly report of losses to the ministry within 15 days after the end of every quarter and shall apply to the ministry to disclose this news on its website.
- A board chairman – upon being aware that losses shrink to less than 50% of capital – shall apply to the ministry to disclose this news on the ministry’s website, including the measures taken by the company to adjust its status.
10) Clause 9 shall no longer be effective from March 3, 2022.
11) With exception from Article 133/1 and Article 166 of the same law, joint-stock companies are permitted to re-appoint an auditor whose term of appointment has reached five continuous years, for two additional years maximum, as long as the total period of his appointment does not exceed seven continuous years for the audit office, and five continuous years for the partner who supervises the audit process, provided that this exception ends after two years as of March 25, 2020.
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