Limited companies are one of the most common types of companies under the Turkish Commercial Code (TCC) and are often preferred by family businesses or small and medium-sized enterprises. The right of partners to be informed about the company’s operations, financial status, and management, and to inspect it in certain circumstances, is crucial for both the sound conduct of partnership relations and the protection of the company’s interests. For limited company partners operating in Antalya, these rights form the basis for transparent management and a partnership structure based on trust. This article will examine in detail the legal basis, scope, and limits of partners’ right to access and inspect information in limited companies, and how to exercise these rights.
Legal Nature and Basis of the Right to Information and Review in Limited Companies
The partners’ right to obtain and review information serves as a monitoring mechanism against company management. This right, in accordance with Article 610 of the Turkish Commercial Code, applies to limited companies in a similar manner to the provisions governing joint-stock companies (specifically Articles 411 and 412 of the Turkish Commercial Code). This means that partners in limited companies, like shareholders in joint-stock companies, have the right to obtain information about the company and, under certain conditions, to conduct investigations.
The primary purpose of this right is to ensure that partners have access to accurate and up-to-date information about the company’s activities, providing them with an understanding of its financial condition, management decisions, and general direction. This allows partners to protect their rights, identify situations that are contrary to the company’s interests, and pursue legal action when deemed necessary. The right to information and review is an indispensable right that forms the foundation of a partnership and cannot be eliminated or limited by the company’s articles of association. This quality clearly demonstrates the importance of this right and the security it provides for partners.
Scope and Limits of the Right to Information
Partners’ rights to information and review can be divided into two main categories: the general right to information and the right to justified review. Each right has its own scope and limits.
General Right to Information
Limited company partners’ general right to information includes the right to request and review the company’s financial statements, board reports, and general assembly minutes, without justification. This right can be exercised specifically at the annual general assembly meeting, or even outside of it. Partners can access basic information about the company’s financial condition, profit and loss statement, assets, and liabilities through this method. This right is designed to ensure company transparency and ensure that partners are regularly informed about overall company performance. Documents within this scope are generally made available for review by partners at the company’s headquarters or at general assembly meetings.
Right to Review and Just Cause Condition
The right to review, which is broader than the general right to information, allows for a detailed examination of the company’s books, documents, and all business records. However, this right requires “just cause.” Just cause refers to concrete and reasonable suspicions that the company is being mismanaged, that irregularities have occurred, that the rights of shareholders have been violated, or that the company’s financial condition is at serious risk. For example, situations such as the company’s persistent losses, unusual transactions, or conflicts of interest among board members may constitute just cause.
The right to inspect without just cause is possible only if there is a specific provision in the company’s articles of association or with the approval of all partners. However, beyond these exceptional circumstances, the Turkish Commercial Code strictly mandates just cause for detailed access to books and documents.
Limits of Right: Trade Secrets and Company Interests
Partners’ right to access and review information is not absolute; it is exercised within certain limits. Chief among these limits are the company’s trade secrets and its interests. Company management reserves the right to withhold information that, if disclosed, could undermine the company’s competitiveness, damage its commercial reputation, or negatively impact its relationships with third parties. For example, details of a new product development project, specific customer lists, or strategic business plans may qualify as trade secrets.
However, partners’ right to obtain and review information cannot be arbitrarily denied under the guise of company trade secrets or interests. Whether information is a trade secret or would harm the company’s interests must be evaluated based on objective criteria. Partners who obtain this information also have a “confidentiality obligation” to prevent it from being leaked outside the company or to use it against the company’s interests. Violation of this obligation can result in civil and criminal liability.
How and Process to Use the Right
It is important for limited company partners to follow a specific process when exercising their right to obtain and review information, in order to effectively protect their rights.
First, any request for information or documentation must be submitted in writing to the company’s governing body (director or board of directors). This written request must clearly state the nature of the request, the requested documents, and, if a right of inspection is being requested, the justified reason. A written request will facilitate proof in the event of any future disputes. For companies operating in Antalya, this application must be submitted to the company’s headquarters.
The company’s management is obligated to fully comply with a partner’s request for information within a reasonable timeframe. While this timeframe generally varies depending on the nature of the request, prompt action and good faith are expected. The manner in which the information is presented is also important; it should be presented in a format that allows partners to understand and review the information. If necessary, partners may request to be accompanied by an expert (e.g., a financial advisor or lawyer).
Obstruction of the Right to Information and Review and Legal Sanctions
If the company management unfairly denies or obstructs the partners’ right to obtain and review legal information, the partners have the right to take legal action.
Rejection of Request for Information
Partners may file an “information and examination lawsuit” if their requests for information are unfairly rejected, incomplete information is provided, or the information provided is untrue. This lawsuit is filed in the commercial court where the company’s headquarters are located (Antalya Commercial Courts in Antalya). The court, after assessing the existence of a just cause and the scope of the request, may order the company to provide the relevant information and documents to the partner. During the litigation process, the court may, if deemed necessary, commission an expert examination to determine the situation.
Request for Appointment of a Special Auditor
In more serious cases, namely, when there are serious and concrete doubts about the company’s management or financial condition, the partners can request the general assembly to appoint a special auditor. If the general assembly rejects this request, the partners can apply to the commercial court in the location of the company’s headquarters and request the appointment of a special auditor. The special auditor will examine specific transactions or accounts of the company and prepare a report, which will then be submitted to the court. This report can reveal important information about the company’s management and may allow the partners to take proactive steps to protect their rights. The appointment of a special auditor is generally a last resort, used when there are strong indications of mismanagement.
The Importance of Trust and Transparency Between Partners
In limited companies, partners’ right to access and review information is not only a legal obligation but also a critical element that underpins the trust between partners and the company’s healthy growth. Companies that adopt a transparent management approach minimize potential disputes between partners, allowing the company to operate more harmoniously and efficiently. Effectively exercising these rights allows partners to protect not only their own interests but also the company’s overall interests.
For limited companies operating in Antalya, it’s crucial that partners understand their rights to access and review information and, when necessary, exercise these rights through proper legal processes. These rights increase the accountability of company management and help partners make more informed decisions about the company’s future. Therefore, in the event of any hesitation or dispute, seeking the support of a qualified commercial lawyer is crucial for managing the process effectively and preventing loss of rights.