NEWSLETTER-2017

53 COMMERCIAL LAW subsidiaries and one parent company, as provided for under Art. 105 of the Trade Registry Regulation, published in the Official Gazette dated 27 January 2013, and dated 28541, and (ii) such parent company should have exerted dominance over the subsidiaries by means of ma- jority in share capital, majority in voting or majority in the number of board members. Therefore, group of companies is not a type of a joint stock company 9 . However, if these two conditions are fulfilled, a holding company as a parent company and two subsidiaries under its dominance would be able to constitute a group of companies. If a holding company also constitutes a part of a group of compa- nies, special provisions applied to the group of companies would also affect the holding company, which qualifies as the parent company. At this point, it is required to consider the circumstances, wherein espe- cially the parent company might be liable. Unlawful Use of Dominance and Its Consequences The practice of dominance of a parent company over the subsid- iaries is not illegal on its own. Art. 202 of the TCC regulates two dif- ferent circumstances of unlawfulness as a consequence of actions of the board of directors, and as a result of significant resolutions of the general assembly. These give rise to liability of the parent company. The first category under Art. 202/1 of the TCC includes certain operations and actions within the authority of the board of directors, and which may constitute violation of the care obligation of the board of directors and cause loss to the subsidiary. In accordance therewith, a parent company cannot use its domi- nance in a way that would cause loss of the subsidiaries. In this in- stance, the concept of loss includes both the loss and exposing to risk the company’s assets and profitability. Some operations and decisions that may result in such damage under Art. 202/1 of the TCC have been listed, inconclusively, and it has been accepted that if the damages of the subsidiary, arising out of such actions, is not recovered in that year, or if those cases where a right of demand, corresponding to the 9 Pulaşlı, Hasan, Şirketler Hukuku Şerhi, V. I, Ankara, 2011, p. 276.