NEWSLETTER-2020-metin

50 NEWSLETTER 2020 In this Newsletter, the limitations under provisional Article 13 of the TCC and the exceptions regulated under the Communiqué are addressed, and the procedures and principles of benefiting from such exceptions are explained. Limitations Regarding Dividend Distribution Pursuant to provisional Article 13 of the TCC, except for the companies of which more than fifty percent of the share capital is di- rectly or indirectly owned by the state, special provincial administra- tion, municipality, village or other public legal entities, as well as the funds of which more than fifty percent of the share capital is owned by the state, the following limitations shall apply until 30 September 2020 regarding the distribution of dividends of capital companies. The President is authorized to extend and/or shorten this period by three months. • It can be resolved on the distribution of only up to 25% of the annual net profit for the year 2019. • Previous years’ profits and free legal reserves cannot be made subject to distribution. • General assembly cannot authorize the board of directors to distribute advance dividends. • If the general assembly had previously decided to distribute dividends for the year 2019, but the shareholders have not yet been partially or completely paid, payments for the porti- on exceeding 25% of the annual net profit for the year 2019 shall be postponed until 30 September 2020. According to the wording of the Article, not only the payments exceeding 25% are restricted until 30 September 2020, but it is also not possible for the general assembly to take a decision on this matter until the specified date. It should be mentioned that there is a significant difference be- tween the provisions of the TCC and the Communiqué regarding free legal reserves. Provisional Article 13 of the TCC regulates that if the general assembly decided to distribute dividends for the year 2019