New Annulment Decision By The Constitutional Court Regarding The Regime For Expulsion Of Shareholders In Two-Shareholder Limited Liability Companies

Recent Development

The decision of the Constitutional Court of the Republic of Türkiye (“Constitutional Court” or “Court”) file No. 2025/128, decision No. 2025/273 (“Decision”) was published in the Official Gazette dated 17 March 2026. The Constitutional Court ruled that subparagraph (h) of the first paragraph of Article 616 of the Turkish Commercial Code No. 6102 (“TCC”) and the phrase “applying to the court for the expulsion of a shareholder from the company for just cause…” set out in subparagraph (h) of the first paragraph of Article 621 were unconstitutional and annulled them solely with respect to two-shareholder limited liability companies.

The Application for Annulment

The application for annulment was made by the Bakırköy 1st Commercial Court of First Instance (“Applicant Court”) in a case involving a request for the expulsion of a shareholder from a limited liability company.

Prior to the annulment decision, under the TCC, a general assembly resolution was required before applying to the court for the expulsion of a shareholder from the company for just cause. In addition, in order for such resolution to be adopted, at least two-thirds of the represented votes and the absolute majority of the entire share capital carrying voting rights had to be secured together. Accordingly, an expulsion action could not be filed directly by a shareholder; the application to the court on behalf of the company was subject to a general assembly resolution.

This framework effectively blocked the route of shareholder expulsion, particularly in two-shareholder limited liability companies. The 11th Civil Chamber of the Court of Cassation also had settled case law accepting that an expulsion action could not be filed in two-shareholder companies. The Applicant Court argued that, since the required general assembly majority could not be obtained, one shareholder was not allowed in practice to apply to the court for the expulsion of the other shareholder, and that this situation was incompatible with constitutional guarantees.

What does the Decision Say?

The Constitutional Court limited its review specifically to two-shareholder limited liability companies. The Court stated that the dispute before it concerned a request for the expulsion of a shareholder in a two-shareholder limited liability company and conducted its constitutional review within that scope.

According to the Constitutional Court, although the legislator had envisaged a mechanism for expulsion for just cause in limited liability companies, the contested rules prevented that mechanism from operating effectively in two-shareholder limited liability companies. Therefore, in situations where the continuation of the company’s activities became difficult or the continuation of the shareholding relationship became intolerable, the expulsion mechanism, which is intended to resolve the dispute without terminating the company’s legal existence, became dysfunctional.

The Court emphasized that limited liability companies are enterprises established for economic purposes and that the mechanism of shareholder expulsion serves to ensure the continuation of the company’s activities without terminating its legal existence. For this reason, the Constitutional Court concluded that excluding two-shareholder limited liability companies from the scope of this mechanism was incompatible with the right to an effective remedy under Article 40 of the Constitution, in connection with the freedom of enterprise safeguarded under Article 48 of the Constitution.

The Constitutional Court also stated that the possibility of filing an action for dissolution for just cause under Article 636/3 of the TCC did not remedy this problem. According to the Court, this route does not guarantee the direct expulsion of the other shareholder; on the contrary, it may also result in the expulsion of the shareholder requesting dissolution or in another appropriate solution.

Conclusion

The Constitutional Court annulled, by majority vote (with 6 dissenting votes), the relevant provisions set out in subparagraph (h) of the first paragraph of Article 616 of the TCC and subparagraph (h) of the first paragraph of Article 621 solely with respect to two-shareholder limited liability companies. The requests for stay of execution were rejected. In addition, no postponement was envisaged regarding the entry into force of the annulment provision. Therefore, the Decision entered into force upon its publication in the Official Gazette dated 17 March 2026.

The Decision is particularly important in disputes where the shareholding relationship is deadlocked and no general assembly resolution can be adopted in two-shareholder limited liability companies. In this respect, the Decision draws attention to making the mechanism of expulsion for just cause accessible in two-shareholder limited liability companies and to reassessing the remedies that may be pursued before resorting to the dissolution of the company.

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