With the articles of Association and the Shareholders Agreement, shareholders are able to decide upon which rules are going to apply in the event of the shares of the company being sold to other shareholders or third parties as well as granting the shareholders several rights and alternatives in this sense. Certain limitations and constraints concerning the transfer of the company’s shares may be imposed with the aim of preserving the infrastructure of the Joint Stock Company as well as the transactions of the partnership. This article will discuss the Turkish translations of certain rights the shareholder possesses that are often encountered in practice which derive from the contract.
The priority the shareholder possesses in contrast to other shareholders, in terms of possessing the option of purchasing all or part of the shares for a price that has been decided upon in advance, is referred to as a “call option”. The Turkish translation of this term that is used in practice is “alım hakkı”.
A "put option" emerges when a shareholder who wishes to sell their shares is given the right to sell them to other shareholders for a price that has been decided upon beforehand, and other shareholders are obliged to buy the shares at the same price. The Turkish translation of this term that is used in practice is “satım hakkı”.
The right to "tag-along," which permits other shareholders who wish to partake in the sale transaction to sell their shares on the same conditions as the shareholder who desires to sell his or her shares to third parties, is one of the alternatives that can be recognised for shareholders in joint stock corporations. The Turkish translations of this right have different meanings. The translations of the “tag-along right” is often referred to as the “katılma hakkı”, “ortak satış hakkı”, “bağlama hakkı” or “birlikte satma hakkı”.
A "drag-along" right is defined as allotting a shareholder who wishes to sell his or her shares to third parties, the right to compel other shareholders to sell their shares on the same conditions.
The Turkish translation of a “drag-along right” that is used in practice can be translated in different ways such as the “birlikte satışa zorlama hakkı”, the “satışa katılma hakkı” or the “satışa sürükleme hakkı”.
Though all the aforementioned varying usages of the terms in Turkish are correct, we maintain that the translations that most accurately correspond to the definition of “tag-along” and “drag-along” are accordingly, the concepts “birlikte satma hakkı” and “birlikte satışa zorlama hakkı”.
All other English-Turkish translation examples can be found in our blog posts here.