The Capital Markets Law(1) and the Communiqué on Share Buy-backs(2) allow public companies to

  • buy back their own shares;
  • accept their own shares as pledge; and
  • sell out or pay the consideration of the shares that are bought back.

The communiqué also regulates circumstances in which:

  • a company purchases an affiliate's shares;
  • a third party purchases a company's shares in its name, but on behalf of the company or one of its affiliates; or
  • a third party accepts a company's shares as pledge in its name, but on the company's behalf.

Overview of procedure

Public companies can buy back their own shares in accordance with the communiqué. If a public company plans to buy back its shares, the board of directors must prepare a share buy-back programme and submit it to the general assembly for approval. The share buy-back transaction must be approved by the general assembly. The general assembly must also authorise the board of directors to perform the transaction.

The communiqué does not set out a special quorum for approval of the programme. Unless a higher quorum is required in a company's articles of association, the general assembly must:

  • convene with shareholders representing at least 25% of the share capital present; and
  • adopt the resolution with the affirmative votes of shareholders that represent the majority of the votes present.

For publicly listed companies, if a share buy-back is required for a company to avoid an immediate and material loss, the board of directors can initiate the buy-back process without obtaining the general assembly's approval. This exception does not apply to unlisted companies.

Share buy-back programme

The programme may apply to at most 10% of a company's issued or paid-up share capital and must also include information regarding:

  • the purpose of the share buy-back;
  • the term of the programme, if any;
  • the maximum number of shares to be purchased;
  • the minimum and maximum purchase prices;
  • the purchase principles of buy-back shares, if specified;
  • the resources and total amount of the fund for buy-back;
  • the number of purchased shares in accordance with any previous share buy-back programme;
  • the number of shares which are yet to be disposed of and the results of any previous share buy-back programme;
  • the possible effects of the programme on the company's financial status and activity results;
  • any affiliates which may buy back shares in accordance with the programme;
  • the maximum, minimum and weighted average price of shares in the preceding year and the preceding three months; and
  • any benefit of the transaction to related parties.

For unlisted public companies, the programme must also contain the following information instead of the fourth and tenth points above:

  • a summary of the valuation report;
  • the minimum and maximum purchase prices with a 10% margin; and
  • the minimum and maximum price of the shares in the last year and in the last three months if they were subject to any sale and purchase transactions.

The purchase price must be determined based on the valuation report to be prepared as per the Capital Markets Board regulations and must be paid in cash.

The programme's duration can be a maximum of three years for listed public companies and one year for non-listed public companies. This period may be extended to five years if the programme applies to the employees of a public company or its affiliates.

The board of directors must disclose the programme to the public, pursuant to the public disclosure requirements of the Capital Markets Law, and publish it on the company's website at least three weeks prior to the general assembly meeting.


Once a company completes the buy-back of its shares, it will not be entitled to exercise any of the rights attached thereto, except dividend and pre-emptive rights. Accordingly, these shares will not be taken into account in the calculation of the general assembly meeting quorum.

For further information on this topic please contact Damla Dogancali or Sezil Durmus at Kolcuoglu Demirkan by telephone (+90 212 355 9900) or email ( or The Kolcuoglu Demirkan website can be accessed at


(1) Law 6362, published in the Official Gazette on December 30 2012.

(2) Published in the Official Gazette on January 3 2014.

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