Newsletter-21

63 COMMERCIAL LAW approval, or if the refusal is not justified, it is deemed to have approved the transfer. On the other hand, if the company does not grant approval of the transfer of the share based on the provisions of the articles of as- sociation, the company may be sued for the cancellation of the refusal and for registeration of the shareholder in the company’s share ledger. Upon the transfer of registered shares in closed companies, ownership of the shares, and all rights related to the shares, stay with the trans- feror unless it is registered with the share ledger; therefore, there is no doubt that the transferor is entitled to sue the company. This being said, it is also accepted that the transferee can also bring such claims against the company since the transferee has interest in the transfer of the share. In the event of such a dispute, the validity of share transfer restric- tions under the articles of association shall be evaluated by the judge and, if considered invalid, the court shall resolve for the approval of the share transfer and for the registration of the same in the share ledger. It is argued that the acceptance of the case, i.e. determination of the unjustness of the refusal, is retroactive. The transferee becomes the shareholder as of the date of its request for approval of the share transfer. If there has been distribution of profits in the interim period, the transferee may, as well, request the compensation of his losses from the company. Conclusion Whether or not share transfer restrictions specified under the articles of association of joint stock companies can be deemed as an “important reason”, and therefore, can justify the refusal of the share transfer should be evaluated case by case, in terms of each reason, the company, and the composition of the environment of the shareholders. Provisions of the articles of association listed as important reasons that relate to the composition of the environment of the shareholders constitute an important reason only when they justify the refusal of the request for approval in terms of the field of business of the company, or for the economic independence of the entreprise. In light of this, each reason must be clearly linked to the field of business of the com- pany, or to the economic independence of the entreprise.