SSS · Transaction Advisory

What happens if my partner fails to fulfil their obligations?

A well-drafted shareholders’ agreement deals with a partner’s default before it happens, and provides graduated consequences rather than one blunt instrument.The usual mechanisms are a peri…

Updated · July 20261 min readCategory · Transaction Advisory
Short answer

A well-drafted shareholders’ agreement deals with a partner’s default before it happens, and provides graduated consequences rather than one blunt instrument.The usual mechanisms are a period in which to cure the breach; a penalty clause under the Turkish Code of Obligations (No. 6098); temporary restriction of voting and management rights; set-off against…

A well-drafted shareholders’ agreement deals with a partner’s default before it happens, and provides graduated consequences rather than one blunt instrument.

The usual mechanisms are a period in which to cure the breach; a penalty clause under the Turkish Code of Obligations (No. 6098); temporary restriction of voting and management rights; set-off against dividends; a call option letting the other partner take over the defaulting partner’s shares; and, as a last resort, provisions for exit or expulsion. Built in from the start they turn a breach into a predictable contractual outcome instead of a long and uncertain lawsuit — and where speed matters they can be backed by interim protection such as an injunction. We draft the agreement with the breach scenarios and their remedies made concrete, not left to be argued about afterwards.

Shall we apply this matter to your situation?

Tell us your specific situation in a few sentences; we'll assess it with the right team.

Get in touch
This content is for general information only and does not constitute legal advice. Please contact our team for an assessment of your specific circumstances.

Related questions

Different regimes apply to Turkish companies with foreign capital and to foreign legal entities; the permit processes vary according to the field of activity, the region, and military-security restrictions. We determine the acquisition route suited to your structure and conduct…

As a rule yes, but most relationships continue without interruption. In a merger, a demerger or a change of legal form, assets, rights and obligations pass to the new structure largely by universal succession under the Turkish Commercial Code (No. 6102). For employment contracts…

For most steps, no. The greater part of the incorporation, tax and banking work can be done without you travelling, on a power of attorney issued at a consulate or executed abroad, apostilled under the Hague Convention and translated into Turkish. The Foreign Direct Investment L…

Transaction Advisory

The right start means a predictable process.

From the first meeting to completion of the work; let's plan every step transparently.