The Holding Concept

The growth of commercial activities in the developing and changing world order and the awareness of the advantages of large-scale enterprises have brought up the importance of company structures. The concept of Holding, which emerged with the adoption of this understanding; it can be expressed as structures that form the financial union of different companies and establish a union of interests between the companies.

Although there is no clear definition of the concept of holding in our Turkish Trade Law No. 6102, which is in force; In paragraph 4 of Article 519 of the Law, “… holding companies whose main purpose consists of joining other enterprises.” With this article of law, the holdings; however, it is possible to say that it can be established by participating in other enterprises, that it can carry out industrial and commercial activities by means of joining different companies, that only shares belonging to other companies can be held, that the subject of activity is a subsidiary of the enterprises, that they cannot trade directly.

Holding companies have a pyramid-shaped structure in terms of internal structure and the highest point of this pyramid is the holding structure. This pyramid consists of companies that are decreasing in terms of authority and capital subsidiaries. Holdings can join the capital companies operating in all kinds of subjects as co-founders and become partners by purchasing shares of those established or established. In the holding system, companies have legal personality and independence. The holding companies on top of these companies; is entitled to control and manage stocks.

A group of companies was organized in TTK 195 and its continuation articles. Although holdings do not correspond to the company communities in terms of their organizational characteristics, the concept of holding can find an asset in terms of company communities. According to paragraph 4 of article 195 of the TTK, the company community; the parent company constitutes the partnership of the baby company and, if any, the enterprises at the top. The concepts of dominant companies and subsidiaries continue to dominate the conglomerate. Holding companies do not need to establish dominance over any company. The companies within the holding have their own legal entities and independence. Holding; integrity can be characterized as the control mechanism on which the companies it constitutes. Although the concepts of holding with the company community do not quite coincide with the concept of holding, holding companies; in the presence of the group of companies, it may be bound by the provisions of responsibility related to the dominant company.

Holdings consist of companies that provide participation to each other. Therefore, the group can also be characterized as a company. They can provide services to subsidiaries by holding companies in research and development, financing, marketing and distribution, preparation of investment projects, determination of targets, planning, organizing and implementation of decisions, computer services, public relations regulation, personnel procurement and training, accounting organization and control, legal consultancy.

The concept of holding is “The communiqué on the Raising of the Capital of Joint Stock and Limited Companies to New Minimum Amounts and the Determination of Joint Stock Companies Subject to Establishment and Fundamental Contract Change Permits and the communiqué published in the official gazette dated 15/02/2012 no. 28468. According to this communiqué, holding companies; one or more companies will be given the opportunity to manage and control and can be defined as an organization under the umbrella of the Joint Stock Company. The main purpose of holdings is to take advantage of the large organization created by multiple enterprises. This structure retains the management of existing companies within its structure.

Although holdings are a Joint Stock Company as a type of activity, they differ in terms of organization and actual contract changes. The second point at which it is separated from the joint stock companies is; legal reserves. Compulsory statory reserves in holding companies that may have a presence in the form of participation; reserves. In addition, the provisions of the joint stock company are based.

What are the Foundation Principles of Holdings?

In order to talk about the concept of holding; Initiatives with different legal statuses should come together, these initiatives should be directed towards a specific economic purpose and management should be done from a central administration.

The founding principles of the holding company are regulated by Article 5 of the Communiqué on the Raising of the Capital of The Companies ofAnonim and Limited to the New Minimum Amounts and the Determination of Joint Stock Companies Subject to The Establishment and The Amendment of the Articles of Association. According to Article 5 of this communiqué, the establishment of holding companies and the main contract changes are subject to the permission of the Ministry of Commerce.

In the continuation of the communiqué; In order for holding companies to be established, it is stated that it is mandatory to obtain permission from the General Directorate together with the appropriate opinion or permission letter for the companies whose founding signatures are approved by the notary and whose organization requires the appropriate opinion or permission of other official institutions.

In order to amend the articles of associations, in accordance with paragraph 2 of Article 5 of the Communiqué issued on 15/02/2012; The notarized example of the board decision regarding the amendment of the articles of association, the new text of the changing article/articles of the articles of association, the amendment of the articles of association for companies requiring the appropriate opinion or permission of other official institutions, and the appropriate opinion or permission letter should be obtained by applying to the General Directorate.

LegalIties of Holdings

In Article 5 of the Company, where the principles of the establishment of the holdings are regulated, it is stated that the holdings can be established as joint stock companies. The Turkish Commercial Code does not include an regulation on the order and operation of holding companies. Holding companies; Since they can be established as a joint stock company, the provisions related to the joint stock company can be applied indirectly in terms of holding concepts. The points where holding companies are separated; establishment principles, purpose-subject concepts and legal reserves. In addition, the provisions of the joint stock company shall be the main quality for the Holdings. Therefore, it can be said that the holdings are indirectly subject to the regulations contained in the Turkish Commercial Code.

Purposes and Benefits of Holdings

The most important purpose of holding companies is to manage these companies under a single management and financial organization by having the majority of the company’s capital.

In the current market, where competition is high, conglomerate provides conveniences in many areas. The first of these conveniences and benefits is; is the effective management of the group of companies by professional persons. Companies have greater investment forces by effectively providing profit and loss balances under the holding structure. One of the benefits is that the profits made by the companies remain among the companies under the umbrella of the holding.

It can be counted as one of the benefits of the concept of holding in the international dimension brought by the corporate order. Companies under the umbrella of holding; specialization is provided by increasing their competitiveness in domestic and international markets. In addition, in terms of tax liabilities, conveniences are provided to companies in the community.

To summarize; a holding company can be expressed as the participation of a joint stock company by granting management and control powers to one or more companies. Holdings are organized within large organizations in the competitive environment of multiple enterprises and take over the management of the companies within them. Each of the companies under the umbrella of the holding has separate legal entities and does not mean a corporate community. In some cases, holding companies may be bound by the provisions of responsibility for the dominant company at the top of the conglomerate in the event of the conditions for the company to find assets.