Director Liability Under Turkish Commercial Code in 2026

Understanding director liability under the Turkish Commercial Code (TCC) is no longer just a task for legal departments—it is a survival skill for every board member and manager operating in the Turkish market.

As Türkiye continues to align its corporate framework with international governance standards, director liability under the Turkish Commercial Code (“TCC”) remains a critical issue for board members, shareholders, and foreign investors alike.

In 2026, directors of Turkish companies face heightened scrutiny, broader duties, and more sophisticated enforcement mechanisms. Understanding the scope and consequences of director liability is therefore essential for sustainable corporate management.

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At Finlexia Turkish Accounting Firm, we have been advising domestic and international clients on Turkish company law, compliance, and governance matters since 2017. Our corporate lawyers team provides a detailed and practical overview of director liability under the TCC, tailored to today’s regulatory and commercial realities.

Since 2017, Finlexia Turkish Accounting Firm has stood at the forefront of the Turkish legal landscape, guiding international and domestic clients through the complexities of company formation and the evolving demands of corporate governance.

As we move into 2026, the regulatory environment in Turkey continues to demand higher standards of transparency and accountability from those at the helm of Joint Stock Companies (JSC) and Limited Liability Companies (LLC).

1. The Foundation of Liability: Article 553 of the TCC

The cornerstone of director liability in Turkey is Article 553 of the Turkish Commercial Code No. 6102. Under this provision, members of the board of directors, managers, and even liquidators are held liable for damages caused to the company, its shareholders, and its creditors if they breach their statutory or contractual obligations through their fault.

In the context of company liquidation, this liability remains particularly acute, as liquidators must ensure all creditor rights are satisfied before the distribution of assets. Failure to adhere to the strict procedural steps can lead to personal financial exposure long after the company has ceased its operations.

2. The “Prudent Manager” Standard

Turkish law does not expect directors to be infallible, but it does expect them to be diligent. According to Article 369, directors must perform their duties with the “care of a prudent manager” and act in the best interests of the company in good faith.

What defines a Prudent Manager in 2026?

• Informed Decision Making: Utilizing reasonable, scientific, and concrete data before casting a vote.
• Loyalty: Prioritizing the company’s success over personal gain or the interests of third parties.
• Compliance: Ensuring the company adheres to the latest 2026 updates, such as the mandatory transition to electronic statutory books for newly established entities.

3. Differentiated Joint and Several Liability

One of the most significant modernizations in the TCC is the move away from “absolute” joint liability. Under the principle of differentiated joint liability (Article 557), if multiple directors are responsible for the same damage, they are not all automatically liable for the total amount. Instead, the court determines the liability of each member based on:

1. Their individual degree of fault.
2. The causal link between their specific action (or inaction) and the damage.

This ensures that a director who acted with due care—perhaps by dissenting from a risky board resolution—is not unfairly burdened by the negligence of their peers.

4. Non-Transferable Duties and the Risk of Delegation

The TCC identifies certain “non-transferable” duties that the board of directors cannot delegate to subordinates. These include:

• High-level management and issuance of instructions.
• Determination of the company’s organizational structure.
• Supervision of persons in managerial positions.
• Notification of the court in cases of insolvency (technical bankruptcy).

While the board can delegate many operational tasks via an internal directive, the duty to supervise remains. As specialists in contract drafting, our firm frequently assists boards in creating robust internal directives that clearly define these boundaries, effectively limiting the liability of directors for the actions of appointed managers, provided the “due care in selection and supervision” was exercised.

5. Liability for Public Debts and Tax Obligations

Perhaps the most “dangerous” area for directors in Turkey is liability for public debts. Under the Law on Collection of Public Receivables, directors can be held personally liable for the company’s unpaid taxes and social security premiums if they cannot be collected from the company itself.

Unlike general civil liability, this is often a stricter form of responsibility. Even if you resign, you may still be held accountable for the tax periods during which you held office. This makes proactive corporate litigation strategies and regular tax audits essential for anyone holding a signature authority in a Turkish entity.

6. Avoiding Conflicts of Interest and Prohibited Transactions

The TCC strictly regulates interactions between a director and the company to prevent “self-dealing.”

• Article 393: Directors are prohibited from participating in board discussions where their personal interests (or those of close relatives) conflict with the company’s.
• Article 395: Directors cannot enter into transactions with the company without prior authorization from the General Assembly.
• Article 396: The “Non-Compete” clause prevents directors from engaging in commercial activities that fall within the company’s scope of business without explicit permission.

Breaching these articles is a fast track to personal liability lawsuits filed by shareholders.

7. Statute of Limitations for Liability Claims

In Turkey, the clock starts ticking the moment the damage and the responsible person are identified.

• Short Term: 2 years from the date of discovery.
• Long Term: 5 years from the date the act occurred.

However, if the act also constitutes a crime under the Turkish Penal Code—such as embezzlement or fraud—the longer criminal statute of limitations will apply. For companies involved in mergers and acquisitions, a thorough due diligence process is required to uncover any latent liability risks that may still be within these statutory windows.

Strategic Protection for 2026 and Beyond

To navigate the complexities of Turkish law, directors should adopt a “Compliance-First” mindset. This involves:

1. Recording Dissents: Always ensure your “No” vote and the reasons for it are recorded in the board resolution book.
2. Professional Advice: Seek legal opinions on major transactions to demonstrate the “Prudent Manager” standard.
3. D&O Insurance: While not mandatory, Directors and Officers (D&O) insurance is becoming a standard best practice in Istanbul’s corporate circles.

Contact us for Director Liability Regulations

At Finlexia Turkish Accounting Firm, we combine over three years of experience with a forward-looking approach to Turkish law. Whether you are navigating a complex shareholder dispute or setting up a new governance framework, our multi-language team is ready to protect your interests.

Contact us today to schedule a consultation with our expert attorneys and ensure your board is fully compliant with the Turkish Commercial Code in 2026.