Civil Liabilities of BOD members in Turkey
Civil liabilities of board members is governed by Turkish Commercial Code. In Turkey, BOD members of companies can be held civilly liable for their actions or omissions that result in harm to the company, its shareholders, or third parties. BOD mermbers’ liabilities in Turkey primarily stem from breaches of their fiduciary duties and other legal obligations. Here are some key aspects of BOD members’ liabilities in Turkey:
Breach of Fiduciary Duty
BOD members owe fiduciary duties to the company and its shareholders, including the duties of care, loyalty, and good faith. Breaching these duties by acting negligently, recklessly, or in bad faith can result in liability.
Negligence
BOD members may be held civilly liable for damages resulting from their negligent actions or failure to exercise due care in the performance of their duties. For example, if a member fails to adequately oversee the company’s operations or make informed decisions, resulting in financial harm, they may be liable for the resulting losses.
Mismanagement
BOD members can be held liable for damages caused by mismanagement of the company’s affairs. This may include decisions that lead to financial losses, failure to comply with legal and regulatory requirements, or improper allocation of company resources.
Breach of Contract
BOD members may be liable for breaching contractual obligations they have entered into on behalf of the company. For example, if a member fails to fulfill their duties under a contract with a third party, resulting in financial harm to the company, they may be held liable for breach of contract.
Shareholder Actions
Shareholders of the company have the right to bring civil lawsuits against BOD members for breaches of fiduciary duty or other wrongful acts. If shareholders can demonstrate that a member’s actions or decisions caused harm to the company or its shareholders, they may seek compensation through civil litigation.
Derivative Actions
In certain cases, shareholders may bring derivative actions on behalf of the company to recover damages caused by BOD members’ misconduct or breaches of duty. These actions allow shareholders to hold BOD members accountable for actions that harm the company as a whole.
Remedies
In civil litigation, remedies for breaches of fiduciary duty or other wrongful acts by BOD members may include monetary damages, injunctive relief, or other equitable remedies designed to compensate the injured parties and prevent future harm.
Civil liabilities of board members in Turkey should be taken into consideration when doing business in Turkey. BOD members are liable for their actions or omissions that result in harm to the company or its stakeholders. It’s essential for BOD members to understand their legal duties and obligations and to act in accordance with applicable laws and regulations to minimize the risk of liability. Seeking legal advice and guidance can help BOD members navigate potential liabilities and fulfill their responsibilities effectively. Contact us!
