The liability of the company director determines for which decisions the person managing the limited company can personally pay compensation and when he can be pursued in terms of public debts. Directorate is not just a technical title that gives signing authority. Manager; It is a body responsible for establishing the daily management of the company, overseeing the financial structure, implementing the general assembly decisions and protecting the company’s interests. However, not every debt of the company automatically becomes the personal debt of the director. Conclusion; It varies depending on the type of debt, the duty violated, the fault, the damage and the period of directorship.
This guide focuses on limited company managers. Although the responsibilities of joint stock company board members are based on similar concepts, the distribution of duties and body structure are different. In evaluating the concrete case, the company contract, trade registry records, representation method and decision dates should be examined together.
When does the responsibility of the company manager arise?
In accordance with the Turkish Commercial Code No. 6102, the management and representation of the limited company is regulated by the company agreement. Directorship may be granted to one partner, more than one partner or a third party; However, at least one partner must have management and representation authority. Managers have the authority to make decisions on management issues that are not left to the general assembly and to implement these decisions.
The fundamental question in terms of legal liability is not whether the commercial decision subsequently resulted in damage. The fact that an investment does not provide the expected return does not alone make the manager responsible. In the general framework, the following elements should be evaluated together:
- Violation of an obligation arising from the law or the company agreement,
- Fault in the form of intent or negligence attributable to the manager,
- The company, partner or creditor suffers a concrete loss,
- There is an appropriate causal link between the violation and the damage.
The provisions of the Turkish Commercial Code No. 6102 regarding managerial liability also apply to limited company managers. For this reason, the court is not satisfied with a general claim that “the company suffered a loss”; It investigates which transaction violates which obligation, how the damage is calculated, and its connection with the director’s behavior.
What are the duties that the manager cannot delegate?
Tasks such as accounting, sales or human resources in the company can be left to professionals. However, the transfer of duties does not end all the responsibility of the manager. The main duties of the manager include the senior management of the company, establishment of the management organization, establishment of the necessary accounting and financial planning order, supervision of authorized persons, preparation of financial statements, calling the general assembly to the meeting and execution of its decisions.
It is an inalienable duty to report the situation to the court, especially when there are signs that the company is in debt. Cash shortage is not the same as being in debt; However, signs such as loss of capital, persistent insolvency and negative equity do not delay professional financial review.
The general assembly’s approval of a transaction does not protect the manager in all cases. The law clearly states that the approval of the general assembly does not automatically remove the director’s responsibility. For this reason, the “partners knew” defense cannot be considered a definitive guarantee without examining the nature of the breach of duty and the decision process.
How to enforce diligence, loyalty and non-competition?
The manager must carry out his duties with due care and protect the interests of the company in accordance with the rule of honesty. Transferring a company opportunity to oneself or a relative, using company assets for personal purposes, providing benefits to a related company contrary to market conditions, or concealing a significant conflict of interest may lead to a liability claim.
Unless otherwise stated in the company contract or if other partners do not have the necessary permission, the manager cannot engage in activities that compete with the company. In the dispute subject to the decision E.2023/5683, K.2024/6907 of the 11th Civil Chamber of the Supreme Court of Appeals, it was claimed that the company’s assets were transferred to another company and the prohibition of competition was violated. In the decision, it was highlighted that in a liability case, the actual damage should also be determined with concrete evidence, in addition to the claim. In other words, although the suspicious transaction is important, damage calculation and causality must be established for compensation.
Is the company debt the director’s personal debt?
As a rule, a limited company is responsible for its own assets and debts. The title of director does not mean automatic surety in private law debts. For example, the rent, supply or loan debt that the company cannot pay cannot be claimed from the personal assets of the director for this reason alone.
However, if the director has also given a personal guarantee, signed the bill of exchange in his own name, or committed a direct tort against the creditor, a different personal liability may arise. Exceeding the limits of representation authority when performing a transaction on behalf of the company or leaving the company’s title and representative capacity unclear may also create a dispute. Before signing, the parties to the contract, the form of representation and personal guarantees, if any, must be clearly separated.
How is the liability of the company director determined in public debts?
Taxes and other public receivables are subject to different rules than private law debts. Tax Procedure Law No. 213 stipulates that the tax duties of the legal entity are fulfilled by the legal representative. Taxes and related receivables that cannot be collected completely or partially from the company due to failure to fulfill these duties can be collected from the assets of the representative who does not fulfill his duties, if the conditions are met.
Law No. 6183 on the Collection Procedure of Public Receivables deals with the limited company partner and the legal representative on different grounds. The partner can be pursued for public receivables that cannot be collected from the company in proportion to his capital share. The manager, in his capacity as legal representative, may face personal prosecution within the framework of his duty of representation in the relevant period and the conditions of failure to collect the public debt from the company. If the same person is both partner and manager, the legal basis of the two titles should be examined separately.
An important procedural guarantee is seen in the decision E.2025/1330, K.2025/2932 of the 3rd Chamber of the Council of State: Before going to the legal representative, whether the public receivable has been duly finalized for the company and the notification process must be checked. Inaccuracy in the notifications required to be made to the company may affect the legality of the payment order issued on behalf of the manager. For this reason, the only examination against the payment order is “Was I a manager at that time?” It should not be limited to the question.
Who can file a lawsuit and who gets compensated?
The company may request compensation for the direct damage it has suffered from the manager. Each partner can also file a liability lawsuit based on company damage; However, in this case, he demands that the compensation be paid to the company, not himself. If the partner’s personal right has been directly violated, personal damage is also assessed. The right of claim of the company’s creditors may vary depending on conditions such as direct loss, solvency of the company and bankruptcy.
This distinction directly affects the outcome of the petition. The decrease in the partner’s share value due to a decrease in the company’s assets is often an indirect loss. Establishing the claim as payment to the wrong person may lead to a legitimate claim getting stuck in a procedural or adversarial dispute.In the field of commercial and corporate lawIn the evaluation, the type of damage and the status of the plaintiff should be determined together.
What documents are required in a liability file?
In a well-prepared file, the claim is matched with the accounting records and the decision process. The main documents are:
- Company agreement and amendments,
- Manager appointment and dismissal decisions and trade registry announcements,
- Records showing representation and signature authority,
- General assembly and board of directors decisions,
- Journal, general ledger, inventory records and financial statements,
- Bank transactions, invoices, contracts and related party transactions,
- Correspondence, notices and information requests,
- Tax notices, payment orders and notification documents on behalf of the company.
It is important to preserve legal books, electronic records and email correspondence before documents are lost. In most cases, the court resorts to expert examination, which requires knowledge of financial consultancy and corporate law. In order for the expert to make an auditable calculation, the transaction, date, counterparty, amount and damage item must be shown instead of the claim that “the company was mismanaged”.
When does the statute of limitations start?
According to the Turkish Commercial Code No. 6102, the claim for compensation can be made within two years from the date the plaintiff learned about the damage and the person responsible; In any case, it must be claimed within five years from the act that caused the damage. If the act also constitutes a crime and a longer statute of limitations applies in criminal law, this longer period may also affect the claim for compensation.
Learning history is often controversial. Seeing a balance sheet, receiving an expert report, accessing a bank record or revealing a hidden transaction may create different dates. Waiting for the end of the period; It creates risks such as loss of evidence, change of company records and failure to meet the need for precautionary measures.
How long does the case take and how is the cost calculated?
Duration; It depends on the workload of the court, the number of parties, the scope of the commercial books, objections to the expert report and the appeal-appeal stages. Files requiring intensive accounting review take longer than disputes where only a single contract is interpreted. Narrowing down the disputed transactions in the preliminary examination and submitting the documents regularly may reduce the time.
Cost items are fees, expense advances, notifications, expert fees and legal representation expenses calculated according to the amount of the request. Since tariffs and fees change periodically, it would be misleading to give a fixed figure without seeing the file. Before filing a lawsuit, the estimated loss, possibility of collection, the director’s assets and the cost of evidence should be evaluated together.
What can managers do to reduce risk?
The liability of the company director can be managed to a significant extent by a regular system of corporate registration. It is helpful for managers to adopt these practices:
- Putting the distribution of authority and signature system in writing,
- To record the commercial justification of important decisions and the data used,
- Disclosing the conflict of interest in advance and obtaining the necessary approval,
- Documenting comparable prices and conditions in related party transactions,
- To regularly follow up taxes, social security and other public payments,
- Obtaining expert opinion and up-to-date interim balance sheets on signs of financial deterioration,
- When the task is completed, to transfer the ledger, password, bank access and documents with minutes.
Resignation alone does not erase past responsibilities. Registration and announcement of the decision to leave the directorate in the trade registry, delivery of representation tools and completion of relevant institution notifications will reduce the disputes in the future.
As a result, the responsibility of the company manager is not based on the title; It is determined based on concrete duty, duty period, fault, damage and causality. Keeping regular records protects the company and enables the manager to demonstrate that he or she has acted reasonably and diligently.
Frequently Asked Questions
Is the manager responsible for all debts of the limited company?
No. As a rule, the company is responsible for its private law debts with its own assets. An additional basis is required for the director’s personal liability, such as breach of duty, personal guarantee, direct unlawful conduct or legal conditions specific to public claims.
Can a company director who is not a partner be held responsible?
Yes. It is not mandatory for the director to be a partner, and the director who is not a partner is also responsible for his duties as a company body. On the other hand, the public debt liability arising from the partnership share and the legal representative liability arising from the directorate are separate from each other.
Does the approval of the general assembly remove the responsibility of the manager?
Does not always remove. General assembly approval alone does not provide full protection, especially in non-delegable duties or illegal transactions. The scope of the approval, the accuracy of the information given to the partners and the compliance of the transaction with the mandatory provisions are examined.
Can a person who resigns from the directorship be pursued for his old tax debts?
Leaving a position does not automatically close the past period. The period to which the debt is relevant, the date on which the tax duty must be fulfilled, the condition of collection from the company and registration records are examined together. If a payment order is notified, an evaluation must be made on a document basis without missing the lawsuit deadline.
Can the partner claim the company’s losses on his own account?
Although a partner can file a lawsuit for direct damage to the company, he/she wants the compensation to be paid to the company. In order for the partner to claim payment for himself, he must have a personal and direct loss.
This content provides general information about Turkish law; It is not a substitute for legal advice. A lawyer should be consulted to evaluate the concrete case based on contracts, registry records, term of office and financial documents.
