Liabilities of the Shareholders upon Change of Company Kind

Liabilities of the Shareholders upon Change of Company Kind

company

Although there is no debtor change in the type change, under certain circumstances it is possible that the rights of the creditors are adversely affected in spite of the type change. For example, if a collective company in which partners are unlimitedly liable for partnership debt is converted into a joint stock company, its shareholders’ rights regarding this liability are lost.

The same shall apply if a cooperative company, whose members are personally liable for their debts, becomes a joint stock company. For this reason, as in the case of merger and division, Article 158 of the TCC has to be applied. According to this article, the liabilities of the partners responsible for the debts of the partnership before the change of type continue after the change of type.

However, these debts must have been born before the announcement of the type change or the reasons leading to the debts must have occurred before this date. Requests relating to the personal liability of the shareholders arising from the debts of the partnership are subject to a period of 3 years from the date of the announcement of the type change decision. If the receivable becomes due after the date of the announcement, the time-limit period starts from the date of the due date.