Registered Share Certificate Transfer: Endorsement, Delivery, and Share Ledger Process
Transfer of registered share certificates is regulated by Turkish Commercial Code. We explain every step, including endorsement, delivery, board resolution, and share ledger registration. Here is our up-to-date 2025 guide!
Legal Procedures to Follow in Transfering Registered Stock Certificates
In its simplest form, a transfer refers to the process of a shareholder in a joint-stock company transferring their registered stock certificates to another individual. However, this process is not limited to endorsement and delivery alone. The provisions of the company’s articles of association and corporate records are also of critical importance.
As a professional Registered Stock Certificate Consultant, we have summarized all steps of this process in a clear and comprehensible manner for you.
Endorsement and Delivery of the Stock Certificates
Pursuant to Article 490 of the Turkish Commercial Code (TCC), registered stock certificates can be transferred through endorsement and delivery to the transferee.
⚠️ However, for a valid transfer, the following three conditions must be met simultaneously:
• A declaration of assignment or full endorsement
• Physical delivery of the certificate to the transferee
• No contradiction with the company’s articles of association
Failure to meet any of these conditions renders the transfer invalid.
Compliance with Special Provisions in the Articles of Association
The company’s articles of association may include restrictive provisions such as pre-emption rights or approval requirements for transfer to certain persons. In such cases, endorsement and delivery alone are not sufficient.
➡️ Example: If the articles state that “transfers to non-shareholders are subject to approval,” the transferee must obtain prior approval from the company before becoming a shareholder.
Obtaining a Board Resolution
If there is no specific provision in the articles of association, a board resolution is not mandatory under the TCC. However, we recommend obtaining a board resolution in all cases due to the following reasons:
• Ensures the accuracy of corporate records
• Facilitates proof in the event of disputes
• Enhances corporate transparency
Registration of the Transfer in the Share Ledger
Transfering registered stock certificates only becomes effective against the company once it is registered in the share ledger.
Information Required for Share Ledger Entry:
• Full name or trade name of the shareholder
• Contact information
• Nominal value of the share
• Share series
• Date of acquisition and registration
• Holders of usufruct rights (if any)
• Whether the share has been materialized into a certificate
• Remarks on the transfer
Each shareholder must be recorded on a separate page. A new page should also be opened for the transferee.
Share Transfers Require Legal Discipline
Transferring a registered stock certificate is more than a simple delivery process. It must comply with legal requirements, the company’s articles of association, and registration formalities. Otherwise, the transfer may be deemed invalid or not recognized in the company’s records, which can lead to serious complications.
Frequently Asked Questions
How is a registered stock certificate transferred?
It is endorsed, delivered to the transferee, and recorded in the share ledger. The company’s articles of association and any special provisions must be considered.
Can a share be transferred without a board resolution?
If there is no provision stating otherwise in the articles of association, a board resolution is not mandatory under the TCC. However, it is generally recommended in practice.
What happens if the transfer is not recorded in the share ledger?
The share transfer is not effective against the company, and the new shareholder will not be recognized by the company.
Transfer of registered share certificates must be conducted carefully. For more detailed information to benefit from our consultancy services, feel free to contact us. With over 25 years of expertise and experience, we are here to support you. You may also explore the publications of our founder, Dr. Soner Altaş, in the field of Commercial Law, or take a closer look at Tacirsoft Legal Information System, Turkey’s first and only specialized database on Company Law and Organized Industrial Zones Law.
