Liability of Foreign Managers in Turkish Limited Companies: TCC Articles 626, 629, 644 and 553

1. A foreign manager accepts a Turkish statutory role

A Turkish limited company can appoint a foreign person as manager subject to corporate and immigration/work-authorisation rules. Once appointed, that person acts through an office created by the Turkish Commercial Code.

The manager cannot rely on foreign nationality or residence abroad to replace the mandatory Turkish-law duties of management and representation.

Appointment, acceptance, signature authority and registration should be completed accurately so the scope and start date of responsibility are clear.

2. Article 626 requires due care in managing the company

The manager must approach decisions with the care expected from a competent person managing company affairs. This requires adequate information, financial awareness and attention to legal obligations.

Care does not mean that every business project must succeed. A commercially reasonable decision can fail without creating liability if the process was informed, loyal and lawful.

Minutes and management files should show what information and alternatives were considered.

3. Company interests cannot be subordinated automatically to the foreign owner

A wholly foreign-owned Turkish Ltd remains a separate Turkish legal entity. Managers owe duties to the company, not simply to the parent company or shareholder who nominated them.

A parent request to transfer cash, assets, customers or opportunities should therefore be tested against Turkish company interest, tax rules and capital-maintenance requirements.

Group policy is not a defence to an unlawful act.

4. Managers are subject to the statutory non-compete framework

Article 626 includes a competition restriction for managers, subject to the company agreement and consent rules. A manager should disclose other businesses operating in the same field.

Foreign group roles can create apparent overlap where the manager sits in several affiliated entities. The group relationship should be documented and necessary consents obtained.

Using confidential customer or pricing information for another business can create additional liability.

5. Representation authority must match the trade-registry record

Articles 623 and 629 regulate management and representation. A company can have one or several managers and can define joint-signature arrangements within the statutory limits.

Internal restrictions not capable of effect against good-faith third parties should not be mistaken for public representation limits.

High-value contracts should be signed in accordance with the registered representation rule.

6. Multiple managers create collective decision and supervision questions

Where there are several managers, one is appointed chair and decisions are taken according to the statutory/company rules. Each manager’s actual participation can affect fault and causation.

A manager who was absent, dissented or was lawfully excluded from a function can have a different liability position from the person who controlled the decision.

Meeting records should therefore identify votes and dissent.

7. Operational delegation does not eliminate statutory management responsibility

Managers can allocate functions internally, but the company still needs proper organisation, reporting and supervision.

A foreign manager residing abroad should ensure that local finance, tax, employment and compliance issues reach management in time.

Ignoring repeated warnings because “local staff handle it” can be relevant in a liability claim.

8. A shareholder instruction can be commercially relevant but legally insufficient

Managers may receive direct instructions from a sole foreign shareholder. The instruction should be implemented only if it complies with Turkish law and the manager’s duties.

Where the instruction creates a conflict or harms the company, the manager should obtain advice, record the issue and refuse unlawful execution.

Written shareholder instructions do not automatically shift statutory liability away from management.

9. Payments to shareholders require legal basis

Dividends, shareholder-loan repayments, expense reimbursements and related-party service payments have different corporate and tax bases.

Managers should not transfer company cash merely because the shareholder asks for it. The payment must be supported by distributable profit, a real debt, a genuine service or another lawful obligation.

Unlawful distributions can expose both recipient and management.

10. Accounting responsibility cannot be outsourced completely

Professional accountants prepare books and returns, but management remains responsible for organising lawful company administration.

Managers should review cash balances, related-party accounts, overdue taxes, payroll, capital position and material contingencies.

False or unsupported records can become evidence in both civil and criminal/tax proceedings.

11. Financial distress requires timely management response

Managers should monitor whether the company’s capital is lost, liabilities exceed assets or the company cannot pay debts when due. Turkish company and insolvency laws can require specific actions.

Continuing to incur liabilities while ignoring clear insolvency indicators can worsen damage and liability.

Independent financial assessment should be obtained when the company’s position is uncertain.

12. Article 553 supplies the fault-based damages framework

Through Article 644 and related references, limited-company managers can be liable for culpable breach of statutory or articles-based obligations causing damage.

The claimant must identify duty, breach, fault, damage and causal connection. Manager status alone does not make a person automatically liable for every company debt.

Actual responsibility and delegated functions matter.

13. Creditors can have statutory claims in defined circumstances

Where the company suffers loss and cannot satisfy debts, creditors can have standing under the corporate-liability framework in circumstances provided by law.

The creditor should distinguish a direct personal loss from damage belonging primarily to the company.

Insolvency can change how claims are pursued.

14. Tax and social-security public debts use separate liability statutes

Manager liability under the Commercial Code should not be confused with public-debt liability under Law No. 6183 or tax procedural rules.

A manager can face public-debt exposure even where a private creditor could not pierce company liability, depending on statutory representation and collection conditions.

The next guide treats that issue separately so the two liability regimes are not mixed.

15. Resignation must be made effective and registered

A foreign manager who stops acting should submit a legally effective resignation and ensure company/trade-registry records are updated.

Simply leaving Türkiye or ceasing email communication does not necessarily prove when the corporate office ended.

Past-period liability remains subject to the relevant rules after resignation.

16. Release can affect company claims but is not universal immunity

General assembly decisions concerning release can be relevant to claims based on disclosed activities. The scope depends on the facts, information available and statutory claimant rights.

Unknown or concealed conduct cannot safely be assumed covered by a generic annual release.

Tax/public-debt liabilities are also separate from private corporate release.

17. D&O coverage should name the Turkish company and foreign manager

Group insurance can cover managers in subsidiaries, but territorial and entity schedules should be checked. Defence costs, exclusions and notification deadlines can be decisive.

Insurance does not authorise unlawful conduct.

Bakırcı & Keskin Hukuk Bürosu has physical offices in Istanbul and Mersin. Corporate disputes throughout Türkiye can be coordinated from these offices subject to competent courts and procedures.

Conclusion

A foreign manager of a Turkish limited company has substantive Turkish-law duties. Article 626 requires care and loyalty, Article 629 governs representation, and the liability provisions applied through Article 644 can create personal damages exposure where a culpable breach causes loss.