Joint Stock Company and Case Study

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A joint stock company is a company whose capital is predetermined and divided into shares and whose liability for its debts is limited to its assets. The shareholders are only liable to the company up to the amount of their respective capital contributions.

Case Study

Two friends plan to open a bakery in a mall and rent a small shop. After a while they cannot get along and the conflict reflects to the business: they fail to pay the rent. The mall (X AŞ, a joint stock company) claims the total payment from one of the friends. Can X AŞ claim the payment only from one of the friends ? What will be the interest rate X should ask for and why?

After such a qualification, there are some results. First of them is the presumption of solidarity. According to TCC art. 7, when two or more people jointly contract a debt towards another person in connection with a transaction which has a commercial character for only one or all of them, they are considered as being jointly liable, in the absence of any agreement to the contrary in the contract. In case of joint liability, the creditor may demand full or partial performance of the debt either from all or only one of the debtors, depending on his choice. Therefore, yes X AŞ can claim the payment only from one of the friends. But do not forget, X AŞ can claim the payment both of friends also.

The second result of being qualified as a commercial transaction is about the interest rate. The rate of interest may be fixed freely in commercial transactions. And creditor may demand default interest on short-term advances rate.  It is because we qualified the transaction between parties as commercial. 

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