85 CAPITAL MARKETS LAW prospectuses of corporations, the ratio of non-commercial receivables from related parties, to the total sum of all receivables, may not exceed twenty percent, or their ratio to net assets may not exceed ten percent. In addition, the Communiqué on Shares obliges4 the authorized institutions that intermediate the sale that is to be undertaken, based on the total price of the shares to be offered to the public. According to Article 6 (Public Offering of Existing Shares of Shareholders of Non-public Corporations) of the Communiqué on Shares, the shares to be offered to the public must be free from any encumbrance. In other words, there should be no pledges on the shares or any record that restricts the transfer, circulation, or prevents the shareholder from exercising their rights. Public Offering Process Firstly, taking into account the structure of the company, whether a public offering is suitable with the company should be considered by in-house project teams and by the intermediary institution. There are many factors that need to be evaluated at this stage. For example, it would be advantageous to be a well-known company, the effect of local and foreign investors on the relevant sector should be analyzed and, especially, the share prices of similar companies traded in the BIST are examined. If the company decides to offer its shares to the public, the first thing to do is to amend the company’s articles of association. The articles of association of the company to be offered to the public must be in line with the capital markets legislation. As per Article 6 of the Communiqué on Shares, the articles of association amended in line with the legislation must be submitted to the CMB, together with the documents listed in Annex 1 (Documents Requested to Amend the Articles of Association for Initial Public Offering) of the Communiqué on Shares. Upon the approval of the CMB, 4 That is to say, if the market value of the shares is below twenty million Turkish Liras, the intermediary institution is obliged to purchase all of the unsold shares. For shares with a market value of between twenty million and forty million Turkish Liras, this liability is given for the whole portion up to twenty million and half of the excess portion.
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