4 NEWSLETTER 2021 is necessary and sufficient for purchase of a share certificate. There is no provision in the TCC concerning the promissory transaction for share purchase. On the other hand, in practice, the consideration of share purchase is primarily about the transfer and purchase of an economic whole that the partnership provides, instead of dividends. Hence, besides the act of disposal that is explained above, execution of the promissory transaction will also be necessary. This promissory transaction is commonly encountered as a share purchase agreement. The promissory transaction is the first step towards the act of disposal, and the act of disposal is the transaction that fulfils the obligation formed by the promissory transaction.2 It is not possible for the transferee to acquire the ownership of the share certificate solely with the promissory transaction, as the transferor undertakes the obligation to transfer ownership of the shares to the transferee by the promissory transaction.3 For the share purchase transaction to be valid, an execution act of disposal is necessary. Representations and Warranties Representations and warranties that are the subject of this article are encountered during the promissory transaction, i.e. during the share purchase agreement phase. Even though share purchase agreements evolve around shares, the rationale of such agreements is mostly about acquisition of the activities, assets, portfolio and/or the economic value of the company that the share represents. Thus, the qualifications of company activities, assets and other economic values as well as the qualifications of the share is significant for the transferee.4 As the provisions of the Law of Obligations related to sales contracts are not sufficient for share purchase agreements that consist of the transfer of economic values, assets, and company activities togeth2 Sevi, Ali Murat: Anonim Ortaklıkta Payın Devri, Seçkin Yayıncılık 2012, p. 151. 3 Sevi, p. 152. 4 Sevinç Atılganer, Melisa: “Liability from Representations and Warranties under Share Purchase Agreements”, Erdem&Erdem Newsletter, December 2019, http:// www.erdem-erdem.av.tr/en/insights/liability-from-representations-and-warranties-under-share-purchase-agreements (Access date: 26.10.2021).
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