47 COMMERCIAL LAW instance, in the event that the right to veto or the increased quorums are not duly incorporated to the articles of association, it will not be possible to claim the invalidity of a resolution, and only sanctions such as compensation or a penalty clause may be stipulated, provided that they are included in the shareholders’ agreement. One of the most important issues to benefit from the company law sanctions is the limitation of share transfer. Beyond the legal restriction stipulated by the TCC, a contractual restriction – which is frequently preferred in family businesses – should be carefully established. The reason for this is that the remedy of breaching the contractual restriction is the deprivation of the buyer from certain shareholders’ rights, including administrative rights. The importance of the articles of association is especially seen for share transfers, as it is not only binding on current shareholders but also on future shareholders. Since the shareholders’ agreement cannot be brought forward against the shareholders who are not party to the agreement, it only appears as a binding instrument inter partes. In the practice of company law, the veto right may be stipulated by increasing the quorum, and such an arrangement is considered as a method that is permitted under Article 340 of the TCC. However, creating privileges that are not expressly classified in the Law, such as the right of veto or making optional additional arrangements in the privilege of voting right or profit share, might trigger controversies under Article 340 of the TCC. The share transfer limitation, which is another important issue that is usually addressed in shareholders’ agreements, is regulated under TCCArticle 492 ff., and in practice, the transfer limitation is usually reflected in the articles of association, to the broadest extent that Article 340 of the TCC allows. Conclusion The family constitution and the shareholders’ agreement, which are frequently created in family businesses, are important legal instruments that ensure generational transition and institutionalism in family companies. The provisions of these documents aim to prevent disputes among family members regarding the business as much as possible, and to ensure that company activities are interrupted to the least pos-
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