In addition to principal capital and reserve funds, which consist of accumulated earnings, incorporated companies avail of loans to carry out their activities and achieve their goals. Such loans are based first on their net assets, and second on their foreign assets. The features of bonds stem partly from judicial definition. According to Article 420 of the Commercial Code, "[b]ills which incorporated companies present to find loans in such a manner that their fictive values are equal and their quittances are the same are called bonds". By referring this definition and adding to it in some areas, the concept of bonds can be established. Incorporated companies can issue bonds to private legal entities. This opportunity is not available to real persons. However, private laws give some public legal entities the right to issue bonds (eg, government and municipal bonds).Provisions relating to bonds are set out in the following pieces of legislation:
l notices of the Capital Markets Board;
l the Commercial Code;
l the Capital Markets Law; and
l the SII 13 Notice of the Capital Markets Law, "Registration of Bonds in Commission Inscription".
Under Turkish law, it is possible to issue bonds through the registration of foreign currency. With such bonds, the role of the accounting key is given to selected foreign currency. This is carried out by showing the fictive values of the bonds in the foreign currency and buying the bonds at this or a higher value; but when the bonds are redeemed, the value is paid in Turkish lira (worked out against the value of the foreign currency on the date of redemption).
Bonds settled in foreign currency may be bought against the foreign currency and redeemed with foreign currency; however, such bonds fall under the Law on the Protection of the Value of Turkish Currency. Decision 32 issued under this law was settled not in accordance with the bonds, but rather according to the values set out in Article 15(1) of the law.
A gold value clause can be stipulated in the bonds. In such cases gold has the role of the accounting key (in the same way as for foreign currency).
The Commercial Code specifies that bonds have fictive value, but does not set lower and upper limits for this value. This allows the incorporated company the freedom to choose a fictive value when seeking to obtain credit through bonds.
