A Founding Shareholder Without Power of Representation Cannot Be Held Liable for Social Security Debts

Afyonkarahisar 1st Labour Court, 29.04.2025, E. 2024/280, K. 2025/199

Years earlier the claimant had appeared as a founding shareholder of a joint stock company merely as a formality; he was neither an authorised signatory nor a manager. But one morning a message arrived from the bank saying “an e-attachment has been applied to your account”, and a salary attachment letter reached his workplace.

In the file in which I acted as counsel the court made the following finding; being a founding shareholder does not by itself create a debt. A shareholder who has no power to represent and bind the company and holds no senior management position cannot be held liable for a public debt under Laws No. 5510 and 6183.

The company may not have paid its debt to the Social Security Institution; but a former shareholder who does not even want to hear the company’s name is not obliged to carry that debt for life. Attachment proceedings cannot be conducted irregularly and arbitrarily; treating a shareholder without power of representation as the debtor is incompatible with the rule of law.