LEASING. Leasing, Factoring and Financing Companies Law Adopted in Turkish Grand National Assembly; The Draft Law, which has been long awaited to be enacted, was adopted in the plenary session of the Turkish Grand National Assembly (TGNA) dated 11/ 12 /2012. .
2. Sale and leaseback:
Sale and leaseback transactions will be allowed. Companies with working capital necessity will be able to liquidate their balance sheets by selling the building and machinery in their assets to the leasing company and collecting the sales revenue from the leasing company in cash, channeling the funds created as such to their own businesses. Such companies will be able to make the repayments to leasing companies in the form of long-term leasing costs.
3. Software leasing:
Reproduced copies of computer software can become subject of leasing. Particularly the enterprises dealing with design works are using rather high cost package programs. The existing Law No. 3226 did not allow such programs to benefit from leasing as they are of intangible value.
4. Complimentary parts:
Each individual good maintaining its original characteristics will become subject to leasing. With the new arrangement in the law, the attachments and integral (complimentary) parts will benefit from leasing. This arrangement will allow large-scale provision of financing to many enterprises in small packages
Factoring and Financing Companies Law also includes innovations simplifying the transaction process and legal process, one of the major ones is:
A “Leasing, Factoring and Financing Companies Union” will be established as the legal representative of the industry. This will contribute to development of leasing industry and increase self-discipline of the sector.
The result is that, under the code, the amount which the lessee repays to the lessor within the course of the agreement term is enough to meet the cost of the goods, the broader amount of financing goods and the profit margin of the lessor.
Movable and immovable property may be the subject of the agreement. With the exception of the replicated copies of the computer software, intellectual and industrial rights, such as patents cannot be subject to this agreement.
Regardless of their integral part or accessory qualifications, any product, which preserves its essential qualities, can be subject to a lease agreement on its own.
The ownership of the leased property belongs to the lessor. However, in the agreement, the parties may decide that the lessee shall be entitled the right to purchase the ownership of the property upon the expiration of the term of the agreement. In other words, a purchasing option may be granted to the lessee, but it is not an essential feature of the contract.
Unless otherwise stated in the agreement, the lessor may not transfer the ownership of the property to a third person. If this authority is granted in the agreement, the transfer may be made only to another lessor. The transferee is obliged to comply with the provisions of the agreement. The effectiveness of the transfer for the lessee depends on whether he is informed or not.