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UPDATE - Limited Liability and Joint Stock Companies In Turkey

13th July 2018

Foreign investors in Turkey may start a new company, make a portfolio investment, participate in a joint venture, purchase part of an existing business or establish a branch subsidiary or liaison office with no greater restriction than a Turkish national. Business activities are regulated by the Turkish Commercial Code No. 6762.

To establish a new business, most common type of entities are the Business Corporation (Joint Stock Company) or the Partnership with Limited Liability (Limited Liability Company)

•    "Joint Stock Companies" ("anonim şirket" in Turkish, abbreviated as "A.S.") and
•    "Limited Liability Companies" ("limited şirket" in Turkish, abbreviated as "Ltd. Sti.")


Prior to the enactment of the Turkish Commercial Code (the "TCC") in 2012, the differences between A.S. and Ltd. Sti were so prominent as investors who were looking for more closed and controlled environment with a lot less procedural requirement usually preferred Ltd. Sti., whereas investors looking for more professional and established corporate structure preferred A.S. Although, with the TCC, those differences are greatly diminished, both company types still have their advantages and disadvantages that investors should take into consideration when establishing a company in Turkey.
Related to comparison about Limited and JS Company.


 


LIMITED LIABILITY COMPANIES


NUMBER OF SHARE HOLDERS - May be established with one shareholder, however shareholder number cannot exceed 50.


CAPITAL - Minimum capital is TRY 10.000


CHANGES AT CAPITAL - Changes in capital amount may be done with 2/3 percent votes of the shareholders.


SHARE TRANSFER - For transferring shares at limited liability company, a share purchase agreement must be signed and notarized. The share transfer must be approved by shareholders and it also must registered at trade registry.


GOING PUBLIC - LLC’s could not go public.


ISSUING BONDS - LLC’s could not issue any bond.


LIABILITIES OVER THE PUBLIC DEBT’S- Shareholder shall be held liable for public debts at the rate of his/her share rate.


TAX EXEMPOTION - In the event sale of share, the income gained from the sale shall be subject to tax.


DISSOLUTION OF THE COMPANY - Shareholders may request for dissolution of the company in the event rightful reason.


 


JOINT STOCK COMPANIES


 


NUMBER OF SHARE HOLDERS - May be established with one shareholder, There aren’t any restrictions regarding shareholder numbers


CAPITAL - Minimum capital amount is TRY 50.000 and if capital amount wished to be registered than TRY 100.00 is minimum amount.


SHARE TRANSFER - There aren’t any notarisation requirement it could be transferred too much easily considering to LLC.


GOING PUBLIC -Joint Stock companies could go public.


ISSUING BONDS -Joint Stock companies could issue bond.


LIABILITIES OVER THE PUBLIC DEBT’S - Shareholder shall not be held liable for public debts.


TAX EXEMPOTION -The share sales after obtaining for two years are not subject to tax.


DISSOLUTION OF THE COMPANY - The shareholders may not request dissolution of the company.


 


 


 


 


Article by MGC Legal


Content by YellAli - (All Copyright is protected and owned by YellAli - This content may NOT be copied & distributed by another third party, unless appropriate accreditation is given).


 


 


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