COMMERCIAL LAW

ESTABLISHING BUSINESS IN TURKEY

Ozge Hakdan Erguc

Attorney At Law 

The New Turkish Commercial Code numbered 6102, published in the Official Gazzette on February 14,2011 came into effect on July 1, 2012. 

  • According to the New Turkish Commercial Code; joint stock companies and limited liability companies shall be established with only a single shareholder. In case of establishing a joint stock company or limited liability company with only a single shareholder, managing director of the company has to register and announce that the company has one shareholder and also register and announce the name, citizenship and place of residence of the shareholder.
  • The New Turkish Commercial Code stipulates that the board of directors shall be consisting of a single person, this amendment will provide great convenience to foreign investors to do business easily between countries.
  • According to the New Turkish Commercial Code board members’ physical presence are not required, board meetings can be made in electronic environment and resolution of board of directors can be approved by electronic signatures.
  • Legal entities can be assigned as board members. The New Turkish Commercial Code has abolished the rule that the board members must be shareholders.  According to the New Turkish Commercial Code, any independent individual may be a board member as long as at least one fourth of the board of directors are university graduates.
  • The New Turkish Commercial Code enacted to adopt a registered capital system for non-public companies, according to this amendment non-public joint stock companies may benefit from the opportunity of flexible capital increases introduced by the registered capital system.

According to the New Commercial Code, there are 4 incorporated entities and 3 unincorporated entities. Incorporated entities are Joint Stock Company, Limited Liability Company, Commandite Company, Collective Company and Cooperative Company. Unincorporated entities are Joint Venture, Business Association and Consortium. Joint Stock Company :  

  • The company’s stock capital is divided into shares.
  • Shareholders’ liability is limited to the subscribed capital and paid by the shareholder.
  • The company shall be established with at least one shareholder. (Legal entity or real person)
  • Minimum capital of TRY is 50.000. 
  • The company shall include a general assembly, a board of directors and a supervisory board. 

Limited Liability Company :  

  • The company shall be established with at least one shareholder. (Legal entity or real person)
  • Shareholders’ liability is limited to the subscribed capital and paid by the shareholder.
  • Minimum capital of TRY is 10.000.  Council of Minister can increase the capital to TRY 100.000.

Commandite Company 

  • The company established to operate a commercial enterprise under a trade name.
  • Some shareholders’ liability is limited to the capital subscribed and paid by the shareholder. Some shareholders’ liability is not limited.
  • Legal entities can only be commanditer.
  • No minimum capital is required.

Collective Company 

  • The company established to operate a commercial enterprise under a trade name.
  • None of the shareholders’ liability is limited  only to the capital subscribed and paid by the shareholder.
  • No minimum capital is required.
  • It is obligated that all shareholders have to be real persons.

Company Establishment Procedure and Required Documents for the Company Establishment  

  • A company establishment petition and a notification form which is duly filled and signed by persons who have been authorized to represent the company.
  • Articles of association including notarized signatures of founders and notary certification proving that all shares constituting the registered capital have been subscribed by the founders in the articles of association
  • Founders’ statement signed by the founders
  • The bank letter proving that the share capital has been deposited
  • Bank receipt indicating that 0.04% of the company capital has been deposited to the account of the Turkish Competition Authority at a state bank
  • Permit or letter of compliance for companies whose corporation are subject to the permit or letter of compliance issued by the relevant ministry or other official institutions
  • Notarized copy of signatures of persons with the authority to represent and bind the company
  • Application number indicating that the trade name to be used has been checked and confirmed by the Trade Registry Office
  • Company establishment statement form (3 original copies)
  • Certificate of residence of founding partners
  • Notarized translation of passport in case the foreign shareholder is a real person; apostilled and notarized translation of registry document issued by the competent authority in case the foreign shareholder is a legal entity.