Company law

Choosing between an A.Ş. and a Ltd

The Turkish Commercial Code (Türk Ticaret Kanunu, TTK) provides for collective, commandite, joint-stock (anonim şirket, A.Ş.), limited (limited şirket, Ltd) and cooperative companies (TTK art. 124). The A.Ş. and the Ltd compare as follows:

Forming a company

1. Draft the articles. The TTK lists what they must contain (art. 339 for an A.Ş., art. 576 for a Ltd); an A.Ş.’s articles also appoint the first board. The articles are drafted and filed through MERSİS, the Ministry of Trade’s registry system.
2. Sign. Ltd founders sign before authorised trade registry staff (art. 575). A.Ş. founders have their signatures notarised or sign before the registry director or deputy (art. 339).
3. Pay in capital. An A.Ş. pays at least 25% of its cash capital into a special bank account in the company’s name; the bank releases it after registration, or returns it if the company is not registered within three months of signing (art. 344, 345). A Ltd need not pay anything before registration (art. 585). In an A.Ş., capital in kind is valued by valuers the commercial court appoints (art. 343).
4. Register within 30 days. The articles must be registered with the trade registry of the company’s seat, and published in the Trade Registry Gazette (Türkiye Ticaret Sicili Gazetesi), within 30 days of signing (art. 354, 587).
5. Start as a legal person. The company acquires legal personality on registration. Anyone who acted in its name earlier is personally and jointly liable, unless the act was expressly made for the future company and the company accepts it within three months of registration (art. 355, 588).

Minimum capital and the 31 December 2027 deadline

The TTK sets a minimum capital, which the President may raise (TTK art. 332, 580); a non-public A.Ş. using the registered-capital system needs a higher initial capital (art. 332). The amounts in force since 1 January 2024 are in Presidential Decision No. 7887, listed in the sources.

Existing companies below the minimum must raise their capital by 31 December 2027, or they are deemed dissolved (provisional art. 15, as extended by the Ministry of Trade communiqué of 17 October 2026). For this resolution the general assembly needs no meeting quorum and decides by a majority of the votes present, and privileged shares cannot be used to block it. The Ministry may extend the deadline once more (provisional art. 15).

Foreign shareholders

Unless a treaty or special law says otherwise, foreign investment is free and foreign investors are treated the same as domestic investors. Turkish citizens resident abroad also count as foreign investors (Law 4875 art. 2–3).

• Transfers abroad. Net profits, dividends, sale and liquidation proceeds, licence and management fees and foreign loan payments can be transferred freely through banks or special finance institutions (art. 3).
• Staff. Foreign employees need work permits (art. 3; see immigration).
• Branch instead of a company. A foreign company’s branch is registered like a Turkish business and needs a fully authorised commercial representative (ticari mümessil) resident in Türkiye (TTK art. 40).
• Real estate. A company with 50% or more foreign capital may acquire real estate for its business purposes (Land Registry Law art. 36; see real estate).

Transferring shares

Limited company.

1. Sign a notarised agreement. The transfer, and any agreement to transfer, must be in writing with the parties’ signatures notarised (TTK art. 595).
2. Obtain approval. Unless the articles say otherwise, the general assembly must approve the transfer and may refuse without giving reasons; the articles may also ban transfers. If the assembly does not refuse within three months of the application, approval is deemed given. The transfer is valid on approval (art. 595).
3. Register. The transfer is entered in the share ledger and the managers apply to the trade registry. If they do not apply within 30 days, the departing partner may apply to have their name removed (art. 594, 598).

If the articles ban transfers or the assembly refuses, the partner may leave for just cause (art. 595). A share that passes by inheritance, under matrimonial property rules or through enforcement needs no approval. The company can refuse the new holder within three months of learning of it, but only by offering to buy the share at its real value, which the commercial court sets if the parties disagree (art. 596, 597; see inheritance).

A worked example (hypothetical). A partner living in the UK sells her Ltd shares; the articles say nothing about transfers. She and the buyer sign the agreement with notarised signatures on 4 May, and she applies to the company that day (art. 595). The managers can call a general assembly at 15 days’ notice or seek the partners’ written approval (art. 617). If the assembly has not refused by 4 August, approval is deemed given and the transfer is valid (art. 595). If the managers do not apply for registration within 30 days, the seller may apply to have her name removed (art. 598). Seller and buyer stay jointly liable for public debts from before the transfer that the company cannot pay (Law 6183 art. 35).

Joint-stock company. Registered shares pass by endorsing the certificate and handing it over, freely unless the law or the articles restrict it (TTK art. 490); shares not fully paid need the company’s approval (art. 491). If the articles require approval, the company may refuse unlisted shares only on an important ground stated in the articles, or by offering to buy them at their real value. Ownership stays with the seller until approval, which is deemed given if the company does not refuse within three months (art. 492–494). A transfer of bearer shares takes effect against the company and third parties only once the buyer notifies the Central Registry Agency (Merkezi Kayıt Kuruluşu, MKK) (art. 489). The company recognises as shareholders only those in its share ledger (art. 499).

Capital increases

An increase from reserves gives existing shareholders new shares in proportion to their holdings (art. 462). Under the registered-capital system, shareholders and board members can sue to annul the board’s capital-increase decision within one month of its announcement (art. 460).

Mergers and acquisitions

A business can be acquired by buying the company’s shares (above), by buying the business as a whole, or by merger.

Buying the business as a whole. The contract must be in writing, registered and announced (TTK art. 11). The buyer becomes liable to the creditors once it notifies them or announces the takeover; the seller stays jointly liable for two years, counted from the notice or announcement for debts already due, and from the due date for debts that fall due later (Code of Obligations, TBK art. 202).

Merger. One company absorbs another, or both form a new one. The absorbed company’s partners receive shares at an exchange ratio, with any cash adjustment limited to a tenth of the shares’ real value (TTK art. 136, 140).

1. Agreement and report. The management bodies sign a written merger agreement and prepare a merger report; small and medium-sized companies may skip the report if all partners agree (art. 145, 147).
2. Inspection. The agreement, the report and three years’ financial statements are open to the partners for 30 days before the general assembly (art. 149).
3. Approval. In an A.Ş., three-quarters of the votes present, representing a majority of the capital; in a Ltd, three-quarters of all partners, holding at least three-quarters of the capital (art. 151).
4. Registration. The merger takes effect on registration: assets and liabilities pass automatically, and the absorbed company is struck off (art. 136, 152, 153).
5. Creditors. Three notices are published at seven-day intervals, and creditors who ask within three months receive security (art. 157).

Competition approval. Competition law also applies (TTK art. 153). Mergers and acquisitions that significantly reduce competition are prohibited, and the Competition Board’s communiqué says which transactions need its approval to be valid (Law 4054 art. 7). The Board has 15 days to approve or open a final review; if it does not act, the transaction takes effect 30 days after notification (art. 10). A transaction that needed notification but was not notified is fined, and unwound if it harms competition (art. 11). The thresholds change and are not repeated here.

Challenging general-assembly resolutions

The ordinary general assembly meets within three months of the financial year-end. An A.Ş. gives at least two weeks’ notice in the Trade Registry Gazette and on its website; a Ltd gives at least 15 days’ notice, and may also decide in writing unless a partner asks for a meeting (TTK art. 409, 414, 617).

A resolution that breaches the law, the articles or good faith can be annulled by an action at the commercial court of the company’s seat within three months of the resolution (art. 445). A shareholder who attended must have voted against and had the objection minuted, unless the complaint concerns the notice, the agenda or who was allowed to take part, and this affected the result. The board, and board members who would be personally liable for carrying out the resolution, may also sue (art. 446). Ltds follow the same rules (art. 622). Void resolutions, such as those restricting a shareholder’s right to attend, vote or sue, or breaching the capital-maintenance rules, are listed in art. 447, which sets no time limit.

A worked example (hypothetical). A minority shareholder votes against a resolution at an A.Ş.’s general assembly on 30 March and has the objection minuted (art. 446). The action must be filed by 30 June (art. 445). The board announces the action and the hearing date; the court cannot open the hearing before the three months have passed, and it joins any other annulment actions (art. 448). The shareholder may ask the court to suspend the resolution (art. 449). A final judgment binds all shareholders (art. 450), and a claimant acting in bad faith is liable for the company’s losses (art. 451).

Leaving a company: exit and dissolution for just cause

In a Ltd:

• The articles may give a right to exit (TTK art. 638).
• Any partner can sue to leave for just cause, and during the case the court may freeze the partner’s rights and duties (art. 638). The other partners may join within one month of hearing of it (art. 639).
• The partner who leaves is owed the real value of their share (art. 641). It falls due if the company has usable equity, the share can be transferred or the capital is reduced; any unpaid part ranks after all creditors (art. 642).
• A partner can instead seek dissolution for just cause; the court may order that the partner be paid the real value of their share and leave, or another suitable solution (art. 636).
• A partner excluded by a general-assembly resolution under the articles can sue within three months of notarial service of the resolution (art. 640).

In an A.Ş. there is no statutory exit. Holders of at least 10% of the capital (5% in a public company) may seek dissolution for just cause, and the court may instead order that they be paid the real value of their shares and leave (art. 531).

Dissolution and liquidation

A company is dissolved when its term expires, when its purpose is achieved or becomes impossible, on a ground in its articles, by a general-assembly resolution or on bankruptcy (TTK art. 529, 636). A dissolution resolution needs the votes of at least 75% of the capital in an A.Ş. (art. 421, 529) and, in a Ltd, the art. 621 majority. The company keeps its legal personality during liquidation and trades as “in liquidation” (tasfiye hâlinde) (art. 533); Ltds follow the A.Ş. rules (art. 643).

1. Appoint liquidators. The board acts unless others are appointed. At least one liquidator who can represent the company must be a Turkish citizen resident in Türkiye; otherwise the court appoints one on request (art. 536, 537).
2. Draw up opening accounts. An inventory and a balance sheet go to the general assembly for approval (art. 540).
3. Call the creditors. Known creditors receive registered letters; the rest are called by three notices a week apart in the Trade Registry Gazette and on the company’s website (art. 541).
4. Wind up. The liquidators finish business, collect, sell and pay. If the debts exceed the assets, they notify the commercial court, which opens bankruptcy (art. 542).
5. Distribute and strike off. The remainder is distributed no earlier than three months after the third notice unless the court allows it, and the liquidators then ask the registry to delete the company (art. 543, 545).

The commercial court can re-register a deleted company if further liquidation work is needed (art. 547). A company dissolved by expiry of its term or by a general-assembly resolution can continue until distribution begins, by a resolution backed by at least 60% of the capital (art. 548).

Commercial mediation before court

1. Check coverage. Mediation must come first in commercial cases for a sum of money: receivables, damages, itirazın iptali, menfi tespit and istirdat, the last three since 1 September 2023 (TTK art. 5/A). An action to annul a resolution is not on the list, and the rule does not apply where the parties have an arbitration agreement (HUAK art. 18/A).
2. Apply to the mediation office where the competent court sits. Limitation periods and time limits stop running until the final minutes (HUAK art. 18/A).
3. Attend. The mediator has six weeks, extendable by two (TTK art. 5/A). A party who misses the first meeting without a valid excuse bears half of the court costs the other side would otherwise owe, even if it wins, and is awarded only half the attorney fee (HUAK art. 18/A).
4. Close. In a commercial dispute, an agreement signed by the parties’ lawyers and the mediator is enforceable like a judgment (art. 18). Without agreement, the claimant attaches the final minutes to the statement of claim; if they are missing, the court allows one week and then dismisses the case (art. 18/A).

For interest on a commercial debt, see the statutory interest calculator.

Personal data (KVKK)

A company that processes personal data must tell people why and on what legal ground it collects them (Personal Data Protection Law, KVKK art. 10), keep them secure and report a breach to the person and the Personal Data Protection Board as soon as possible (art. 12), and register in the data controllers’ registry before processing unless the Board has exempted it (art. 16). Since 1 June 2024, transfers abroad need an adequacy decision, a safeguard such as the Board’s standard contract (notified within five business days of signing), or one of the occasional cases the law lists (art. 9).

Deadlines in one place

Mistakes that cost shareholders money

• Selling Ltd shares without notarised signatures. The agreement must be in writing with notarised signatures (TTK art. 595).
• Acting before approval. A Ltd transfer is valid only on approval, or once three months pass without refusal (art. 595). In an A.Ş. with an approval clause, the seller keeps ownership until approval (art. 494).
• Ignoring the company’s public debts. In a Ltd, buyer and seller are jointly liable for public debts from before the transfer that the company cannot pay (Law 6183 art. 35).
• Not having a “no” vote minuted. A shareholder who attends must vote against and have the objection recorded, unless the complaint concerns how the meeting was called or run; and the three months run from the resolution, not from receipt of the minutes (TTK art. 445, 446).
• Letting the capital deadline pass. A company still below the minimum capital after 31 December 2027 is deemed dissolved (provisional art. 15).

Documents to prepare

• Founders’ identity documents and tax numbers; foreign founders’ passports with a notarised translation and an apostille.
• Draft articles prepared through MERSİS; for an A.Ş., the bank letter showing the capital paid in (TTK art. 345).
• The registered address, the managers’ or directors’ details and their signature declarations.
• For a share transfer: the notarised agreement, the general-assembly approval and the updated share ledger.
• For a dispute: the articles, general-assembly minutes and invitations, the shareholder list, financial statements and correspondence; for a money claim, the mediator’s final minutes.
• A power of attorney if a representative will act for you (giving a power of attorney from the UK).