Types of Companies in Turkey
According to the Turkish Commercial Code numbered 6102, companies are divided into two groups as capital companies and private companies. According to the law, collective and limited partnership companies are private; joint stock companies, limited liability companies and limited partnerships divided into shares are considered as capital companies.
In capital companies, the capital they put forward is at the forefront rather than the people themselves. The responsibilities of the shareholders of the capital company are proportional to their shares in the capital. Joint stock companies, limited liability companies and limited partnerships divided into shares are considered as capital companies.
In private companies, unlike capital companies, partners come to the fore rather than capital. In private companies, where the number of partners is generally less than capital companies, the partners can only be real persons. Partners of private companies are personally and unlimitedly liable for company debts. For this reason, all partners are subject to the prohibition of competition and have the right to audit the company. In addition, the approval of all partners is required for the transfer of shares. Collective and ordinary limited partnership companies are considered as private.
Joint Stock Company
They are companies whose capital is definite and divided into shares. They are established with a minimum capital of 50,000 Turkish Liras. However, in some exceptional cases, the minimum capital for the establishment becomes 100,000 Turkish Liras. Joint stock companies are held liable for their debts only to the extent of their assets. Shareholders are only liable to the company for the capital shares they have committed.
Joint stock companies, which can be established for any economic purpose that is not prohibited by law, have an article of association written and registered to the trade registry at the place where their headquarters are located. Joint stock companies may issue registered and bearer shares, issue bonds and similar debt instruments to represent the shares.
In this type of company, which can also be established by a real or legal person as a sole shareholder, if the number of partners exceeds 250, some of the shares are offered to the public. Joint stock companies are the only types of companies whose shares can be offered to the public and whose shares can be traded on the stock exchange. The general assembly approval is not required for the transfer of shares.
Joint stock companies that carry out certain activity areas and joint stock companies that exceed the threshold values of the criteria determined according to the total balance sheet assets, annual net sales revenue, and the number of employees are subject to independent audit.
In joint stock companies, there is a general assembly where all the shareholders are represented and a board of directors that deals with management and representation.
The establishment and amendments to the articles of association of certain joint stock companies such as banks, insurance companies, consumer finance are subject to the permission of the Ministry of Trade.
Limited companies, like joint stock companies, are companies whose capital is definite and divided into shares. They are established with a minimum capital of 10,000 Turkish Liras. Limited company partners are not responsible for the debts of the company, but they are only responsible for paying the main capital shares they have committed and fulfilling the additional payment and performance obligations stipulated in the company contract.
In this type of company, which can also be established by a real or legal person as a sole shareholder, the number of partners should not exceed 50.
Limited companies have a written company agreement registered to the trade registry at the place where their headquarters are located. Bearer shares cannot be issued to represent the shares, and the transfer of shares is subject to the approval of the general assembly.
Limited companies have a general assembly where all stakeholders are represented, and a board of directors that deals with management and representation.
There are two types of limited partnership companies. Of these, ordinary limited partnerships are considered private companies, and limited partnerships divided into shares are considered capital companies.
Limited partnership companies can be established by at least two people, one of which is active partner (unlimited liability) and one dormant partner (limited liability). Active partners can only be real persons, but dormant partners can be real or legal persons.
The active partners are liable for the debts of the company as in the collective companies. Creditors who cannot meet their receivables from the assets of the company may apply to the active partners. In addition, active partners can manage the company. Dormant partners, on the other hand, cannot manage the company, and their responsibilities are limited to the amount of capital they have invested or committed.
In collective companies that can be established with at least two real persons, the partners have unlimited second-degree liability to the creditors of the company. That is, the company is held liable with its assets first. The debt that cannot be collected from the company itself is collected from the partners.
In cases such as the entry of a new partner, the exit of one of the partners, or the change of the contract, it is necessary to be unanimous in the collective companies.
There is no minimum capital amount for the establishment of collective companies.
Each of the company partners has the right and duty to manage the company. However, management business may be assigned to one, several or all of the partners, either by company agreement or by the majority of partners.
According to the definition of the Ministry of Commerce of the Republic of Turkey, cooperatives are an autonomous organization of people who voluntarily come together to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
Cooperatives are not considered private companies or capital companies. Except for some special exceptions, the boards of directors of cooperatives established with at least 7 people consist of real or legal persons who are Turkish citizens and meet some other conditions, and the board of directors must be at least 3 people. Members of the board of directors in cooperatives can be elected for a maximum of four years, and if there is no contrary provision in the articles of association, there is no obstacle for them to be re-elected.
Provided that it is included in the articles of association of the cooperative, it can be decided that the partners have unlimited second-degree liability or that their responsibilities may be limited to a certain extent.
One or more auditors are elected by the general assembly as the supervisory body of the cooperative for at least one year. Auditors are required to be members of the board of directors.
All partners can attend the general assembly of cooperatives, except those who are not partners three months before the assembly.
Company Establishment Stages
The establishment stages of the companies vary according to the type of company to be selected. Establishment procedures are carried out electronically over the Central Registry Number System (MERSIS). In general, the company establishment stages are as follows:
1. Company establishment procedures should be initiated by creating a free membership on MERSIS's website https://mersis.gtb.gov.tr/. In the company contracts to be prepared through MERSIS, Turkish citizens can be defined as partners or authorized with their ID numbers, and foreigners with their passport numbers, provided that the foreigners must first obtain a tax number from the tax office and register it to MERSIS by applying to the trade registry office.
Contracts are prepared in Turkish. In transactions to be made through MERSIS, the system guides users to fill in the elements that are legally required to be in the contract and ensures that the contract is prepared correctly. The tax number to be used after the establishment of the company is also assigned by MERSIS. Then, the founders sign the contract, and it is verified by a competent authority, whether the signatures belong them or not. For this process, the founders or their authorized representatives are required to go to the relevant organization. In limited companies and cooperatives, this process is carried out at the trade registry directorate where the company's headquarters is located. For other types of companies, an application can be made from any notary public.
2. In any trade registry directorate, the signatures to be signed by the persons authorized as company representatives under the company title must be approved by the competent authority and signature declarations must be prepared.
3. At the establishment stage of the company, 0.04% of the capital is deposited into the bank account of the institution as "Competition Authority Share". Along with other establishment procedures, this fee can also be paid at the trade registry office. In the establishment of a joint stock company, at least 25% of the shares committed in cash must be deposited into a bank account opened in the name of the company before the company is registered.
4. Finally, upon the application of the founders to the registry office with the necessary documents, the registration process is completed by the trade registry office. In the establishment of joint stock companies, limited companies and cooperatives, the commercial books to be kept are approved by the trade registry directorate and to the related party. Company establishment transactions can also be made through a representative authorized by a power of attorney.
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