Main Company Types Under Turkish Law
According to the Turkish Commercial Code, there are five types of companies in Turkey as described below:
Joint Stock Company:
Joint Stock companies are established for economic purposes, and subject that is non-prohibited under the law. The capital for this kind of company is definite and is divided into shares, which are liable for debts only with its property holdings. Shareholders are only liable to the company for the capital shares they have committed. A joint-stock company can be established with a single share, having real and legal people as shareholders. The company has articles of association written and registered to the trade registry, at the place of headquarters. As a rule, the approval of the general assembly is not needed for the transfer of shares and the shareholders can freely transfer their shares to others. This is the only type of company whose shares are offered to the public and are also traded on the stock exchange.
The minimum capital amount is 50,000 TL, and for the JSC accepting the registered the capital system may be at least 100,000 TL. At least one-quarter of the nominal share must be paid in cash before registration, and the remaining amount must be paid within 24 months of following the registration. The payment schedule can be set in the article of association or by the board of directors.
Limited Company:
A limited company is the one whose capital is definite and is divided into shares, being liable for debts only with its property holdings. A limited company can be established with a single shareholder, whereas the number of shareholders should not exceed fifty people. Partners of these companies must be legal or real people. A limited company must have a written contract registered to the trade registry at the place of headquarters. The shareholders of a limited company are not liable for the debts but are required to pay only the capital shares they have committed. They are liable for capital debts because of uncollectable public debt at the rate of their capital shares.
The capital of the limited company is at least 10,000 TL and it is valid to pay all the capital in cash within 24 months of the company’s registration. The payment schedule can be arranged in the contracts or can be set by the directors of the company. Bearer shares can not be issued in a limited company and they can not be offered to the public. The transfer of shares in this kind of company is subject to the approval of the general assembly.
Collective Company:
Collective companies are the ones that can be established by two partners who must be real persons. Both the partners have the right and responsibility to manage the company separately and the management business can be assigned to one or several other partners, by the company agreement or by the majority of the partners. These partners are second-degree unlimited liable to the creditors of the company. Also, there is no requirement of capital for a collective company.
Limited Partnership Company:
A limited partnership company has two types; ordinary limited partnership (private company) and limited partnership divided into shares (capital company). It can be established by at least two people, one being the active partner (unlimited liable) and the other being the static partner (limited liable). The active partners must be real persons whereas the dormant partners can be both real or legal persons. The liability of a dormant partner is restricted to the capital they invest and they can not manage the company. The responsibility of an active partner is like a collective company partner and they can manage the company.
Cooperatives:
A cooperative company is not a private or capital company, but a commerce company that can be established by at least seven partners. Each partner takes at least one and at most five thousand shares. The amount of partnership share is 100 TL. All partners except those who were not partners, three months before the general assembly, may participate in the cooperative general assembly. This process is not required in building cooperatives. The board of directors for this company must comprise four Turkish citizens who fulfill other requirements defined by the law.
