Types of Business Organizations


Source: Prime Ministry, Undersecretariat of Treasury; Types of business organizations


Joint Stock Company (Anonim Sirket - A.S.)


Limited Liability Company (Limited Sirket - Ltd. Sti.)


Branches and Liaison Offices


Companies or Branches in Turkish Free Trade Zones


Joint Stock Company


A joint stock company is defined as a corporation having its own trade name and a predetermined amount of capital divided by shares. The liability of the shareholder is limited to their capital.


The structure and organisation of joint stock companies are subject to regulation by the Turkish Commercial Code. However, the founders of joint stock companies are afforded significant flexibility in drafting the articles of association, thereby serving the needs of the specific venture. Capital Market Board regulations also apply to joint stock companies whose shareholders' number at least 250, or who have issued bonds or whose shares are quoted on the Istanbul Stock Exchange.


A minimum of five shareholders, who may be either real persons or legal entities, are required for the formation of a joint stock company. The overall share capital must be a minimum of 5 billion TL and the minimum capital contribution by each foreign shareholder is US $ 50,000.


The capital of a joint stock company is divided into shares of equal value which are treated as negotiable commercial paper. The shares may be issued in either registered or bearer form. Registered shares are freely transferable subject to approval by the board of the company, unless prohibited by the company's articles of association. Bearer shares are freely transferable under the Code of Obligations, unless otherwise agreed by the parties.


Decision making in a joint stock company is by majority vote; but the Turkish Commercial Code includes certain provisions to protect minority interests. Minority shareholders may also request the appointment of a special auditor on their behalf.


Limited Liability Company


Limited liability companies may be composed of real persons or legal entities and must consist of at least 2 and no more than 50 partners. The overall share capital must be a minimum of 500 million TL and the minimum capital contribution by each foreign shareholder is the TL equivalent of US $ 50,000. All partners are personally liable for the debts of the company up to a maximum of their contribution, however, partners are not held liable for the unpaid portions of others' contributions. They are also more directly exposed to the tax liabilities of the company, limited however to their own shares.


Shares held in a limited liability company are non-negotiable and may be transferred only with the approval of the other partners. Transfers must be approved by at least a 75% majority vote, with at least 75% of the total capital represented. Limited liability companies are also prohibited from engaging in banking or insurance business. A limited liability company differs from the joint stock company in that its capital is not divided into shares of stock nor represented by share certificates. There is no board of directors for a limited company. Instead, the appointed manager has authority to run the company.


Branches and Liaison Offices


Foreign companies may also operate through liaison offices or branches providing they are established in accordance with the relevant legislation. The income of a branch derived in Türkiye is taxed in the same way as resident corporations.


Liaison offices may be used to establish a presence in Türkiye, but may not carry on any commercial activity and must be funded by the parent company outside Türkiye.


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