Joint Stock Company in Turkey
The minimum capital amount for Joint Stock Companies is 50,000 Turkish Lira. (For non-public joint-stock companies that adopt the registered capital system, the initial capital can be at least 100,000 Turkish Lira.) It is mandatory to pay at least one-quarter of the nominal values of the shares committed in cash before registration. The remaining amount is paid within 24 months following the registration of the company. The payment schedule can be arranged in the company’s articles of association, or it can also be determined by the board of directors.
A single shareholder joint-stock company can be established.
The number of shareholders exceeding five hundred causes the company to be subject to the provisions of a public joint-stock partnership.
As a rule, there is no need for general assembly approval for the transfer of shares. Shareholders can freely transfer their shares to others.
There are two bodies in Joint Stock Companies according to the Turkish Commercial Code.
General Assembly
It is the body exclusively authorized to make certain important decisions regarding the company, in which all shareholders are represented as a rule (e.g. amending the articles of association, electing the board of directors, selecting the auditor, dissolution of the company, etc.).
Board of Directors
It is primarily the body responsible for the management and representation of the company. The board of directors can consist of a single member. There is no requirement for board members to be Turkish citizens or to be resident in Turkey.
Joint Stock Company Establishment Process and Procedures:
Preparation of the company contract and attestation of the founders’ signatures
Users initiate the company establishment process by creating a membership on MERSIS’s internet address. During the preparation of the company contract in MERSIS, Turkish citizens can be added as partners or authorized persons with identity numbers, and foreigners can be added with passport numbers.
MERSIS legally directs the user to fill in the elements that must be included in the main contract and prepares the company’s articles of association by entering the necessary information. The potential tax number of the company is also automatically assigned by MERSIS. Then the founders sign the contract, and these signatures are attested to be genuinely theirs by an authorized body. For this process, it is necessary for the founders or authorized representatives to go to the relevant institution. For joint-stock companies, an application is made to the trade registry office where the company’s headquarters is located.
Preparation of signature declarations of company officials”
“People authorized to represent the company must have their signatures, to be affixed under the company’s title, approved at any trade registry office.
Payment of Competition Authority Share and Cash Capital
0.04% of the joint-stock company’s capital must be deposited as the “Competition Authority Share” into the bank account of this authority. There is no need to visit the bank separately for this transaction. This fee can be paid at the trade registry office along with other incorporation procedures. Additionally, for joint-stock companies, at least 25% of the cash capital must be deposited into a bank account in the company’s name before its registration.
Application to the Trade Registry Office for Registration
Upon the application of the founders to the registry office with the necessary documents, the trade registry office completes the registration process. Moreover, during the establishment of a joint-stock company, the commercial books that will be kept are approved by the trade registry office and are given to the concerned party after registration. The establishment procedures can also be carried out through a representative authorized by a power of attorney.
What are the documents required for the registration of a Turkish joint-stock company?
- Main contract with the founders’ signatures approved
- Document proving that at least twenty-five percent of the pledged capital has been deposited in the bank
- Payment document showing that the Competition Authority share has been paid
- If applicable, valuation reports prepared by a court-appointed expert for the determination of the value of in-kind capital, businesses to be taken over during establishment, and in-kind assets
- If in-kind capital is involved, a document from the relevant registry indicating that there are no restrictions on the in-kind capital contributed
- If in-kind capital is involved, a document proving that annotations have been made to the registries where the in-kind capital, intellectual property rights, and other assets are registered
- If applicable, contracts made between the company being established, founders, and other parties related to the establishment, including those related to the transfer of in-kind assets and businesses
- For companies whose establishment is subject to the permission or approval of the Ministry or other official institutions, this permit or approval document
- If applicable, written statements of non-shareholder board members accepting this role
- If there is a legal entity on the board of directors, a notarized copy of the decision of the competent authority that identifies the name and surname of a natural person, determined by the legal entity on behalf of the legal entity
- Signature declarations of persons authorized to represent and bind the company
Liability of Shareholders in Joint-Stock Company
Except for exceptions provided by law, in Joint-Stock Companies, the only obligation of the shareholders is to fulfill the share price they have committed in return for the shares they own. Once the capital debt is fulfilled, shareholders cannot be obliged to put new and additional capital without their consent. Company creditors cannot apply to partners for the company’s debts and also shareholders are not responsible for public debts.
Joint-Stock Company Board of Directors and Responsibilities
The Board of Directors in Joint-Stock Companies is the management and representation body of the partnership. It can consist of a single person or more than one person. Board members can be natural persons or legal entities. It is not mandatory for a Board member to be a shareholder. The board membership is determined in the company’s articles of association during its establishment. In periods after the establishment, it is elected by the general assembly. There is no obligation for Board members to be Turkish citizens and have a residence in
Turkey.
Board members cannot transact with the company in their name and must comply with the prohibition of borrowing against the company. Additionally, a member cannot engage in a commercial transaction that falls within the subject of the company’s partnership on behalf of themselves or someone else (competition prohibition).
Also, board members are responsible to the creditor public administration for unpaid or uncollectible public debts of the company (debts against government agencies, tax debts, etc.).
Shareholders and Board Members of a Joint-Stock Company are Not Required to Reside in Turkey or be Turkish Citizens.
In joint-stock companies, there is no requirement for some or all of the partners and board members to reside in Turkey. On the other hand, there is no restrictive provision in the TCC regarding the nationality of the partners and board members, in other words, there is no requirement to be a Turkish citizen.”
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