The shareholders of any capital company (Joint-stock, Limited Liability, Limited Liability partnership companies) to be established to operate in Turkey may be local real persons or legal entities, as well as foreign real persons and legal entities. In other words, the 100% shareholders of the company desired to be established in Turkey may be a foreign real person or a foreign legal entity. There is no obstacle for a company already established abroad to decide to establish a Limited Liability company or joint stock company in Turkey.
What is a Limited Liability Company (LLC)?
A Limited liability company is a company whose capital is determined and divided into shares and is liable for its debts only with its assets (Turkish Commercial Code (“TCC”) article 573/1).
Partners are not responsible for the company’s debts; they are only obliged to pay the basic capital shares they have committed and to fulfill the additional payment and side performance obligations stipulated in the company agreement (TCC article 573/2).
A single partner Limited liability company can be established. However, the number of partners cannot exceed fifty (TCC article 574/1). Limited Liability company partners can be natural persons or legal entities.
The main capital of the Limited Liability company is at least 10,000 Turkish Liras; The nominal values of the capital shares can be determined as at least twenty-five Turkish Liras or multiples thereof (TCC article 583/1). It is possible to pay the entire capital brought in cash within twenty-four months after the registration of the company (TCC article 585). The payment schedule can be regulated in the company contract or determined by the managers (TCC articles 585, 481).
The trade name can be determined freely, provided that the phrases indicating the business subject and the company type are in Turkish (Communiqué on Trade Names Art. 4/1). In the trade name, It is mandatory to have the phrase Limited Liability company and indicate its field of activity (TCC Article 43).
What is a Joint Stock Company?
A joint stock company is a company whose capital is determined and divided into shares, and which is liable for its debts only with its assets (TCC Article 329). The trade name can be determined freely, provided that the phrases indicating the business subject and the company type are in Turkish (Communiqué on Trade Names Art. 4/1). In the trade name, It is mandatory to include the phrase “joint stock company” and indicate its field of activity (TCC Article 43).
The minimum capital amount is 50,000 Turkish Liras. For non-public joint stock companies that accept the registered capital system, the initial capital can be at least 100,000 Turkish Liras (TCC article 332). At least one quarter of the nominal value of the shares committed in cash must be paid before registration. The remaining amount is paid within 24 months following the registration of the company (TCC article 344). The payment schedule can be regulated in the company’s articles of association or determined by the board of directors (TCC article 481).
Joint stock companies carrying out certain fields of activity and joint stock companies exceeding the threshold values of criteria determined according to total balance sheet assets, annual net sales revenue and number of employees are subject to independent audit. (TCC Article 397 et seq.)
Who can be the shareholders of Limited Liability companies and joint stock companies?
Shareholders of Limited Liability and joint stock companies can be foreign real persons, foreign legal persons, local real persons and local legal persons as a single shareholder, or they can be established as a mixture of these with multiple shareholders.
Who Can Be the Manager of Limited Liability Companies and Joint Stock Companies?
In joint stock companies, the manager can be chosen from among the partners, or it is possible to choose a manager from outside. The manager, who is not elected from among the partners but is appointed from outside, may be individually assigned to manage the company.
In Limited Liability Companies, the manager must be chosen from among the partners. In Limited Liability companies, more than one manager other than the partners can be appointed, provided that at least one partner is the manager. In other words, it is possible to appoint an external manager in Limited Liability companies, provided that at least one of the managers is a partner.
What are the documents required to establish a company with a foreign legal entity shareholder and to appoint a foreign legal entity shareholder as a manager?
First of all, after determining the activity fields of the company will operate, the company’s articles of association must be prepared in accordance with the activity fields. It is very important that the company’s articles of association are prepared by a professional lawyer in this field. While preparing the company’s articles of association, the address where the company will be established must be selected. While the company’s address can be a physical office, it is possible to choose a virtual office. Our law office also provides virtual office rental services for you, if preferred.
Afterwards, the documents listed below must be prepared by the company abroad, and after the documents whose originals have been sent are translated and approved by the notary, an appointment is made with the chamber of commerce.
On the appointment day, the company will be established within 2-3 hours following the signing of the company establishment in the chamber of commerce along with the power of attorney issued by the company. List of Documents to be Prepared and Attested by a Foreign Company:
- Power of attorney to be given to our law firm by the foreign company
- Passport translation of the representative of the company abroad
- Trade registry records and articles of association of the company abroad
- Decision of the authorized body for the legal entity to be elected as a director.
- Chamber registration declaration
- Establishment Form
- Tax identification number obtained from Turkey for a foreign legal entity.
- Tax identification number obtained from Turkey for the foreign legal entity representative.
All of the documents listed above must be made legal in order to be used in Turkey. If the headquarters of the foreign company is in one of the member countries of the Hague Convention, all documents must be apostilled. If the headquarters of the foreign company is not one of the member countries of the Hague Convention, all documents must be approved first by the Ministry of Foreign Affairs of the country and then by the Turkish Consulate.