Entrepreneur's Handbook
What are the Company Types?
The companies regulated in the Turkish Commercial Code (TCC) are of 4 types:
- Unlimited company
- Limited Partnership
- Incorporated company
- Limited company
INCORPORATED COMPANY
Definition of Incorporated Companies: It was defined as a company that has all the characteristics of being a capital company, established to achieve great goals, managed on a majority basis with boards capable of all kinds of economic activities, is able to issue securities (stocks, bonds, etc.), whose capital is determined and divided into shares, and is only liable for its assets due to its debts. Shareholders are only liable to the capital shares they have committed and to the company.
Features of Incorporated Companies:
- Incorporated companies can be established in order to realize all kinds of economic and commercial matters that are not prohibited by law. The company subject must be clearly indicated in the articles of association.
- In Incorporated companies, as a result of the legal person being a merchant, it has to be established under a trade name and registered this trade name in the trade registry.
- Since an Incorporated company is a capital company, the trade name should be related to the business subject. The phrase " Incorporated company" should be written as "AŞ (Inc. in English)" in clear or abbreviated form.
- Establishment procedures of Incorporated companies are regulated in the Turkish Commercial Code. It is sufficient to have one or more founders to establish an Incorporated. Thus, it is possible for one person to establish an Incorporated company.
- The basic capital is 50.000 TL and the initial capital cannot be less than 100.000 TL in non-public Incorporated companies that have accepted the registered capital system.
- Share transfer is easy in Incorporated companies. They pass into other hands as a security. The stocks purchased in return for the capital in kind (goods, goods) during the establishment cannot be sold until two years have passed.
- Incorporated companies are corporate taxpayers. The addressee of the tax is the company.
- The right to issue shares and bonds is only given to Incorporated companies.
- Incorporated companies have legal personality. It takes place with registration to the legal entity trade registry.
- The liability of the Incorporated company against its debts is limited to its assets. The responsibility of the partners is limited to the capital they have committed.
- The capital is divided into shares of 1 Kr each and its multiples.
- An Incorporated company can be represented by shares by dividing its capital into shares. Bearer shares cannot be issued unless the company's capital is fully paid.
LIMITED COMPANY
Definition of Limited Companies: It is a company established by two or more real or legal persons under a trade name and the responsibility of the partners is limited to the capital they have committed to make and whose principal capital is determined.
Limited companies must be established with a minimum capital of 10,000 TL and a minimum of 1 partner. Titles that need to be determined in Turkish must contain the phrase Limited Company and show the field of activity. The share capital must be at least 25 TL or its multiple.
Properties of Limited Companies:
- The establishment procedures of a limited company are easier than the establishment procedures of an incorporated company.
- The company has a trade name. The trade name must be related to the business.
- Limited companies can engage in all kinds of activities that are not prohibited by law, except banking and insurance.
- Limited company capital must be at least 10,000 TL.
- The capital to be contributed by the partners must be at least 25 TL or its multiples.
- The liability of the partners against company debts is limited to the capital they have committed.
- Capital is divided into shares, not allocations.
- Limited companies cannot issue stocks and bonds.
- In limited companies, partnership transfer is more difficult than joint stock companies. The transfer of shares must be carried out before a notary, registered in the trade registry and announced in the Turkey Trade Registry Gazette.
- The management of a limited company can be carried out by one or more of the partners, or an external manager can be appointed.
- In limited companies, decisions are taken by the majority of the partners.
- Limited companies with more than twenty shareholders must have an auditor.
- In limited companies, not all partners are subject to competition prohibition. Only administrators are subject to this prohibition.
In limited companies, the addressee of tax is the company itself. Limited companies are corporate taxpayers.
Company Establishment Stages
- Financial advisor
First of all, when it is decided to establish a company, you should meet with a Financial Consultant who you think is an expert in his / her job and agree to make and follow up your transactions on your behalf.
2- Choosing the Type of Company
It should be decided whether the company type will be a private company or a capital company. Depending on whether it is "Person", "Limited" or "Incorporated", the responsibilities, advantages and disadvantages it brings will vary.
- Preparation of Company Articles of Association
While preparing the articles of association for the company, we need to decide what the company's features, title, address, manager, capital, profit distribution, etc. will be. The main source of the company is the main contracts.
- Approval of the Articles of Association in the Trade Registry
After the company's main contract is prepared by the Financial Advisor, it is transferred to the MERSİS system, after entering the information item by item in the relevant parts of the system, the registration number is obtained at the approval stage. The registration number is sent to the Trade Registry Office to the authorized officer and the registration number is sent to the Trade Registry Directorate with the received registration number, and 3 main contracts are signed by the partners in the presence of the Officer, approved and received. Here, the person authorized to represent the company also prepares a registration request (signature statement).
In addition, a notarized identity copy must be issued in order to submit it to the tax office in the process of starting work.
- Potential Tax Identification Number and Banking Process
- Completion of Documents and Submission to the Trade Registry
- Preparation of Signature Circular
After the registration of the company's articles of association in the Trade Registry, the company became a legal entity. The director of the company, who will represent the company, can then prepare the signature circular with the signature samples he will put under the company title at the notary. Signature circulars will be required in all transactions to be made on behalf of the company. All legally required books on the day the company is registered must be notarized.
- Book Confirmations
- Tax Office Commencement Notification and Registration Procedures
- Chamber of Commerce and Industry Transactions
- Municipal Operations
- Commencement of Commercial Activity