Establishing LLC and Joint Stock Companies: Step-by-Step Guide

When starting a business in Turkey, understanding the process of şirket kuruluşu (company establishment) is crucial. This guide will walk you through the steps required to establish a Limited Liability Company (LLC) and a Joint Stock Company (JSC) according to the Turkish Commercial Code (TTK). By following these steps, you will be able to successfully navigate the legal requirements and ensure a smooth establishment process.

Understanding Limited Liability Companies (LLC)

What is a Limited Liability Company?

A Limited Liability Company, known as "limited şirket" in Turkish, is a common choice for small and medium-sized enterprises in Turkey. It combines the benefits of limited liability protection with a simple management structure. The owners, known as partners, are only liable for the company’s debts up to their contributions to the capital.

Legal Framework

The establishment and operation of an LLC in Turkey are governed by the Turkish Commercial Code (TTK), particularly Articles 573 to 629. These articles outline the legal requirements and regulations for forming and managing an LLC.

Steps to Establish an LLC

Step 1: Prepare the Articles of Association

The first step in establishing an LLC is to prepare the Articles of Association (Ana Sözleşme). This document must include:

• The company name
• The headquarters address
• The purpose of the business
• Information about the capital and shares
• The names of the partners

Step 2: Notarization of the Articles

Once the Articles of Association are drafted, they must be notarized. This step is essential as it confirms the authenticity of the document and is required for registration.

Step 3: Open a Bank Account

Before registration, the LLC must open a bank account in Turkey. The initial capital must be deposited into this account, and the bank will provide a statement confirming the deposit.

Step 4: Register with the Trade Registry

The next step is to register the LLC with the relevant Trade Registry. This process involves submitting the notarized Articles of Association, the bank statement showing the capital deposit, and other required documents. Upon approval, the company will be officially registered.

Step 5: Tax Registration

After registration, the LLC must register with the local tax office. This registration is vital for obtaining a tax identification number and complying with tax obligations.

Understanding Joint Stock Companies (JSC)

What is a Joint Stock Company?

A Joint Stock Company, referred to as "anonim şirket" in Turkish, is suited for larger businesses and allows for the issuance of shares to raise capital. The liability of shareholders is limited to the amount unpaid on their shares, providing similar protection to LLCs.

Legal Framework

The establishment and management of JSCs are primarily regulated under Articles 328 to 420 of the TTK. These regulations provide detailed guidance on the formation, governance, and dissolution of JSCs.

Steps to Establish a Joint Stock Company

Step 1: Draft the Articles of Association

Just like an LLC, the first step for a JSC is to draft the Articles of Association. This should include:

• Company name and address
• Objectives and activities
• Share capital and structure
• Rights and responsibilities of shareholders

Step 2: Notarization of the Articles

The Articles of Association must be notarized to verify their authenticity.

Step 3: Capital Requirements

A JSC must have a minimum capital requirement, which is currently set at 50,000 Turkish Lira. This capital must be paid in full before registration, and a bank confirmation of the deposit is required.

Step 4: Register with the Trade Registry

Similar to an LLC, the JSC must be registered with the relevant Trade Registry. The notarized Articles of Association and bank confirmation should be submitted as part of this process.

Step 5: Obtain a Tax Identification Number

After registration, the JSC must register with the local tax office to obtain a tax identification number, which is essential for tax compliance.

Step 6: Publish the Company Announcement

Finally, the establishment of the JSC must be announced in the Turkish Trade Registry Gazette. This step is crucial for public awareness and legal recognition.

Conclusion

Establishing a Limited Liability Company (LLC) or a Joint Stock Company (JSC) in Turkey involves a series of steps governed by the Turkish Commercial Code (TTK). By following the outlined procedures, entrepreneurs can ensure compliance with legal requirements and set a solid foundation for their business ventures.

For more detailed assistance with şirket kuruluşu, consider consulting our team of experts. You can schedule a consultation to receive personalized guidance tailored to your business needs. Additionally, explore our services for further information on commercial law in Turkey.

Frequently Asked Questions

What is the minimum capital requirement for an LLC in Turkey?

The minimum capital requirement for establishing a Limited Liability Company (LLC) in Turkey is 10,000 Turkish Lira.

How long does it take to establish an LLC or JSC in Turkey?

The establishment process can take anywhere from a few days to several weeks, depending on the completeness of the documentation and the efficiency of the Trade Registry.

Can a foreigner establish a company in Turkey?

Yes, foreigners can establish both LLCs and JSCs in Turkey, provided they meet the legal requirements set forth in the Turkish Commercial Code.

This article is for general informational purposes only and does not constitute legal advice. For your specific situation, please consult a lawyer. For detailed information and appointments, contact us.