A General Overview of the Company Establishment Process

Establishing a company in Turkey generally involves the following steps:

1. Determining the Company Type: Choosing between a Joint Stock or Limited company based on factors like the business’s field of activity, capital structure, number of partners, and liability status.
2. Preparation of the Articles of Association: Drafting the company’s articles of association, which include fundamental information such as the company name, headquarters, purpose, capital, partners, and representatives, and creating the draft through the e-Devlet integrated MERSİS system.
3. Registration and Announcement in the Trade Registry: Submitting the prepared articles of association along with the necessary documents to the Trade Registry Directorate for registration and announcement.
4. Tax Office and Social Security Institution Registrations: Completing the required registration procedures with the relevant tax office and SGK after the company’s registration.

Each of these processes requires legal knowledge and careful attention. However, choosing the company type is at the very beginning of this entire process and directly impacts future operations.

Basic Differences Between Joint Stock Company and Limited Company (Current as of 17.06.2025)

Although Joint Stock Companies and Limited Companies are capital companies regulated by the Turkish Commercial Code (TTK), there are significant structural and legal differences between them:

• Number of Partners:
  • Joint Stock Company: Can be established with a single person, and there is no upper limit on the number of partners. Partners are referred to as shareholders.
  • Limited Company: Can be established with a single person, and the maximum number of partners is 50. Partners are referred to simply as partners.
• Minimum Capital and Payment Method:
  • Joint Stock Company: The minimum capital is 250,000 TL. One-quarter (1/4) of this capital must be blocked before registration, and the remainder must be paid within 24 months following the company’s registration.
  • Limited Company: The minimum capital is 50,000 TL. It is sufficient for the capital to be paid within 24 months after the company’s registration; there is no blocking requirement at establishment.
• Share Transfer and Ease:
  • Joint Stock Company: Share transfers are generally freer and can be done through securities like share certificates or temporary certificates (ilmühaber). This allows for easier attraction of investments and changes in ownership.
  • Limited Company: Share transfers, unless otherwise stated in the articles of association, require notarization and a resolution from the board of partners, making it more difficult and formal than for a Joint Stock Company.
• Partners’ Liability:
  • Joint Stock Company: Partners are liable to the company only up to the extent of the capital shares they have committed. They are not personally liable for the company’s debts.
  • Limited Company: Partners are also liable to the company only up to the extent of the capital shares they have committed. However, partners can be held directly liable for public debts (such as taxes, SGK premiums) in proportion to their capital shares. This represents an additional area of responsibility for Limited Company partners.
• Organizational Structure and Management:
  • Joint Stock Company: Its mandatory organs are the Board of Directors and the General Assembly. The Board of Directors manages and represents the company. Board members are not required to be partners.
  • Limited Company: Its mandatory organs are the Manager or Board of Managers and the General Assembly. Managers manage and represent the company. There is no requirement for at least one manager to be a partner; they can also be appointed externally.
• Public Disclosure and Auditing:
  • Joint Stock Company: Subject to greater transparency and public disclosure obligations (e.g., independent audit requirement is more common).
  • Limited Company: Public disclosure and auditing obligations are less stringent compared to A.Ş. Independent audit requirements typically apply to Limited Companies that exceed certain criteria such as asset size, net sales revenue, and number of employees.
• Taxation:
  • Both company types are subject to corporate income tax. However, differences may arise in profit distribution and some other financial transactions, as well as in the personal income tax declarations of the partners.

Why Is Choosing the Right Company Type Important?

The choice of company type directly impacts many factors, including the business’s future growth potential, partnership structure, financial risk tolerance, and management flexibility. Selecting the wrong company type can lead to legal and financial problems in the future. For example, a Joint Stock Company may be more suitable for a company with high growth targets that plans to go public or attract large investments, whereas a Limited Company might be more practical and less administratively complex for companies with fewer partners, family businesses, or small/medium-sized enterprises.

In Summary

Establishing a company in Turkey and choosing the correct company type is one of the first and most critical steps for your business’s success. Understanding the basic differences between a Joint Stock Company and a Limited Company helps entrepreneurs determine the most appropriate legal structure for their business goals and risk profile. In this critical process, to identify the legal structure best suited to the company’s needs and to complete the establishment process flawlessly, it is advisable to seek legal support from a professional specialized in company law.