How To Establish A Limited Liability Company In Turkey?
Establishing A Limited Liability Company In Turkey
Turkish Tax News, 23 June 2016
Limited liability company is the most common type of equity capital companies in Turkey. In terms of the new Turkish Commercial Code (TCC) limited liability company (LLC) is quite justified to the joint-stock company. Thus, LLC can be assumed as a little joint-stock company under the new legislation. The basic legal arrangements regarding the establishment and management of a limited liability company in Turkey are explained below.
1 – Minimum Capital Amount
Minimum capital requirement for the establishment of a limited liability company was stated as 5,000 Turkish Liras by the former Commercial Code No. 6762. According to new TCC, LLC’s capital must be at least 10,000 Turkish Liras.
2 – Contribution of Virtual Environments As Capital
Cash, receivables, negotiable instruments, shares of the other companies, the intellectual property rights, all types of movable and immovable properties, web sites, domain names, license of mines and everything that its transferable and has a cash value can be contributed to the LLC as capital. However, personal effort, commercial reputation and outstanding receivables are not permitted to be capital.
3 – One-Man LLC
According to former Commercial Code, at least two founders were needed for the establishment of a LLC. The new TCC doesn’t foresee a minimum number of founders. Therefore, the existence of one founder is adequate for the establishment of a LLC. But, in the establishment of joint-stock company with one founder/shareholder (a one-man company), the shareholder’s name, place of residence and citizenship must be registered in conjunction with the company.
On the other hand, like the former Commercial Code, the new TCC is limiting the number of the shareholders of the limited liability companies. Thus, the number of founders or shareholders can not be more than fifty.
4 – Establishment Documents Of LLC
Documents needed for the establishment of a LLC are as below:
- Application form,
- Company’s Articles of Association,
- Declaration of the Founders,
- Valuation report (in the existence of capital commitment in-kind),
- Document showing the authorized persons and auditors of the company.
5 – Main Points To Be Stated In LLC’s Articles of Association
According to the new TCC, following points must be stated in the limited liability company’s articles of association:
- Trade name of the company and place where its headquarter is based.
- Business topics of the company, specified and defined in main points.
- The basic capital of the company, number of shares, the nominal value of each share, privileges granted to certain shares or group of shares.
- The managers’ names, surnames, titles and citizenships.
- The announcement methods of the company.
- If so, cost of the goods bought by the founders in respect of establishing the company and benefits that will be given to those who have contribution in the establishment of the company.