According to the Turkish Commercial Code there are five different types of companies in Turkey. These are;
· Joint Stock Company
· Limited Liability Company
· Collective Company
· Limited Partnership
· Cooperative Company
Joint Stock Company, Limited Liability Company and Limited Partnership in which the capital is divided into shares Companies are the capital companies. In capital companies, shareholders are responsible against the company with the capital they have committed.
Limited Partnership and Collective Company are private company. In private company’s shareholders are second and unlimited responsible for its debts.
Establishment, basic features and operations of these companies have been edited in Number of 6102 Turkish Commercial Code. Number of 1163 The Cooperatives Codeis primarily implemented to cooperatives.
Joint Stock Companies and Limited Liability Companies are the most prevalent type of company in Turkey.Approximately 82% of all companies are limited companies, while 13% are joint stock companies and 4% are cooperatives. The total of collective and limited partnership companies is around 1%.This document also contains information about commonly used joint stock and limited liability companies.
1. Joint Stock Company
· Joint Stock Company is a company definite capital of which is divided into shares and its liability for its debts is limited with its assets.
· Shareholders are only responsible against the company with the capital shares they have committed.
· Joint Stock Companies may be established for any economic purposes and topics that is not forbidden by law.
· Joint Stock Company has a Articles of Association written and registered to the trade registry at the place where its headquarters is.
· The share capital of a Joint Stock Company cannot be less than 50.000,00-TL. (The minimum share capital of a non-public company that chooses the registered capital system is 100.000,00-TL.) At least 25% of the nominal value of the shares subscribed in cash must be paid before registration and the rest of the share capital in the following 24 months after the registration. Payment calendar as can be arranged in the company's Articles of Association can be determined by the Board of Director.
· Joint Stock Companies may issue registered and bearer shares in order to represent the shares. They may also issue bonds and similar debt instruments.
· In principle, for the transfer of shares general assembly approval is not required. Shareholders freely their share may transfer without being subject to any restrictions.
· Joint Stock Companies carrying out certain activity areas and Joint Stock Companies exceeding the threshold values of the criteria determined according to total assets, annual net sales revenue, number of employees are subject to independent audit.
· Joint Stock Companies are the only type of company whose shares are offered to public and whose shares are traded on the stock exchange.
Joint Stock Company has two bodies:
· General Assembly
It is a the exclusively authorized organ that is constituted of shareholders and decides issues such as revision of Association, election of the Board of Director/Auditor, termination of the Company.
· Board of Directors
The managing and representing body of a Joint Stock Company is its Board of Directors. A one member board of directors is permisseble. Foreigners can be appointed as board members.
2. Limited Liability Company
· Limited Liability Company is a company definite capital of which is divided into shares and its liability for its debts is limited with its assets.
· An Limited Liability Company may be established by one or more real or legal persons. Under Turkish law, the maximum number of the shareholders that an Limited Liability Company can be established is 50.
· An Limited Liability Company’s liability for its debts and obligations unless it is expressly stated in its articles of Association is limited with its assets. The shareholders are not responsible for the debts of the Limited Liability Company. The shareholders of an Limited Liability Company are personally for public debts of the company.They are jointly responsible for the taxes in proportion to their shares in the capital.
· The share capital of a Limited Liability Company cannot be less than 10.000,00-TL. It is possible to pay all of the capital brought in cash within 24 months after the registration of the company. Payment calendar as can be arranged in the company's articles of association, can be determined by the Director.
· Limited Liability Company has a articles of association written and registered to the trade registry at the place where its headquarters is.
· In Limited Liability Companies, bearer shares can not be issued.
· Limited Liability Companies cannot be offered to the public.
· For the transfer of shares general assembly approval is required in Limited Liability Company.
Limited Liability Company has two bodies:
General Assembly
It is a the exclusively authorized organ that is constituted of shareholders and decides issues such as revision of Association, election of the Director/Auditor, termination of the Company.
Director
The managing and representing body of a Limited Liability Company is its Director. A one member directors is permisseble. A person who is shareholder of the Limited Liability Company must be appointed as director. Foreigners can be appointed as Director.
3. Collective Company
· It is mandatory that a Collective Company may be established by only real person.
· Under Turkish law, the maximum number of the shareholders that an Collective Company may be established is 2.
· The partners of the Collective Company are second degree unlimited liable to the creditors of the company.
· Each partner has the right and duty to manage the company separately. However, management business may be assigned to one, several or all of the partners, either by Association or the majority of partners.
· There is no capital requirement for Collective Companies.
4. Limited Partnership
· There are two kinds of limitedpartnership company which are called ordinary limitedpartnership and limited partnershipin which the capital is divided into shares.
· The ordinary limited partnership is a private company, and the limited partnership in which the capital is divided into shares is a capital company.
· The most important feature of the limited partnership is that it has limited and unlimited responsible partners.Some partners are limited responsible, and some partners are unlimited responsible.
· A Limited Partnership can be established by at least two people, one of which is active partner (unlimited responsible) and the other one is dormant partner (limited responsible). The activepartners can only be real persons. The dormant partners can be real or legal persons.
· The responsibility of the active partner is like a collective company partner. Creditors who cannot cover their receivables from the assets of the company may apply to the active partners. Active partners manage the company.
· The responsibility of the dormant partners is limited by the amount of capital that they put or commit. Dormant partners cannot manage the company.
5. Cooperative Company
· A Cooperative Company is not a private company or a capital company, but it is a commerce company like any other mentioned companies.
· Cooperative Companies are partnerships with varying partnerships established by real or legal persons in order to provide and protect the specific economic interests of partners and especially their needs related to their profession or livelihoods by means of labor force, mutual assistance by monetary contributions, solidarity and bail.
· The Cooperative Company can be established with at least seven partners, without prejudice to special types.
· The Board of Directors consists of at least three persons who are Turkish citizens and who meet the other requirements depicted in the Law. Members of the Board of Directors may be elected for a maximum term of four years. Unless otherwise provided for in the articles of Association, they may be re-elected.
· Each partner undertakes at least one, at most five thousand shares. The value of a partnership share is 100,00-TL.
· Provided that the articles of Association contain provisions, it may be decided that the partners shall be liable to the second degree unlimited liability against the creditors of the cooperative or limited liability up to a certain amount more than the capital share they have committed.
· One or more auditors shall be elected by the General Assembly for at least one year as the supervisory body of the Cooperative Company. Auditors are required to carry the conditions of being a Board of Direction member.
· All partners, except those who were not partners three months before the general assembly, may participate in the Cooperative Company General Assembly. This requirement is not required in Building Cooperative Companies.
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