CORPORATE LAW

What is Company Law in Turkey?

Company law is a branch of private law that governs all legal processes related to companies in Turkey, from their formation to their dissolution. It regulates commercial activities, partnership relations, and the rights and obligations of companies. This field is primarily shaped by the Turkish Commercial Code (TCC) and other relevant legal regulations. Its main purpose is to secure the corporate structure of businesses and to manage potential disputes between partners or with third parties within a legal framework.

The primary goal of company law in Türkiye is to ensure that commercial life operates transparently, reliably, and fairly. In this context, it regulates critical issues such as how companies are established (joint-stock, limited liability, etc.), structural changes like capital increases or reductions, the procedures for general assembly meetings, and the powers and responsibilities of board members. For instance, when a limited liability company needs to increase its capital, the process must be carried out in compliance with the procedures outlined in the TCC. Otherwise, the decisions made might be deemed invalid and could lead to legal problems.

What are the Types of Companies in Turkey?

Company law in Turkey is fundamentally divided into two main categories: capital companies and personal companies.

Capital Company Law

In this type of company, the liability of the partners is limited to the capital they have contributed to the company. The most common types are Joint-Stock Companies (A.Ş.) and Limited Liability Companies (Ltd. Şti.). Joint-stock companies can issue shares and go public, while limited liability companies are generally preferred for small and medium-sized businesses in Türkiye.

Personal Company Law

In personal companies, the partners have unlimited liability for the company’s debts. These companies are based on the personal trust and relationship between the partners. Examples of personal companies include Collective Companies and Limited Partnerships. In these structures, the partners’ personal assets can be directly affected by the company’s debts.

What Does Company Law in Turkey Cover?

Company law in Turkey covers a very broad range of topics. The main subjects include:

• Company Formation and Registration: The preparation of necessary documents based on the company type (A.Ş., Ltd. Şti., etc.), drafting the articles of association, and registration with the trade registry.
• Amendments to the Articles of Association: All kinds of changes to the company’s core information, such as its name, address, capital, or business scope.
• Capital Transactions: Financial matters like capital increases, capital reductions, and contributions in kind.
• Mergers and Acquisitions (M&A): The processes of companies merging, demerging, or one company acquiring another.
• General Assembly and Board of Directors Procedures: The procedures for convening general assembly meetings, decision-making processes, and the appointment and removal of board members.
• Share Transfers: The transfer of shares or partnership stakes and the legal consequences of such transfers.
• Dissolution of Companies: Closure processes such as company liquidation, bankruptcy, or dissolution.

For example, if a member of a company’s board of directors misuses their authority and causes a loss to the company, legal action can be taken against that individual under the framework of company law in Türkiye. This mechanism protects the rights of both the company and its partners.

What are Common Company Law Cases in Turkey?

The most common types of lawsuits under company law in Turkey include:

• Lawsuits for Annulment of General Assembly Resolutions: These are filed when resolutions passed at a general assembly are contrary to the law or the articles of association.
• Lawsuits for Exclusion or Withdrawal of a Partner: These arise from disputes during the process of a partner being excluded from the company or leaving by transferring their partnership stake.
• Liability Lawsuits Against Board Members: These are claims for damages filed when board members fail to fulfill their duties properly or intentionally cause a loss to the company.
• Unfair Competition Lawsuits: These are filed when a company acts in violation of unfair competition laws in its commercial activities.
• Lawsuits Regarding Capital Increases and Reductions: These are filed for the annulment or determination of these processes when they are not carried out according to the proper procedures.

For example, a minority shareholder in a limited liability company can file a lawsuit to have a general assembly resolution annulled if they believe it is detrimental to them. This lawsuit would be heard in a Commercial Court.

Why Choose Istanbullawoffice for Company Law Consulting in Turkey?

Company law is one of the most vital areas of a dynamic and ever-changing business world. Proactively identifying potential legal risks, drafting the right contracts, and ensuring your corporate processes comply with the law are critical for your company’s sustainability in Turkey. This is where Istanbullawoffice steps in, providing you with not just legal support, but also a strategic business partnership.

• Deep Experience and Sectoral Expertise: With years of experience, we are well-versed in every type of legal issue companies may face. From formation procedures to complex mergers and acquisitions, we offer bespoke solutions across a broad spectrum of services.
• Proactive Approach: For us, legal support doesn’t start when a problem arises—it begins before it ever does. We proactively analyze potential risks and determine strategies that will secure your company’s commercial activities.
• Transparent and Clear Communication: We explain complex legal terms in a straightforward manner and share every step with you transparently. You are informed at every stage of the legal process and make decisions with full knowledge.
• Reliable and Solution-Oriented Service: We believe in developing specialized and solution-oriented approaches for each of our clients. Our priority is to understand your company’s goals and prepare the legal groundwork that will enable you to achieve them.

To secure your business, minimize potential risks, and ensure your commercial operations run smoothly, Istanbullawoffice is always by your side.