One of the most popular business structures in Turkey is the limited liability corporation or LTD. Investors who establish LTDs in Turkey often own small to medium-sized enterprises, and they opt for this organizational formal structure since it is straightforward to register and manage. However, business owners should still be familiar with the registration process, associated charges, and paperwork requirements before establishing a limited liability corporation in Turkey.
Types of LTD
The private and the public limited entities are the two options available to international owners who want to establish a limited liability enterprise in Turkey. There are a few distinctions between them, but the biggest one is the scale of the firm: the publicly traded company can be utilized for large-scale operations, whilst the private firm is best for small and medium-sized firms.
Requirements for LTD
The following are the requirements to establish an LTD:
Capital
An LTD must have a basic share capital of 10,000 TRY. Net worth per unit may be greater than or equal to 25 TRY. After incorporation, the equity may be paid within two years. A particular banking account must be created in the title of the newly formed entity to receive the financial payments for the shareholding. The official trade licensing agency will need a bank statement verifying that the paid stake has been put into an account. When the firm shows the essential founding records proving that it has a legal identity, it may withdraw the initial sum.
Director
The directors make up the executive element of an LTD. The director is in charge of running the business and defending it in public. The director position may be filled by an expatriate who is authorized to operate in Turkey. A governor may also be chosen from among the non-shareholders. A decision of the general meeting may remove a director at any time.
Shareholders
An LTD’s shareholders may include both natural and legal individuals. Non-residents can also become investors and they don’t need to stay in Turkey. A company with just one stakeholder is now feasible owing to the new commercial legislation. The data of the investor must also be filed in the registrar’s office and published in the commercial registration press if the company is formed with only one investor or the shareholder’s number is reduced to one later
Liability
Unless otherwise specified in its memorandum of incorporation, an LLD’s responsibility for its commitments and duties is constrained by its assets. The company’s debts are not the investors’ responsibility.
Articles of Association
The certificate of incorporation, which serve as the company’s governing instrument, must be created to create an Ltd. Before the commercial registrar’s office, all of the investors must sign multiple versions of the articles of incorporation. The following must be included in the articles of association:
- Company’s name;
- Address;
- Primary goal and activity;
- Details of directors; and
- Capital invested.
Establishment procedure
A Central Registry Monitoring Network called MERSS is used in Turkey for all sorts of enterprises’ commercial filing procedures.
The shareholders’ preferred corporate name must be filed via MERSS, and it will, in theory, be approved digitally. The brand name is not allowed to be deceptive or unpleasant. After the commercial record department or a public official attests to the articles of the organization, the firm must apply to the appropriate tax agency to obtain a possible tax identification code. This possible tax identification number is required to create a checking account and transfer the Corporation’s share capital. It is necessary to take a letter that has been properly created by the institution where the corporation’s registered share capital is placed. The firm name, stockholders’ names, and the sums they each contributed should all be listed in this statement. Payment for the Turkish Trade Agency must be placed in the account equal to 0.04 percent of the share capital.
Required documents
The following paperwork needs to be delivered to the official trade registrar’s office after the preliminary steps are finished:
- Request form;
- Articles of association;
- Identification papers of directors;
- Acceptance letter by directors;
- Bank proof of capital submission; and
- Agreements between shareholders and the company.
The Turkish Corporate Registry Journal publishes an announcement on the establishment of the firm once the filing procedure is finished. Normally, the Ltd incorporation procedure is finished in a few weeks. As soon as the company incorporation process is finished, the Ltd must also be listed with the appropriate tax and social security departments.
