[ESTABLISHING A BUSINESS ENTITY IN TURKEY] 460
ESTABLISHING A BUSINESS ENTITY IN TURKEY A. Types of Business Entities 1. Description of The Types of Entities Pursuant to Turkish Foreign Direct Investment Law, foreign investors are free to make foreign direct investments in Turkey and shall be subject to equal treatment with domestic investors. Thus, foreign-invested companies enjoy the same rights available to local companies under the Turkish Commercial Cod e (“TC C ”). The TCC provides several company structures. However, largely due to advantages regarding liabilities borne by the shareholders, investors most commonly chose between a stock corporation known as anonim şir ket which is similar to an Aktiengesellschaft under German law and to a société anonyme under Swiss or French law and limited liability company known as limited şir ket which resembles a GmbH under German law or an S.A.R.L. under French law. 2. Matters to Be Considered When Choosing Between Anonim Şi rket and Limited Ş irket
have such responsibility. According to article 553 of the TCC, board members may only be held liable for damages if they breach any obligation imposed on them by law or the articles of association of the company and if their fault or negligence caused the damage.
The
anonim
şir ket
shares are negotiable
•
usually
freely
instruments; share transfers are not subject to notarization and registration. On the other hand, any share transfer in a limited şirket requires fulfillment of execution of the share transfer agreement before a Notary Public, approval of a general assembly of shareholders and registration with the Trade Registry. therefore, • The share transfer of a limited şir ket is subject to income tax for the selling party. However, in an anonim şir ket , if share certificates are held for more than two years by the selling party, the share transfer will not be subject to income tax. • Limit ed şi rket is a simpler form of corporate ownership. There is no compulsory board of directors. The compan y’s business may be managed directly by the shareholders. It is possible to appoint one or more managing directors. For both companies General Assembly Meetings can be held electronically • It is statutory to establish companies operating in certain fields such as
Both be established with one or more shareholders. companies can
•
• Both companies, in theory, are solely liable for their debts and liabilities with their assets. However, shareholders and directors of a limited şi rket are responsible with their personal assets for the tax liabilities and social security contributions which may not be collected from the company. On the other hand, shareholders of an anonim şir ket who are not board members do not
ILN Corporate Group – Establishing a Business Entity Series
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