In Turkish law, although there are many types of companies, the most familiar ones are joint stock and limited liability companies. Numerous Turkish and foreign business people are in need of learning about the characteristics of these companies, the differences between them, and their advantages and disadvantages compared to the business they will do before establishing a company or investing in a company. Due to the nature of each business, of course, a detailed analysis cannot be made in the legal frame without examining the business and the desired partnership structure, but we would like to point out a few basis differences between these companies in 10 points that are at least be guiding.
| No. | COMPARING HEADINGS | JOINT STOCK COMPANY | LIMITED LIABILITY COMPANY |
|---|---|---|---|
| 1. | TYPES OF BUSINESS | According to binding laws, some types of businesses like insurance, banking, etc. have to be established as joint stock companies. Also, it can be established for any legal economic purpose. | Unless otherwise regulated by law, it can be established for any legal economic purpose. |
| 2. | NUMBER OF SHAREHOLDERS | 1 to unlimited | 1 to 50 |
| 3. | LIABILITY OF SHAREHOLDERS | Shareholders shall be solely liable to the company for the capital shares they have committed and been responsible for. | Shareholders shall be liable to the company for the capital shares they have committed and been responsible for. Also, the shareholders can be liable with their personal assets for the public debts of the company in proportion to their capital shares. It should be noted that their responsibilities may increase considering their obligation to be the manager at least one of them. |
| 4. | OBLIGATION FOR BEING A MANAGER FOR SHAREHOLDERS | Shareholders are not obliged to be manager. | At least one of the shareholders must be a manager. |
| 5. | PRESENCE OF ATTORNEY | Joint stock companies with a company capital of 250.000,00-TL and above have to work with a lawyer who is an in-house or independent legal advisor. | There is no obligation to work with a legal advisor but strictly it is advisable. |
| 6. | CAPITAL | In the basic capital system, the minimum capital is 50.000,00.-TL In the registered capital system, the minimum capital is 100.000,00.-TL. | The minimum capital is 10.000,00.-TL |
| 7. | INITIAL PUBLIC OFFERING | Joint stock companies can offer their shares to the public. | The shares of the limited liability companies are not publicly traded. |
| 8. | SHARE TRANSFER WAY | The shares of the joint stock companies can be transferred with an agreement unless otherwise stated in the articles of association of the company or stated special transferring way by any rule in their sectoral binding laws. | The transfer of shares of limited liability companies is subject to a special procedure. For the transfer of shares, a contract must be concluded before a notary public and then this transfer must be approved by the decision of the shareholders’ meeting. Also, this decision must be registered in the related trade registry office. Share transfer way in limited liability companies is more complicated compared to joint stock companies. |
| 9. | TYPES OF SHARE CERTIFICATES | The joint stock companies can issue bearer certificates or registered certificates. However, if issued bearer certificates, they have to be registered Central Registry Institution for companies whose share capital is not publicly traded. (“Merkezi Kayıt Kuruluşu” “MKK”) | The share certificates of the limited liability companies can be issued as registered certificates. |
| 10. | AMENDMENTS WAY OF ARTICLE OF ASSOCIATION | The article of association can be amended at the general assembly representing at least half of the Company’s capital and the decision shall be taken by a majority of the votes present at the meeting unless otherwise stated in the articles of association of the company. | The article of association can be amended by the votes of 2/3 of the shareholders in a positive manner unless otherwise stated in the articles of association of the company. |
Please do not hesitate to contact us to determine the type of company that best suits your business and to establish your business in an easy way.
Av. Sinem İLİKLİ
TARLAN- BAKSI AVUKATLIK BÜROSU
AV. AYLİN TARLAN- AV. DERYA BAKSI
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