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Association for a Company in Turkey
Turkey has a favorable business environment, with owners being incentivized for conducting their businesses in a certain way. The process of establishing a company and forming an association for a company in Turkey is also quite simple whether you’re a native or a foreigner.
The existence of additional provisions, subsidiaries, and several other beneficial arrangements only make it more lucrative to start and run a business in Turkey.
If you’re a foreigner looking to grab business opportunities in Turkey, doing certain things prior to committing to a business will prove to be of great use and advantage. You should first familiarize yourself with the country’s market and make acquaintance with professional accountants and lawyers familiar with the due diligence requirements forming an association for a company in Turkey.
What are the Articles of Association for a Company in Turkey?
The Articles of Association are obligatory documents that are required to incorporate a company. The Articles of Association state the norms about the association for a company in Turkey and are required for both the types of companies in Turkey, namely the Joint-Stock Company type, and the Private Limited Liability Company type.
Hiring a legal service-providing firm that is adept at creating such documents will help you create perfect documentation relevant to the company’s operations, the company’s future legal entity, shareholders and their rights, business scope, and activity.
Information regarding the company’s name and details about its founders, such as; names, addresses, nationalities, etc., is mentioned in the Articles of Association, apart from having details written about its registered offices and locations.
These documents also possess bylaws that provide legal guidelines to a company. They must be provided in order to comply with the Turkish Commercial Code, which is governed by the Ministry of Trade.
Information about the Company’s Shares and Shareholders in Turkey
The bylaws mentioned in the Articles of Association for a Company in Turkey also carry information about the company’s share capital, the nominal value of shares, the record of subscribed amounts, and the types and number of shares owned by the shareholders.1
A company can also state the dividend payment method and the transfer of shares within the articles. Still, it’s applicable only for specific Joint-Stock Companies that offer their shares to the public and are listed on the Stock Exchange market of Turkey.2
The additional information that the Articles of Association for a Company in Turkey contain refers to details about the Board of Directors (BoD) and the number of mandatory meetings they must conduct during the financial year, and the auditing and reporting requirements necessary for the established company in Turkey.
Furnishing Laws for Articles of Association for a Company in Turkey
Before understanding the steps, you need to follow to form the Articles of Association for a Company in Turkey, you’ll need to have the following documents notarized and ready for submission. Do hire help from a legitimate legal firm experienced and skilled in preparing such documents for the company.
- The original document of the Articles of Association and its three notarized copies,
- Two copies of the Signature Documents,
- Two copies of the identification documents of the firm managers,
- One copy of the passport of each foreign shareholder,
- Three copies of the notification form of establishment,
- Original Receipt of payment of 0.04% capital for Competition Authority from Ziraat Bankasi,
- Certificate of Deposit of minimum capital (10,000.00₺ for LLC, 50,000.00₺ JSC).
- Company’s Certificate of Registration for Tax Number.
Note: You should notarize all the documents stated above along with their respective copies.
With the documents prepared, depending on the type of entity governing the company and investors’ role, some steps may differ from the given procedure. However, these steps are generally summarised to provide enough detail to familiarize yourself with the ordeal of acquiring the Articles of Association for a Company in Turkey.
- Gathering and notarizing shareholder identity documents (Applicable to foreign individuals),
- Procuring investment decision and apostille certificate (translated to Turkish, notarize the translation too) from a foreign company (when a foreign company becomes shareholder for a Turkish company),
- Opening temporary capital advance blockade account at a Turkish Bank (Shareholders/representatives must be present before the bank during the opening of the account),
- Obtaining a draft of Office Lease Contract for the valid legal proof of Company Address,
- Drafting Article of Association (Certificate of Incorporation) via submission of the required information and documents using the online registration system,
- An application to the Chamber of Commerce Trade Registry for registering the company,
- Company Management Appointment,
- Notarizing the company’s legal and accounting books,
- Registration to Turkish Tax Office (involves on-site visit of tax officials),
If you want to learn more information about corporate tax in Turkey, check out our other article about; “Corporate Taxation in Turkey” and learn more information about the matter.
Though at a glance, these procedures may appear lengthier or perhaps even overwhelming, the due procedure required for furnishing the Articles of Association for a Company in Turkey can be done smoothly by hiring a legal firm in Turkey. Such firms may help you understand the different levels of authorizations required to submit the specific application documents, like the capital deposit certificate obtained from the bank and other similar documents, etc.
Additional Types of Companies that Qualify to Become an Entity in Turkey
Among the various types of companies that can be formed other than the LLC & JSC, the Turkish Laws also recognizes two kinds of commercial partnerships, which are:
Collective Company Type
Such partnerships maintain that all the members are wholly liable for any debts and obligations to the company while possessing all the rights equally.
Commandite Company Type
It’s formed by a general partner that is fully liable for the obligations and debts but possesses decisional powers over the silent partners. The latter is only liable for the obligations and debts in capacity to the capital they contribute.
The existence of ordinary partnerships is not forbidden by the Turkish Trade Ministry, even though the latter may not consider the former legal entities.
Final Words and Conclusions on; “Association for a Company in Turkey”
To ensure proper results, whether you have a parent company as the shareholder or not, these steps are usually followed to the point. The whole process could take less time when the documents you have submitted are correct and do not require corrections.
The overall association for a company in Turkey procedure or incorporation may take five working days to be processed before you get a legal response.
If you are curious about other types of investment opportunities in Turkey, check out our article about; “Types of Investment Funds in Turkey.”