Establishing A Joint Stock Company In Turkey
The basic legal arrangements in respect of establishing a joint-stock company (JSC) under the terms of Turkish Commercial Code (TCC) are explained below.
1 - Minimum Capital Requirement
According to the former Commercial Code, joint-stock companies could only choose the basic capital system. But, the new TCC allows a registered capital system next to the basic capital system. In this regard, it is possible for non-public joint-stock companies to choose the registered capital system with the permission of the Ministry of Customs and Trade. As before, public joint-stock companies can accept the registered capital system by obtaining the permission of the Capital Markets Board of Turkey.
Within the framework of these two capital systems, the start-up capital must not be less than 50,000 Turkish Liras for those joint stock companies that apply the basic capital system and must not be less than 100,000 Turkish Liras for those which apply the registered capital system.
2 - Capital Contribution In-Kind
Cash, receivables, negotiable instruments, shares of other companies, intellectual property rights, all types of movable and immovable properties, web sites, domain names, license of mines and everything that its transferable and has a cash value can be contributed to the JSC as capital.
3 - One-Man JSC Is Possible
According to the former Commercial Code, at least five founders were required for the establishment of a joint-stock company. New TCC does not foresee a minimum number of founders. Therefore, the existence of one founder is adequate for the establishment of the joint-stock company. But, in the establishment of joint-stock company with one founder/shareholder (a one-man company), the shareholder's name, place of residence and citizenship must be registered in conjunction with the company.
4 - Turkish Authorities’ Permission
As a general rule, the establishment of joint stock companies and changes to their articles of association do not require the permit of any authority. But, due to the fields of activity which carry special importance for Turkish Economy, the establishment of several joint-stock companies are compelled to obtain the permission of Ministry of Customs and Commerce. Accordingly;
- Financial leasing companies,
- Factoring companies,
- Consumer finance and card services companies,
- Asset management companies,
- Insurance companies,
- Holding joint-stock companies,
- Exchange operating companies,
- Public Warehousing companies,
- Licensed warehousing (for agricultural products) companies,
- Specialized product market companies,
- Independent auditing companies,
- Surveillance companies,
- Companies administrating technology development zones,
- Companies subject to the Capital Markets Law,
- Companies operating free zones
are subject to the permission of the Ministry of Customs and Trade (General Directorate of Domestic Trade).
Therefore, the above-mentioned companies have to apply to the Ministry of Customs and Trade for permission before the registration of the company. Otherwise, company can not be registered by the trade registry office.
Joint stock companies other than those listed above, are not be required to obtain the permission of any authority.
5 - Establishment Documents Of JSC
Documents needed for the establishment of a JSC are as below:
- Application form,
- Company's Articles of Association,
- Declaration of the Founders,
- Valuation report (in the existence of capital commitment in-kind),
- Contracts signed with founders or third parties before the registration of the company.
6 - Points To Be Stated In The JSC's Articles of Association
According to the new TCC, following points must be stated in the joint-stock company’s articles of association:
- Trade name of the company and place where its headquarter is based.
- Business topics of the company, specified and defined in main points.
- The capital of the company; the nominal value of each share and conditions of payment.
- Types of shares (registered or bearer share certificates); privileges granted to certain shares; restrictions on the transfer of the shares.
- Any other rights and movable or immovable properties contributed to the company as capital other than cash, their value, the amount of shares they will correspond to; the amount of wages, allowance or awards that will be given to those who have contribution in the establishment of the company.
- Benefits that will be given from the profit of the company to the founders, directors and other persons.
- The number of the members of the Board of Directors (BOD) and those of whom are authorized to sign on behalf of the company.
- The announcement procedure of the general meeting of shareholders; voting rights.
- If the company is limited to a period, this period of time.
- The announcement methods of the Company.
- Types and amounts of the shares committed by the shareholders.
- Accounting period of the company.
Also, first members of the board of directors must be appointed by the articles of the association.