How to Incorporate Joint Stock and Limited Companies in Turkey: Process & Key Differences

When starting a commercial activity in Turkey, choosing the right corporate structure is one of the most critical legal steps. Under the Turkish Commercial Code (TCC), the two most common and preferred capital company types are Limited Liability Companies (Ltd. Şti.) and Joint Stock Companies (A.Ş.). Corporate incorporation involves specific legal registrations before the Trade Registry Office.

1. Key Differences: LLC (Ltd. Şti.) vs. Joint Stock (A.Ş.)

• Minimum Share Capital: The minimum capital is 50,000 TRY for a Limited company and 250,000 TRY for a Joint Stock company.
• Number of Shareholders: An LLC can be incorporated with a minimum of 1 and a maximum of 50 shareholders. A Joint Stock company has no upper limit on shareholders.
• Liability of Shareholders: In an LLC, shareholders can be held personally liable for public debts (such as unpaid taxes and social security premiums) in proportion to their shareholding. In a Joint Stock company, shareholders' liability is strictly limited to their subscribed share capital (provided they are not board members).
• Transfer of Shares: Share transfers in an LLC require a notarized agreement and must be registered with the Trade Registry. In a Joint Stock company, share transfers are simpler and do not require notarization or public registration.

2. Step-by-Step Incorporation Process

The incorporation process is managed through the central online registry system (MERSİS) and involves the following phases:

1. Drafting Articles of Association: Defining the company name, business objectives, registered office, capital structure, and management organs on MERSİS.
2. Document Approvals: Obtaining official approvals and preparing the signature declarations of the corporate managers.
3. Capital Deposition: For Joint Stock companies, at least 1/4 (25%) of the cash capital must be deposited in a Turkish bank account and blocked prior to trade registration. For LLCs, this block is not required; the entire capital can be paid within 2 years.
4. Competition Authority Fee: Depositing 0.04% of the capital to the account of the Turkish Competition Authority.
5. Trade Registry Registration: Submitting all physical documents to the competent Trade Registry Office to finalize the tescil (registration).
6. Tax Office Registration: Obtaining the tax sign, notarizing commercial ledgers, and issuing signature circulars (imza sirküleri).

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