articles of incorporation – Muhasebe News

Basic Information about Corporation According to Turkish Code of Commerce

MuhasebeNews — Mon, 22 Oct 2018 13:25:59 +0000

1- What does “Corporation” Mean?
Corporation means a company whose capital is specified and shared and which is in charge of its own assets because of its debits. (Article 329 of the Turkish Code of Commerce)

2- What is the field of activity of a Corporation?
Corporations can be found for all kinds of economic goals and subjects that are not forbidden by law. (Article 331 of the Turkish Code of Commerce)

3- What is the minimum amount of capital for Corporations?
The original capital referring to the committed capital in articles of incorporation cannot be less than 50.000 Turkish Lira. On the other hand, the initial capital in non-public corporations, who accept the registered capital system showing maximum realm of authority given to Board of Directors for capital increase, cannot be less than 100.000 Turkish Lira. (Article 332 of the Turkish Code of Commerce)

4- How many partners are needed in order to establish a Corporation?
There should be one or more than one founders in order to establish a Corporation. (Article 338 of the Turkish Code of Commerce)

5- When should a Corporation make payments for capital in cash?
25% of par value of subscribed capital in cash should be paid before the registration and the rest should be paid within 24 months after the registration. However, the absolute amount of premiums on issued shares should be paid before the registration. (Article 344 of the Turkish Code of Commerce)

6- What is the borrowing prohibition of Corporation shareholders?
Shareholders cannot become indebted to the company until they fulfill liabilities due (which come out because of capital subscription) and the profit of the company (with free reserves) becomes equal to losses of previous periods. (Article 358 of the Turkish Code of Commerce)

7- Members of the Board of Directors in Corporations
There are one or more than one members in the Board of Directors who are appointed with the articles of incorporation or by the Board of Directors. (Article 359 of the Turkish Code of Commerce)

8- What is the term of Office of Board of Directors?
The term of office of Board of Directors should be maximum 3 years. Unless indicated otherwise in the articles of incorporation, the same person can be appointed again. (Article 362 of the Turkish Code of Commerce)

9- Can a member of the Board of Directors be suspended from his/her duty earlier?
Even if they are appointed with the articles of incorporation, members of the Board of Directors can be suspended from their duties earlier on condition that there is a provision related to the agenda or there is a justified reason (even if there is no provision related to the agenda). Legal entity who is a member of the Board of Directors can change the person being the representative on behalf of it. (Article 364 of the Turkish Code of Commerce)

10- Which Board Administrate the Corporation?
A Corporation should be administrated and represented by the Board of Directors. (Article 365 of the Turkish Code of Commerce)

Source: the Turkish Code of Commerce Numbered 6102

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

What is Joint Stock Company?

MuhasebeNews — Sat, 17 Mar 2018 06:00:35 +0000

1- WHAT IS JOINT STOCK COMPANY?
1.1- Joint-stock company is a company whose capital is declared and divided into shares and who is only responsible for its assets because of its debts.
1.2- Shareholders are responsible to the company with their shares that they undertake.

***Except special provisions, these parts of provisions are applied to joint stock companies being subjected to special provisions.

2- WHAT ARE INCLUDED IN THE SUBJECT OF JOINT STOCK COMPANIES?
Joint stock companies can be established for every kind of legal economical purposes and subjects.

3- WHAT SHOULD BE THE AMOUNT OF CAPITAL IN ORDER TO ESTABLISH A JOINT STOCK COMPANY?
3.1- Registered capital, which is undertaken as a whole in articles of incorporation, cannot be less than 50.000 Turkish Lira. As for non-public joint stock companies which accepts registered capital system showing the maximum realm of authority of board of directors for capital increase, initial capital cannot be less than 100.000 Turkish Lira. Minimum capital amount can be increased by the Council of Ministers.
3.2- Within the scope of this law, initial capital in joint stock companies with registered capital is compulsory to provide in the establishment and when they move into this system. On the other hand, issued capital represents the total amount of nominal value of issued shares.
3.3- Unless non-public joint stock companies have necessary conditions, they are able to log out of registered capital system by getting permission from Ministry of Customs and Trade. Moreover, if they fail to fulfil the conditions while logging in the system, they can be logged out of the system by the Ministry even if they have no claim.

***Provisions of article 12 of Capital Market Law dated 28.07.1981 and numbered 2499 are reserved.

Source: Turkish Commercial Code

What is the Partnership and Capital Structure in Limited Companies?

MuhasebeNews — Mon, 03 Jul 2017 14:26:37 +0000

1- WHO CAN ESTABLISH A LIMITED COMPANY?
Limited Companies are established by one or more than one real person or legal entity under a commercial name. The original capital should be determined and that capital consists of total amount of capital stocks. Shareholders are not responsible for company debts. They are responsible for paying capital stocks that they undertake and fulfilling additional payments and subsidiary liabilities that are provided in the articles of incorporation. A limited company can be established for every kinds of economical purpose and subject that are not forbidden by law.

2- HOW MANY SHAREHOLDERS CAN ESTABLISH A LIMITED COMPANY?
It can be a one-man company; however, the number of shareholders should be maximum 50. The company can turn into one-man company afterwards. In this case, this fact should be notified to directors within 7 days. After this notification, directors are supposed to enroll and declare that company has been turned into one-man company. Company cannot acquire its own share in order to be the sole shareholder.

3- WHAT SHOULD BE THE AMOUNT OF CAPITAL OF A CO. LTD?
Minimum amount of capital in limited companies should be at least 10.000 TL and a a share should be at least 25 TL and the multiples of it.

Source: Turkish Code of Commerce

What is the Liquidation Process in Corporations?

MuhasebeNews — Thu, 29 Jun 2017 11:42:12 +0000

If the following conditions are fulfilled, Corporations will go into liquidation.
1- Despite of expiry, unless Corporation virtually stays in business and the business hasn’t been turned into indefinite period and anticipated period of time in articles of incorporation expires.
2- If the field of operation actualizes or the actualization becomes impossible.
3- If one of sunset clauses stated in articles of association takes place.
4- With the general assembly resolution in accordance with 3rd and 4th clauses of article 421.
5- If there is a decision to go into liquidation.
6- Conditions anticipated by laws.

Source: Turkish Code of Commerce