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Introduction
The available research provides a comprehensive outline of legal requirements of Limited Liability Company formation in Turkey. Taking into account, Turkey provides a strategic and peaceful environment to domestic and foreign entrepreneurs, it is required that business lawyers, legal practitioners and investors should understand the establishment of a limited liability procedures.
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What is a limited liability company?
According to Article 573 of the Turkish Commercial Code (Numbered 6102), a limited liability company is formed by one or more real or legal persons under the umbrella of a trade name. It necessarily means that since the Code limited liability company formations is simplified by means of a single-shareholder rule. A limited company with a single shareholder can be established. However, it is also notable that the number of partners cannot exceed 50.
What is the minimum capital requirement for a limited liability company formation?
The minimum capital requirement for a limited liability company is 10.000 TRY in accordance with Article 580 the said Code. What is interesting is that capital contribution in-kind is also allowed by Article 581.
What are key responsibility norms for limited liability companies?
Fundamental feature of the responsibility clause is that the shareholders are not liable for the debts of the company. Besides, they are obligated only to pay their own capital share and to fulfill additional payment-if there is and the relevant duties set out in the articles of company contract pursuant to Article 573.
What kind of obligations are applicable to limited liability company formation contracts?
There are certain requirements for limited liability company contract:
–Contract should be written,
–Association contract must be signed by the founders in the presence of the relevant official authorized at the trade registry,
-The relevant contract is registered to the Trade Registry.
When is the limited liability company formation recognized?
According to Article 585, the limited liability company shall be recognized to be established when the founders disclose their will to incorporate a limited liability company by declaring their commitment unconditionally to pay the entire capital before the relevant official authorized at the trade registry. So, the moment of foundation for a limited liability company is recognized to start before the registry. Nevertheless, after the registration, the company shall acquire a legal personality under Article 588.
Is share transfer possible or not for limited liability companies?
Share capital transfer is possible for limited liability companies. Nonetheless, share transfer should be made in a written form. Besides, the signatures of parties must be approved by the notary pursuant to Article 595.
Conclusion
Overall, the present article presents insightful updates and thought-provoking analyses of the limited liability company formation. This research also sheds light on the significance of key legal requirements with regard to minimum capital share, minimum number of shareholders as well as founding moment of the company. In the light of the above, establishment of a limited liability company necessitates an in-depth analysis of domestic legislative regulations including Turkish Commercial Code.
