What is the main source of law authorising this entity form?

Turkish Commercial Code number 6102 (TCC).

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The A.Ş. has legal personality.

(Maximum) period of existence

There is no maximum period of existence. The A.Ş. may be incorporated for a definite or an indefinite period.

Governing document(s)

The A.Ş. is governed by its Articles of Incorporation (AoI; Esas Sözleşme) which is registered with the relevant Commercial Registry (Ticaret Sicil Müdürlüğü) and announced in the Turkish Commercial Registry Gazette (Türkiye Ticaret Sicili Gazetesi) along with any amendments made thereto.

Liability of incorporators / shareholders

Incorporators/shareholders are not personally liable for the debts of the company. The liability of the shareholders is limited to their contributions in share capital.

(Governing) bodies

The Board of Directors (BoD; Yönetim Kurulu) and the General Meeting of Shareholders (Genel Kurul) are the governing bodies.

Other particularities

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

• Under Turkish law and subject to the proceedings and restrictions stipulated under the TCC, it is possible for the A.Ş. to be involved in international transactions and restructurings. Cross border transactions usually entail capital investments, share transfers, share swaps and asset transfers. Turkish companies can only enter into legal mergers (whereby the acquired company ceases to exist and shall be de-registered and its assets are acquired under universal succession of title) and demergers (of all or a portion of its assets with universal succession of title to the relevant assets), and conversions (changing into another form of legal entity which is deemed the universal successor of the former entity) within the borders of Türkiye.
• The A.Ş. is usually more appropriate for M&A transactions due to its more bureaucratic management and organic structure compared to the limited company (Limited Şirket), as well as the possibility to qualify for a capital gains exemption during the transfer of share certificates, where certificates were held for a minimum of two (2) years. This is not possible for Limited Şirket shareholders.

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

Yes, the A.Ş. is the only form of entity that can be listed or publicly held in Türkiye.

Can this type of entity be used for a non-profit or charitable organization?

In principle, this is not possible since it is a commercial entity having the purpose of making profit.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

• The AoI must be submitted in electronic form via the Central Registration System (Merkezi Sicil Kayıt Sistemi – MERSİS) and a copy must be executed before the relevant Commercial Registry. It can be executed by power of attorney.
• The documents to appoint directors and authorised signatories, including their signature specimen under the company's commercial title and confirmations that they accept their appointed duties.
• The identification documents for foreign shareholders and/or directors (e.g. translated and notarised registry extracts for legal entities/passports for natural persons; potential tax identification numbers obtained in Türkiye).
• A membership form for the Chamber of Commerce (Oda Kayıt Beyannamesi).
• The Incorporation Declaration Form (Kuruluş Bildirim Formu).
• A bank letter confirming the minimum required capital is paid.

Involvement of notary, company register, governmental authorities

• The A.Ş. must be registered at the Commercial Registry. The public notary's involvement in the incorporation processes is less important now due to changes in the law, and consequently, the Commercial Registries can certify signatures for incorporation and grant approvals to open the company’s books.
• As of February 2021, the authorised signatories can have their signature certified by the public notary or authorised personnel of any Commercial Registry. In addition, the Commercial Registries will initially seek to obtain the signature data of individuals from the databases of public institutions and organisations and will record the signature specimens in the Central Registration System. If the signature data is not available or cannot be obtained from the electronic databases, then the submission of a signature specimen will be requested.
• If the company will conduct business in certain regulated industries (e.g. banks, insurance companies etc.), the incorporation of an A.Ş. may be subject to the approval or affirmative opinion of a public authority as may be required by applicable laws.

Timing (estimate)

• The incorporation of an A.Ş. is not subject to any strict waiting periods and the registration usually takes up to one (1) week, depending on the workload of the Commercial Registry.

Main costs, including registration and similar fees (excluding legal fees)

• The main costs are those concerning the registration, as well as the notary and lawyer fees along with the payment of a contribution to the Competition Authority (Rekabet Kurumu) (in an amount equivalent to 4/10.000 of the share capital).

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

• The aim and purpose of the A.Ş. must be stated in the AoI. The company must also choose a NACE code corresponding to its field of activity.

Minimum number of incorporators / shareholders and residency requirements

There must be at least one (1) incorporator/shareholder, and there is no residency requirement.

Minimum number of directors (or other applicable officers) and residency requirements

There must be at least one (1) director, and there is no residency requirement.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

The minimum share capital is TRY 250.000 (which is increased from TRY 50.000 to TRY 250.000 effective as of 1 January 2024). The company is obliged to open a bank account to deposit at least 25% of the capital committed in cash, which must be blocked in the bank account to be released following the incorporation. The rest of the payment must be completed no later than two (2) years after incorporation.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

In general, the incorporation proceedings can be carried out by virtue of a power of attorney.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

• The company is assigned a tax identification number by the Central Registration System during the submission of the AoI in the electronic environment. After the incorporation, further proceedings should be carried out with the tax offices for completion of the tax registration process.
• The foreign shareholders, directors and signatories are also required to obtain a potential tax identification number in Türkiye. The request letter must be submitted along with the notarised Turkish translation of a copy of their passport (for natural persons) or notarised Turkish translation of the commercial registry extract (for legal entities). In order to obtain a potential tax number for a legal entity, it is also necessary to obtain potential tax number(s) for the individual(s) who are fully authorized to represent that legal entity. The submissions are processed within the same day. It is possible to file the application with a power of attorney.
• As of March 2020, foreign natural persons can obtain potential tax identification numbers through the online application platform established by the Revenue Administration which requires filling an electronic form and uploading passport copies on the website. However, if the identification of the applicant cannot be confirmed through the electronic database, physical application to the tax office is still required which can be carried out via power of attorney.

What is the title of the applicable company registry?

Commercial Registry Office (Ticaret Sicil Müdürlüğü).

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.: Articles or other formation document, Articles or other formation document, Group structure, Share capital, Directors, Accounts, Insolvency, good-standing, liquidation, Liens and encumbrances on the shares, Liens and encumbrances on assets of the entity, Other (e.g. litigation, tax matters)

The information listed below must be filed at the Commercial Register and is publicly available:

• Articles of Incorporation;
• Company address;
• Share capital;
• Identification, nationality, and address details of the sole shareholder (if there is a sole shareholder);
• Identification, nationality, address details and representative authorities of the members of the BoD and non-member representatives;
• Identification of the statutory independent auditor;
• Information regarding insolvency and liquidation;
• Encumbrances on the entity;
• Decisions on establishment of branches;
• Merger, demerger, and conversion documents; and
• In the case of group companies, direct or indirect ownership changes of the controlling entity in the Turkish enterprise (above or below the share ratios of 5%, 10%, 20% 25%, 33%, 50%, 67% or 100% of the shares).

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

• BoD (Yönetim Kurulu).
• The BoD and its members represent the company and must carry out management duties in the interests of the company in accordance with the TCC and the AoI.
• Article 375 of the TCC sets the responsibilities and authority of the BoD on a numerus clausus basis, including:
• The senior management of the company and issuance of related instructions;
• Establish the management structure of the company;
• Supervise accounting and finance matters of the company, and financial planning;
• Appoint and dismiss the managers and authorised signatories;
• Supervise whether the persons who have management duties act in compliance with the laws, AoI, internal procedures and written instructions of the BoD;
• Keep the share ledger and resolution books of the BoD and General Meeting of Shareholders; prepare annual reports and submit them for the approval of the shareholders; prepare the General Meeting of Shareholders and execute the shareholders' resolutions; and
• If applicable, notify the courts regarding the company's insolvency status (i.e. the state where the company’s assets are insufficient to cover its liabilities pursuant to Article 376 of the TCC).

How are the members of the executive body appointed, dismissed and replaced?

• Initially, the first members of the BoD are appointed in the AoI during incorporation. After that, the shareholders are entitled to appoint and/or dismiss members of the BoD in accordance with the principles set out under the AoI.
• If a member of the BoD resigns before the expiry of his/her term of office, the BoD can appoint a replacement to fill the vacancy, which is to be submitted to the approval of the earliest General Meeting of Shareholders convened. The shareholders may approve the continuation of the replacement’s duties or appoint a different person, or remove the member and continue with the remainder.
• Any change in the structure of the BoD and the signature authorities must be registered with the relevant Commercial Registry.

Is it possible to appoint corporate directors or must all directors be natural persons?

Yes, legal entities can be appointed as directors. In this case, one (1) person shall represent such an entity in exercising its powers and duties as the director must be also registered at the Commercial Registry as the legal entity’s natural person representative.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

• No, there is no requirement to have non-executive directors. Non-executive BoD members are appointed, dismissed, and replaced in the same manner as the executive BoD members. However, the AoI must allow delegation of management powers to executive directors and an internal directive must be issued as per Article 367 of the TCC. The resolutions appointing the company’s representatives, and setting out their scope of authority, are subject to registration.
• A one-tier board with executive and non-executive members can be formed.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

• The shareholders meet at a General Meeting of Shareholders (Genel Kurul).
• The main tasks/responsibilities of the shareholders at a General Meeting of Shareholders which cannot be transferred to any other body (e.g. BoD) are:
• Amendment of the AoI;
• Appointment, dismissal, and release of BoD members from liability and determining their remuneration;
• Appointment of independent auditors;
• Approval of the annual financial reports;
• Distribution of dividends;
• Decision to merge, spin-off and change the company type;
• Decision to merge, spin-off and change the company type;
• Decision to sell a significant amount of company assets; and
• Decision to terminate the A.Ş. as may be permitted by law.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

In principle, the General Meeting of Shareholders can be convened by the attendance of the shareholders representing one quarter of the share capital and decisions are made by a majority of votes of the shareholders present at the meeting. The TCC may require higher quorum and approval thresholds for certain matters. It is also possible to stipulate greater quorums in the AoI.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

Publicly held companies and companies listed on the stock exchange are subject to the special governance regime set forth in Capital Markets Law number 6362 (6362 sayılı Sermaye Piyasası Kanunu) and the TCC.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

The annual financial statements must be prepared by the BoD and submitted for the approval of the shareholders at a General Meeting of Shareholders within three (3) months after the end of the financial year of the company.

Is the entity permitted to determine its own financial year?

Yes.

Is the entity subject to any statutory (external) auditor obligations?

• Yes, in accordance with Article 397/4 of the TCC, the President of the Republic of Türkiye (prior to 2 July 2018, the Council of Ministers) is authorised to determine 'independent auditor' obligations for companies. Accordingly, the Presidential Decree numbered 6364 (Decree on Independent Audit) sets forth the companies that are subject to independent auditing.
• In general, it is mandatory for companies to appoint an independent auditor, which by itself or together with its subsidiaries and affiliates meet at least two (2) out of three (3) of the following thresholds for two (2) consecutive financial years (last amended to take effect as of 1 January 2025 financial period):
• Having total assets equivalent to or greater than 300 Million Turkish Liras;
• Having annual net sales revenue equivalent to or greater than 600 Million Turkish Lira; and/or
• Employing 150 or more employees.
• The following criteria apply to unlisted public companies:
• Having total assets equivalent to or greater than 30 Million Turkish Liras;
• Having annual net sales revenue equivalent to or greater than 40 Million Turkish Lira; and/or
• Employing 50 or more employees.
• Notwithstanding the foregoing, the companies listed in Schedule I and Schedule II of the Decree on Independent Audit are also subject to independent audit, which generally consist of companies operating in licensed or regulated industries such as banks, financial institutions, energy companies, publication companies, media companies and certain publicly held enterprises, whereby the companies falling within the scope of Schedule II must also meet thresholds as to their assets, sales revenues and/or employees which varies from those described above.
• The companies which are subject to independent audit are also obliged to create a corporate website.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

Joint stock companies with a share capital equal to or exceeding five times of the minimum share capital requirement (i.e., 1.250.000 Turkish Lira as of 2024) must have a lawyer qualified to practice law in Türkiye on their payroll or retain external legal counsel as required by the Law on Attorneyship numbered 1136.

Companies are subject to tax obligations even if they are not commercially active. Therefore, it is always recommended to retain an internal or external accountant resident in Türkiye from incorporation to maintain compliance with fiscal and tax requirements.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Shares (pay or hisse).

Are different classes of ownership interests possible? If so, what are some examples of different classes?

It is possible to create privileged classes of shares with their rights defined in the AoI. These include privilege on voting powers, receiving dividends or in connection with liquidation proceedings, and having the right to nominate BoD members.

What documentation is required for the transfer of ownership interests?

If the company has issued share certificates; the shares can be transferred by way of endorsement and delivery of the share certificates. If the company has not issued any share certificates, a written agreement between the transferor and the transferee is required in order to transfer the shares. The AoI may contain transfer restrictions or a requirement for a BoD approval.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

• The share transfer and the transferee must be recorded in the share ledger of the company. The AoI may also contain the requirement for a BoD approval.
• 2 If the share prices of the transferred shares are not fully paid up, the company's approval is required. The AoI may contain other transfer restrictions in limited cases.
• With the recent legislation amendments made on 31 December 2020, the transfer of bearer share certificates is subject to the notification to the Central Registry Agency (Merkezi Kayıt Kuruluşu) by the transferee.
• In case the share transfer changes the single or multiple shareholder status of the A.Ş., as applicable, the A.Ş. must also apply for the registration and announcement of the matter. In case of a sole shareholder, the identification, nationality, and address of the sole shareholder must be registered as well.
• Also, for group companies, in case the share transfer results in an enterprise holding directly or indirectly 5%, 10%, 20% 25%, 33%, 50%, 67% or 100% of the shares, or if the ownership interest of that enterprise becomes less than these percentages, the enterprise is obliged to notify the subsidiary and relevant authorities within 10 days of the completion date of the transactions.

Are there any applicable stamp duties imposed when transferring ownership interests?

No.

How are shares issued? (including information on payment obligations, registration requirements)

• The shares are issued upon registration of the initial capital or the capital increase, as applicable, with the relevant Commercial Registry. At least 25% of the share capital subscribed in cash must be paid up before registration, and the remainder may be completed within two (2) years at the latest. If applicable, the share premiums must be paid in full before registration.
• If there is a capital increase, the General Meeting of Shareholders must adopt a resolution and the relevant article in the AoI must be amended. A Ministry Representative (Bakanlık Temsilcisi) must be present at the meeting (except for single shareholder companies that are not otherwise subjected to the required presence of the Ministry Representative). The capital cannot be increased until the previous share capital is paid in full. The newly issued shares and the holders of such shares must be recorded in the share ledger of the company.
• The share certificates can be registered, or be bearer share certificates, which must be specified in the AoI. No bearer share certificates can be issued without full payment of the share subscriptions.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

• Any kind of asset that is transferable and appraisable can be used as non-cash payment for shares in the A.Ş. except for personal effort, commercial reputation, debts not yet due, and service performance. Valuation of such assets must be made by experts appointed by competent commercial courts of first instance.
• It is possible to contribute share premiums during the issuance of shares. If the shares will be issued with share premium, the BoD must prepare a report on the reasons why the shares are contributed with share premiums and the calculation method of the share premium. This report must be registered with the relevant Commercial Registry. Share premiums must be fully paid in cash prior to registration.
• The cash capital subscriptions can be partially paid with a minimum requirement of one quarter (1/4) of the total amount. Any remaining amount must be completed within 24 months from the date of registration. In the event of a partial payment of the share capital, the following restrictions apply: (i) the company cannot increase its share capital until the previous capital is fully paid; (ii) the transfer of partially paid registered shares is subject to the company’s approval (unless the transfer occurs due to inheritance, division of matrimonial property, or enforcement proceedings); (iii) no bearer share certificates can be issued for partially paid shares.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

• Shares can be cancelled by capital reduction, which cannot take place if the assets of the company are not sufficient to satisfy the rights of the creditors.
• Share repurchases are subject to there being sufficient equity. In principle, the company can only repurchase shares paid up in full, and the repurchased shares cannot exceed 10% of the entire share capital. The General Meeting of Shareholders must authorise the BoD to accept the repurchase of shares, unless the repurchase of the shares is necessary to prevent an imminent and severe loss, in which case the BoD must inform the first General Meeting of Shareholders in writing regarding the reason and purpose of the repurchase, the amount and the payment terms of the repurchased shares.
• Article 382 of the TCC provides exceptional cases for share repurchases, including share repurchases made for capital reduction, because of a universal succession rule or statutory obligations. In these cases, or in cases where the company repurchases its shares without consideration, repurchased shares must be disposed of at the earliest opportunity, which must not exceed three (3) years, without incurring any losses to the company.
• In any case, repurchased shares in violation of the TCC must be disposed of (and pledges established thereon must be removed, as applicable) within six (6) months.

Any requirements with respect to distributions to shareholders?

The decision to distribute dividends is made at the General Meeting of the Shareholders. No dividends can be distributed unless the legal reserves are allocated as per the TCC. The AoI may have other requirements.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes. The provisions of the Shareholders Agreement must not contradict the AoI or the TCC, but additional and/or more detailed provisions are allowed. Unlike the provisions of the AoI, the Shareholders Agreement is only binding upon the contracting parties.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

The company must have a business address at its cost. The A.Ş. must hold an annual shareholders' meeting at its cost, and the company books must be notarised at the beginning of each financial year. The company must also pay a yearly membership fee to the relevant Chamber of Commerce, as well as pay all corporate and other applicable taxes.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

The corporate tax rate applicable in 2025 is 25%.

Summary of any specific matters, e.g. recent or prospective major legal developments

• In the General Meeting of Shareholders of the A.Ş. which falls within any of the below criteria, a Ministry Representative appointed by the Ministry of Trade must be present:
• General Meetings of Shareholders of companies whose incorporation and AoI amendments are subject to the approval of the Ministry of Trade;
• General Meetings of Shareholders held with the agenda to discuss a capital increase or decrease, entering into or exiting from the registered share capital system, the increase of the maximum registered capital, AoI amendments for changing the field of activity, mergers, spin-offs, or the conversion of the legal entity type;
• General Meetings of Shareholders of companies that apply the Electronic General Meeting System (Elektronik Genel Kurul Sistemi); and
• General Meetings of Shareholders (and Special Committees of Preference Shareholders) that are held abroad.

With the amendments made on 9 October 2020, single shareholder companies, except for those whose incorporation and AoI amendments are subject to the approval of Ministry of Trade, are exempted from the Ministry Representative requirement unless it is requested by the parties who called the meeting, and such request is deemed to be appropriate by the authorities appointing the Ministry Representative.

In addition, the shareholders may request the appointment of a Ministry Representative in order to hold a meeting exclusively for the election of the members of the BoD if the BoD does not exist or it is not possible to have a BoD quorum, with a petition bearing the signatures of all shareholders or their representatives certified by a public notary.

• With the Presidential Decree No. 7887 dated 24 November 2023, the minimum share capital requirement for joint stock companies has been increased from TRY 50.000 to TRY 250.000 effective as of 1 January 2024. While the initial amendment applied only to companies that will be newly incorporated, a subsequent omnibus bill published on 29 May 2024, namely the Law on Amendment of the Turkish Commercial Code and Certain Laws numbered 7511, obliges companies that existed before 1 January 2024 to increase their share capital to at least TRY 250.000 by 31 December 2026. The Ministry of Trade is authorized to extend this deadline by one year, up to a maximum of two times.
• The Communiqué on Keeping Commercial Books Not Related to the Accounting of the Business in Electronic Form published in the Official Gazette on 14 February 2025 introduced an obligation for commercial companies to keep certain non-accounting commercial books - namely, the share ledger, board of directors’ resolution book, board of managers’ resolution book, and shareholders’ resolution book - in electronic form through a system established by the Ministry of Trade. Effective 1 January 2026, the transition will be mandatory for newly registered companies and joint-stock companies with capital above a specified threshold, while remaining optional for others. However, companies that switch to the electronic system may not revert to physical books. Opening and closing approvals will not be required for books being kept electronically, and responsibility for the accuracy of these records will rest with the BoD members and company executives.