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 Limited Şirket has legal personality.

(Maximum) period of existence

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

Governing document(s)

The Limited Şirket is governed by its Articles of Incorporation (AoI; Esas Sözleşme), which is registered with the 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

The liability of the shareholders is limited to their contributions of share capital, with the exception of public debts whereby the shareholders are liable with their personal assets for the unpaid public debts pro rata to their respective shareholdings (such as taxes and social security premiums).

(Governing) bodies

The Board of Managers (BoM; Müdürler Kurulu) and the shareholders voting and deliberating at the General Meeting of the 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 a Limited Şirket to be involved in international transactions and restructurings. Cross border transactions usually entail direct 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.

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

No.

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

Main Documents:

• 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 managers 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 managers (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); and
• The Incorporation Declaration Form (Kuruluş Bildirim Formu).

Involvement of notary, company register, governmental authorities

The Limited Şirket 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 during the incorporation and grant approvals to open the company’s books.

During incorporation, the signatures of authorized signatories reside in Türkiye can only be certified before the Commercial Registry officers, while those appointed after the incorporation can have their signature certified by a public notary or authorised personnel of any Commercial Registry. In addition, 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.

Timing (estimate)

The incorporation of a Limited Şirket 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 Limited Şirket 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. At least one (1) of the shareholders must be a manager with unlimited representation powers.

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

There must be at least one (1) manager, 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 50.000 (increased from TRY 10.000 to TRY 50.000 effective as of 1 January 2024). The nominal value per share must be TRY 25 or its multiples. As of 15 March 2018, the obligation to deposit 25% of the capital committed in cash to the bank account during incorporation was revoked for the Limited Şirket, and there is currently no minimum payment requirement. The share capital paid for in cash must be paid within two (2) years as of the incorporation at the latest. Additional payment requirements for the shareholders may be stipulated under the AoI.

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 power of attorney.

However, if there are non-shareholder signatories who reside in Türkiye, they must be physically present to have their signature specimen certified by the authorised personnel of the Commercial Registry during incorporation. Signature specimens of signatories in foreign countries can be certified by the Turkish consulates in that country or the competent authorities in accordance with the applicable laws of that country, and signature specimens issued by the foreign authorities must be certified by the Turkish consulates or with an apostille certification.

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 upon submission of the AoI online. After the incorporation, the Aol should complete the tax registration process.

The foreign shareholders, managers 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 the 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 by 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 a copy of their passport 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). The registry is not centralised in one (1) place, hence there are provincial offices.

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 and shareholding structure;
• Identification, nationality, and addresses of the shareholders;
• Single or multiple shareholding status of the company, including (if there is a sole shareholder) the identification, nationality, and address details of such sole shareholder;
• Identification, nationality, address and authority of the managers 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?

1 Manager/BoM (Müdür/Müdürler Kurulu). 2 The managers represent the company and must carry out management duties in the interests of the company in accordance with the TCC and the AoI. 3 Article 625 of the TCC sets the responsibilities and authority of the managers on a numerus clausus basis, including: a. The senior management of the company and give related instructions; b. Establish the managing structure of the company as per the TCC and the AoI; c. Establish necessary accounting, finance and financial auditing plans as required by the management team of the company; d. Supervise whether the persons who are granted with partial management authorities act in compliance with the laws, AoI, internal procedures and instructions; e. Except for small scale limited companies, establish an early detection and management of risk committee; f. Prepare the financial statements and annual reports, and if necessary, prepare financial statements and annual reports of the corporate group; g. Prepare the General Meeting of Shareholders and execute the shareholders' resolutions; and h. 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?

1 Initially, the first managers are appointed in the AoI during incorporation. After that, the General Meeting of Shareholders is entitled to appoint and/or dismiss members in accordance with the principles set out under the AoI. 2 Any change in the management structure and the signature authorities must be registered and announced.

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 who shall represent such 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?

1 No, there is no requirement to have non-executive managers. In principle, non-executive managers are appointed, dismissed, and replaced in the same manner as the executive managers. 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 the registration with the Commercial Registry. 2 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?

1 is the shareholders meet at a General Meeting of Shareholders (Genel Kurul). 2 The main tasks/responsibilities of the shareholders at a General Meeting of Shareholders which cannot be transferred to any other body (e.g. managers) are: a. Amendment of the AoI; b. Appointment and removal of the managers and auditors, and determining the remuneration of the managers; c. Appointment of independent auditors; d. Approval of the annual financial reports. e. Distribution of dividends; f. Approval of the share transfers; g. Filing a request with the relevant courts for the removal of a shareholder from the company; h. Authorising the managers for the repurchase of company shares or approving such transaction; i. Terminating the company; and j. Other matters stipulated under the AoI.

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 approve of matters with the majority of the votes of the shareholders present at the meeting. The TCC may require higher approval thresholds or quorum requirements for certain matters. The shareholders' resolution may be circulated in writing among the shareholders, in which case no physical meeting would be required but must be approved by all of the shareholders.

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

No.

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 managers and submitted for shareholder approval at the 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?

1 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 set 'independent auditor' requirements for companies. Accordingly, the Presidential Decree number 6364 ('Decree on Independent Audit') sets forth the companies that are subject to independent auditing. 2 In general, it is mandatory for companies to appoint an independent auditor, which itself, or together with its subsidiaries and affiliates, meets 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): a. Having total assets equivalent to or greater than 300 Million Turkish Liras; b. Having annual net sales revenue equivalent to or greater than 600 Million Turkish Lira; and/or c. Employing 150 or more employees. 3 The criteria as to the assets, sales revenues and employees is applied for unlisted public companies as follows: a. Having total assets equivalent to or greater than 30 Million Turkish Liras; b. Having annual net sales revenue equivalent to or greater than 40 Million Turkish Lira; and/or c. Employing 50 or more employees. 4 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. 5 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?

No. However, 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 as early as from their incorporation to maintain compliance with such 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, such as privilege on voting powers, receiving dividends or in connection with liquidation proceedings, and having the right to nominate managers.

What documentation is required for the transfer of ownership interests?

A share transfer requires a signed and notarized of a share transfer agreement, and the adoption of a shareholders' resolution approving the transfer and the registration of the transaction with the commercial registry. The AoI may contain transfer restrictions.

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

1 The share transfer and the transferee must be recorded in the share ledger of the company. 2 In case the share transfer changes the single or multiple shareholder status of the Limited Şirket, as applicable, the Limited Şirket 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 also be registered. 3 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 share ratio of that enterprise decreases to a ratio lower than these percentages, the enterprise is obliged to notify the subsidiary and relevant authorities, including the commercial registry, of this situation.

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

No.

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

1 The shares are issued pursuant to the registration of the initial capital or the capital increase, as applicable, with the relevant Commercial Registry. 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. 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. 2 The share capital subscribed in cash must be paid within a two (2) year period following registration of the company. If applicable, the share premiums must be paid in full before registration.

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?

1 Any kind of asset that is transferable and appraisable can be used as non-cash payment for shares in the Limited Şirket 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. 2 It is possible to require the payment of equity contributions exceeding the nominal value of shares during the issuance of shares. Share premiums must be fully paid in cash prior to registration. 2 There is no minimum payment requirement for the share capital subscribed in cash, to the extent it is paid within two (2) years of the registration at the latest. The company cannot increase its share capital until the previous capital is fully paid.

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

1 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. 2 Share repurchases are subject to there being sufficient equity. The repurchased shares cannot exceed 10% of the entire share capital unless the shares are repurchased due to the shareholder's withdrawal or dismissal from the company as stipulated by the AoI or a court decision. The upper limit is then applied as 20% instead of 10%. However, the repurchased shares exceeding the 10% threshold must be disposed of or redeemed through a capital reduction within two (2) years. The company must allocate legal reserves corresponding to the amount paid for the repurchase of the shares.

Any requirements with respect to distributions to shareholders?

The decision to distribute dividends is taken in the General Meeting of the Shareholders. No dividends can be distributed unless the legal reserves are allocated as per the TCC. The AoI may stipulate specific 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 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 Limited Şirket 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

1 With the Presidential Decree No. 7887 dated 24 November 2023, the minimum share capital requirement for limited companies has been increased from TRY 10.000 to TRY 50.000 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, requires companies that existed before 1 January 2024 to increase their share capital to at least TRY 50.000 by 31 December 2026. The Ministry of Trade is authorized to extend this deadline by one year, up to a maximum of two times. 2 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.