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Essentials of Corporate Law: Unveiling Permissible Capital Investments in Turkish Company

Discover the essentials of Corporate Law in Turkey & unlock the possibilities of capital investments, options for shareholders, as outlined by the Turkish Commercial Code. From partnerships to equity, this guide unveils the legal dimensions and preferred company types in Turkey

From Theory to Practice: Mastering the Essentials of Corporate Law in Turkey

Corporate Law, categorized under private law in Turkey, is one of the main branches of Commercial Law which is regulated both by the Turkish Commercial Code and the Turkish Code of Obligations.

Five different types of trading companies are defined under the Turkish Commercial Code which constitutes the main subject of Corporate Law.

Beyond the Boardroom: Exploring the Legal Dimensions of Corporate Entities

This branch of law regulates all those five types of companies from their establishment to their dissolution including, but not limited to the qualifications of their shareholders and the members of the Board of Directors, the procedures of the meetings of the Board of Directors and the General Assembly, preparation of the Articles of Association and the amendments to it, registration of the newly formed companies to the Turkish Trade Registry, their financial statements, the contingency and the legal reserves and the companies legal and criminal responsibilities etc.

Balancing Purpose and Legality: Unraveling the Complexities of Companies in Corporate Law

When the subject is “companies”, then their mergers and acquisitions, demergers and changing of kind certainly become issues of Corporate Law as well as their branch and/or liaison office openings.

If we go into further detail, according to the Turkish Commercial Code, trading companies are legal entities which are established by one and/or more real and/or legal person, formed with a written contract and associated under a financial purpose. This purpose should not be against the law, morals, manners, and the public order.

From Partnerships to Equity: Understanding Turkey's Preferred Company Types

Companies gain “legal entity” status when the legal requirements of establishment determined by the Turkish Commercial Code specifically for each type are fulfilled and the company is registered to the Turkish Trade Registry.

Types of trading companies are determined “numerus clausus” by the Turkish Commercial Code as unlimited liability companies, commandite companies, joint stock companies, limited liability companies and cooperative companies. Among these companies, joint stock companies and limited liability companies are equity companies while the other three types of companies are partnership companies.

The most preferred company types in Turkey are joint stock companies and limited liability companies since those can be established by just one real person or just one legal entity which can be native and/or foreign and the shareholders’ responsibility against the company is restricted by the amount of the capital they invested in the company.

Exploring Permissible Capital Investments in Turkish Companies

When it comes to determining the eligible forms of capital investment for shareholders in any type of company, the 127th Article of the Turkish Commercial Code provides the necessary guidance. According to this article, unless stated otherwise by law, it specifies the permissible options for capital contributions.

  • Cash, receivables, securities, and shares belong to equity companies

  • Intellectual property rights

  • Movables and every kind of immovables

  • Rights of usage and access on movables and immovables

  • Personal work

  • Commercial Reputation

  • Commercial Enterprises

  • Assets like transmissible electronic media, domains, names, and signs which are rightfully used

  • Mining licenses and similar rights with economic value

  • Every kind of value which can be assignable and can be evaluated in cash

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