Limited Company

A “Limited Şirket” (Limited Şirket or Ltd. Şti.) in Turkey is a limited liability company, which is a commonly chosen legal structure for businesses in the country. Limited Şirket is known for its simplicity, flexibility, and limited liability protection for its shareholders. Here are some key features and details about Limited Şirket in Turkey:

1. Limited Liability: One of the primary features of a Limited Şirket is that the liability of its shareholders (ortaklar) is limited to the amount of capital they contribute to the company. This means that personal assets of shareholders are generally protected from the company’s debts and liabilities.
2. Minimum Capital Requirement: To establish a Limited Şirket in Turkey, there is a minimum capital requirement that must be met. The minimum capital requirement can vary and is subject to regulatory changes. As of my last knowledge update in September 2021, the minimum capital requirement was 10,000 Turkish Lira (TRY), but it’s important to verify the current requirements.
3. Number of Shareholders: A Limited Şirket can have one or more shareholders, and it is possible for a single individual to own and operate a Limited Şirket. There is no maximum limit on the number of shareholders.
4. Management: The management of the Limited Şirket is typically vested in one or more managers (müdür) who are appointed by the shareholders. The managers are responsible for the day-to-day operations of the company.
5. Corporate Governance: Limited Şirket is subject to corporate governance regulations outlined in the Turkish Commercial Code. It is required to hold shareholder meetings and comply with governance rules.
6. Shares: Unlike a joint-stock company, a Limited Şirket does not issue shares that can be freely traded on the stock exchange. Instead, it divides its capital into “quotas” (pay senedi), and these quotas represent ownership in the company.
7. Ownership Transfer: Transferring ownership in a Limited Şirket typically requires the approval of other shareholders and compliance with the provisions outlined in the company’s articles of association.
8. Name: The company’s name must include the abbreviation “Ltd. Şti.” or “Limited Şirket.”
9. Taxation: Limited Şirket is subject to corporate income tax (kurumlar vergisi) on its profits. Shareholders may also be subject to personal income tax (gelir vergisi) on their share of the company’s profits.
10. Financial Reporting: The company is required to maintain proper accounting records and prepare financial statements in accordance with Turkish accounting and reporting standards. These financial statements must be disclosed to shareholders and filed with relevant authorities.
11. Flexibility: Limited Şirket offers flexibility in terms of management and ownership. It is a popular choice for small and medium-sized enterprises (SMEs) and family-owned businesses.
12. Transfer of Shares: Shares in a Limited Şirket can be transferred to other individuals or entities, but this may require the consent of other shareholders and compliance with legal procedures
13. Dissolution: The company can be dissolved voluntarily by a shareholder resolution or involuntarily through legal proceedings. In the event of dissolution, assets are used to settle debts and liabilities, and any remaining assets are distributed to shareholders.