Private Company
A “Şahıs Şirketi” in Turkey, often referred to as a sole proprietorship or individual enterprise, is a legal form of business that is owned and operated by a single individual. Here are some key characteristics and details about Şahıs Şirketi:
Sole Ownership: A Şahıs Şirketi is solely owned by a single individual who is responsible for all aspects of the business’s operation and management. This individual is known as the “şahıs işletmecisi” or “şahıs taciri” (sole proprietor).
Limited Liability: Unlike some other business structures, a Şahıs Şirketi does not provide limited liability to the owner. The owner is personally responsible for all the debts and liabilities of the business. This means that personal assets are at risk to cover business debts.
Business Name: The business may operate under the owner’s personal name, but it can also use a trade name (işletme adı). If a trade name is chosen, it must be registered with the local Trade Registry Office.
Registration: While Şahıs Şirketi does not require formal incorporation like some other business structures, it may need to be registered with the local Trade Registry Office (Ticaret Sicili Müdürlüğü) depending on the type of activities it conducts and its annual turnover. The registration process involves obtaining a trade registry number (ticaret sicil numarası).
Business Operations: Şahıs Şirketi can engage in a wide range of commercial activities, but there may be certain restrictions or licensing requirements depending on the nature of the business.
Taxation: The income earned by a Şahıs Şirketi is generally treated as the individual owner’s income for tax purposes. The owner is subject to personal income tax (gelir vergisi) on the business’s profits.
Accounting and Reporting: While Şahıs Şirketi is not required to prepare separate financial statements, it must maintain accounting records that comply with Turkish accounting standards. These records are subject to review by tax authorities.
Financial Responsibility: The owner is responsible for the financial obligations of the business, including taxes, social security contributions, and any debts incurred during business operations.
Lack of Legal Distinctiveness: One important consideration is that Şahıs Şirketi does not have legal distinctiveness or a separate legal personality from the owner. This means that there is no separation between the owner’s personal assets and the business’s assets and liabilities.
Flexibility: Şahıs Şirketi offers simplicity and flexibility in terms of management and decision-making, as the owner has full control over the business.
It’s important to note that while Şahıs Şirketi is a straightforward and common form of business structure, it does not provide the limited liability protection that other forms, such as limited liability companies (Limited Şirket or Anonim Şirket), offer. As a result, business owners should carefully consider the financial risks and legal responsibilities associated with this structure. Additionally, regulations and requirements may change over time, so it’s advisable to consult with legal and tax advisors for the most up-to-date information and guidance when establishing a Şahıs Şirketi in Turkey.
