JOINT STOCK COMPANIES
Joint Stock Companies are one of the most preferred company types in Turkey. Although this type of company can be established optionally for all kinds of economic purposes and issues that are not prohibited by law, it should be established compulsorily upon the request of companies such as banking, insurance, brokerage houses and investment partners, public stores, financial leasing companies, factoring companies.
WHAT IS A JOINT STOCK COMPANY?
A joint stock company is a company that can be established by one and/or more real and/or legal persons, Turkish and/or foreign, under a trade name, as public or non-public company, whose liability is limited to the capital they undertake to put in, and whose principal capital is certain. This means that if the Joint Stock Company is in debt, the liability of the partners, namely the shareholders, is limited to their shareholding ratios in the company. In other words, the partner of the company is only at risk of losing the amount of capital he has invested in the company.
There is no limit in terms of the number of partners in Joint Stock Companies.
The minimum capital in Joint Stock Companies is 50.000 TL. For non-public joint stock companies that accept the registered capital system, the initial capital may be at least 100,000 Turkish Liras. At least one fourth of the nominal value of the shares committed in cash must be paid before registration. The remaining amount is paid within 24 months following the registration of the company. The payment schedule can be regulated in the company’s articles of association, or it can be determined by the board of directors.
Joint stock companies are the only type of companies whose shares can be offered to the public and whose shares can be traded on the stock exchange.
Joint Stock Companies have two main bodies: the General Assembly and the Board of Directors.
General Assembly: As a rule, it is the body that is exclusively authorized to take some important decisions about the company (eg, changing the articles of association, election of the board of directors, election of the auditor, dissolution of the company, etc.) where all the shareholders are represented as a rule.
Board of Directors: It is the body that is primarily responsible for the management and representation of the company. It is possible for the board of directors to consist of only one member. There is no requirement for the members of the board of directors to be Turkish citizens or to be resident in Turkey.
ESTABLISHMENT OF JOINT STOCK COMPANIES
A joint stock company is established with the application to be made to the Trade Registry Directorate by gathering the above-mentioned partner(s) under a certain title and preparing the necessary documents for the establishment.
Company establishments are made through the MERSIS system in accordance with Article 4 of the Communiqué on Signing the Company Establishment Agreement at the Trade Registry Offices, published in the Official Gazette on 06.12.2016 by the Ministry of Customs and Trade.
An application is made for the establishment of a company through the MERSIS system. In the relevant application, the following information of the Joint Stock Company to be established is requested;
– The duration of the partnership
– Main activity
– Purpose and subject
– Head office address
– Share distributions
– Company official/authorities
– The nominal value of the shares and the number of shares of the partners
With this information, the company’s main contract is created. The application for incorporation of a Joint Stock Company, whose articles of association is drawn up through the MERSIS system, is sent for approval via the MERSIS system to be reviewed by the relevant and affiliated Trade Registry Offices.
If the Trade Registry Office approves the establishment of the relevant Joint Stock Company, an appointment is made for the delivery of the documents requested for the establishment of the company at https://randevu.ito.org.tr/. The documents are delivered by the founder of the company or the attorney representing the company at the Trade Registry Office on the date and time of the appointment. Upon delivery, the company is registered to the Trade Registry by the Trade Registry Office and the articles of association of the company are published in the Trade Registry Gazette; company is announced. The company is deemed to have been established with the registration and announcement of the company.
The list of documents required for the establishment of a Joint Stock Company varies depending on whether the founder is a foreign and/or Turkish real and/or legal person. Please contact our Law Office for the list of documents required for establishment.
Important Notes on the Organization
With the establishment of the company, the company is now considered a taxpayer. Accordingly, it is obligatory for the company to work with an accountant/financial advisor in order to carry out the accounting transactions of the company.
Following the establishment of the company, it is also mandatory to open commercial bank accounts of the companies.
Pursuant to Article 35 of the Attorneyship Law, it is a legal obligation to have a contracted lawyer, even if there is no lawsuit or enforcement proceeding, in the presence of a joint stock company with a capital of 250.000 TL or more. The monthly penalty for not having a lawyer for 2021 is 7155 in total. If a contracted lawyer is not present in the joint stock company throughout the year, an administrative fine of 85,860 TL is applied in total.
TERMINATION OF JOINT STOCK COMPANIES
The termination conditions of Joint Stock Companies as determined in accordance with the Law are as follows:
General Termination Circumstances
- If, despite the expiry of the period, the business does not become indefinite by actually continuing, the joint stock company is dissolved upon the expiry of the period stipulated in the articles of association.
- The joint stock company is dissolved when the subject of operation is realized or its realization becomes impossible.
- The joint stock company is dissolved upon the realization of any reason for termination stipulated in the articles of association.
- The joint stock company is dissolved with the decision of the general assembly taken with the affirmative votes of the owners or representatives of the shares constituting at least 75% of the capital.
- The joint stock company ends with the decision to go bankrupt.
- In other cases of dissolution stipulated in the laws, the joint stock company is dissolved.
Special Termination Circumstances
- If there is a shortage of organs in the company, the joint stock company is dissolved.
- Joint stock companies are terminated if there is a justifiable reason for the dissolution of the company.
Please contact our law firm for detailed information regarding the termination of the joint stock companies.
LIQUIDATION PROCESS IN CASE THE TERMINATION OF THE JOINT STOCK COMPANY
As a rule, the dissolved joint stock company enters the liquidation process. In this process, the joint stock company that continues its legal personality receives the phrase “in liquidation” in front of its title.
The duties and powers of the organs of the joint stock company in liquidation are limited.
Except for bankruptcy, the liquidation process of joint stock companies is carried out through liquidation officers. In case of bankruptcy, liquidation is carried out through bankruptcy offices.
The liquidation officer can be appointed by the articles of association or by the decision of the general assembly. Shareholders or third parties may be liquidators. Liquidation officers are registered and announced in the trade registry by the board of directors or the liquidator. In the event that the joint stock company is dissolved by the court, the court also appoints the liquidator.
Liquidators may be dismissed at any time by the general assembly and new liquidators may be appointed in their place.
Liquidators may not delegate the powers granted to them by law to others. Liquidators may authorize another liquidator or third parties to perform certain works.
Click here for more detailed information on the liquidation process.