Català Españoll

Aricles of Incorpopration of a Turkish Limited Company

Anna Calbet Tarrida
Anna Calbet Tarrida, lawyer

In Turkey a limited liability company is supposed to be used to run only small businesses. For larger businesses people tend to use joint stock companies instead. Nevertheless while a limited company offers the same protection of a joint stock company it provides an easier way to manage the business and the day-to-day paperwork meaning lower costs.

Only few tokens as example: The joint stock company needs to have:

  • a Government Officer attending the General Assemblies;
  • a Board of Directors, with a maximum of three years term of office;
  • an auditor.

A limited company does not need such limitations specially the bizarre necessity to convene a Governtment Officer for the shareholders meeting!

You may ask yourself why people still prefer to incorporate joint stock companies instead of limited ones. The answer is simple: a wrong idea of prestige, they think a serious business needs to be run through a complicated company.


A limited company has been formed by and among the founders, whose names, residential addresses and nationalities are given respectively below, pursuant to the Turkish Code of Commerce.

[Founders names and adress]


The trade name of the Company is [•] LİMİTED ŞİRKETİ.


The main objective and scope of activity of the Company are as follows:

Should the Company intend to engage in any business activity other than those enumerated above, which the Company deems beneficial to and necessary for the Company, then the Board of Directors of the Company shall, before engaging in such business activity, put the matter to the vote at the Board of Shareholders of the Company.


The Company’s registered office is located in [•] at the address [•]. In the case of any change in the Company’s registered address, such change shall be registered with the Trade Registry Office and published in Turkish Trade Registry Gazette and also reported to the Ministry of Industry and Commerce.

Any notice made to the Company’s registered and published address shall pbe deemed to have been duly made to the Company. In case the Company moves to another location and fails to havep its new address registered with the Trade Registry Office within the legal time limit set therefore, then such failure shall constitute just cause for the termination of the Company.

The Company may open branches in Turkey and abroad, provided that the Company notifies the Ministry of Industry and Commerce in writing thereof in advance.


The Company shall exist 99 years as from the date on which its formation is legally registered. This time period may be shortened by obtaining the necessary approval from the Ministry of Industry and Commerce.


The Company’s share capital is TL [•], divided into [•] shares, each with a nominal value of TL [•].

Of the said share capital, the following amounts are fully subscribed -free of collusion- by the following shareholders: 

and one-fourth of the said share capital shall be paid in within [•] months following the formal registration and announcement of the Company’s formation and the remaining amount thereof being payable in within [•] years.

The unpaid portion of the share capital shall be paid in such manner and date as will be determined by the Board of Shareholders.

Notices regarding these payments can be made directly to the shareholders by certified mail or otherwise shall be made in accordance with these Articles of Incorporation.

In case the Board of Shareholders decides to increase the Company’s share capital, decision should be taken by the affirmative vote of shareholders holding 2/3 of the capital.


A shareholder may transfer its shares in the Company to any third party only upon approval of the Board of Shareholders.

Board of Shareholders may refuse to approve any such transfer without being obliged to state any reason for refusal.

The Company’s shareholders shall have a pre-emptive right (first option) in the case of any such transfer. 

A shareholder wishing to transfer its shares shall inform the other shareholders in writing, indicating the main details of the buyer, the price and the terms of the sell, in which case the Board of Shareholders shall, with all the costs and expenses being to the account of the shareholder wishing to sell, first ensure that the value of each such share be appraised by an independent first rank business bank or financial audit firm in no more than two months.

The value of each such share so appraised shall be notified in writing or certified mail to the other shareholders who will be entitled to acquire such shares within thirty days from the receipt by them of such notice.

In cases where the other shareholders fail to exercise their pre-emptive rights within the said time limit, such shares may be bought by the Company itself within the next 15 (fifteen) days, and in case lacking to do so, the shares could be transferred to any third party.

In cases where more than one shareholder wishes to exercise their pre-emptive rights over any shares that will be transferred, each shareholder shall be entitled to acquire shares in proportion to its share in the Company.

In the case of death, bankruptcy or insolvency of a shareholder, the other shareholders may exercise their pre-emptive rights over the shares of such shareholder.


In the event any shareholder gets the approval from the Board of Shareholders to sell utterly or partially its shares to a third party, the other shareholders are entitled to sell jointly its own shares.

The shareholders wishing to exercise this tag-along right must notify it to the seller in writing, no later than fifteen Business Days after the Board of Shareholder’s approval or after the shares could be sold according to the terms in article 7. These shareholders have the right to oblige the first seller to include in the sell its shares in the same pro rata proportion, and no less favourable price and terms.

This tag-along right will not apply when the buyer is the parent, brother, sister, daughter or son of the seller or a company in which the seller held no less than the half of the vote rights


The Company’s business activities and management shall be conducted by Manager(s). Through a resolution taken by the Shareholders, the management and representation of the company may be left to one or several Managers either partner or non-partner

The Board of shareholders will define the scope of responsibilities and powers of the Manager(s).


By the vote of the Shareholders who represent 51% or more of the paid-in capital, shareholders may, if they deem necessary, replace the manager(s) or appoint new manager(s).


The Company shall be represented and administered by the Manager(s). In order for any document and contract issued by the Company to be legally valid and binding upon the Company, such document or agreement must contain the signatures of the individual(s) who is/are duly authorized to represent the Company. Those signature holders should be established by Board of Shareholders.


An Ordinary General Meeting of Shareholders shall convene at least once a year and within three months following the end of the Company’s financial year.

Extraordinary general meetings shall be held at such times and as may be required by the Company’s business.

Any shareholder can call together at any time the Board of Shareholders by certified mail to the address of each shareholder expressing the day and hour of the meeting and the points proposed to the decisions of the Board. Such notification shall be sent no less than fifteen days before the meeting day. No valid decision shall be taken without this certified notification unless all the shareholders agree to have the meeting notwithstanding.

Unless otherwise submitted in the Articles of Incorporation and also reserving the relevant special provisions of Turkish Commercial Code, the quorum for Board meetings and decision-making for all decisions of the Board, shall require the vote of the Shareholders who represent 51% of the paid-in capital.

The Board meetings can be held anywhere in the world and decisions will be valid without meeting by mail, fax, post, e-mail, video conference or any other similar system.


Notices regarding the Company shall be published at least 15 days in advance in a newspaper circulated in the city where the Company’s Head-office is located, provided that the provisions of paragraph 4 of Article 37 of the Turkish Code of Commerce are reserved.


The Company’s financial year runs from the first of January up to and including the thirty-first of December. However, the initial financial year of the Company begins on the date the Company is legally incorporated and ends on the thirty-first of December in the same year.


The Company’s net profit is the sum remaining after the deduction of all operating expenses, as well as other amounts that the Company must pay and set aside, such as depreciations, provisions, remunerations and taxes, from the Company’s annual operating revenue, which is calculated at the end of the Company’s financial year.

Out of that net profit, five per cent shall be set aside as statutory first reserve and, after deducting this from the net profit, another amount equal to five per cent of the paid in capital will be paid out as mandatory first dividend but only if a) such an amount is available, after having deducted the amount of the statutory first reserve; and b) if all terms and condition of the company’s bank financing have been met.

The sum of the first reserve and the first mandatory dividend will be deducted from the profit. The remaining amount will be the base value for the second dividend. Ten per cent of the base value will be the second reserve. After deducting this amount, the remaining sum shall be distributed as second dividend in a manner as may be decided by the Board of Shareholders.


The first contingency reserve will set aside by the Company until the total sum reaches twenty percent of the paid-in capital and in any case shall be governed by Articles 466 and 477 of the Turkish Code of Commerce.


Matters not covered by these Articles of Incorporation shall be governed by the related provisions of the Turkish Code of Commerce and Turkish Law.


18.1. Establishment expenses

All sort of disbursement paid by the shareholders during the establishment purpose of the company shall be charged as expenditure of said company.

18.2. Managers

Mr/Mrs [•] is/are nominated as manager(s)of the company for a period of [•] years.

18.3. Representation and binding of the Company

Mr/Mrs [•]

Mr/Mrs [•]

These Articles of Association consist of 17 articles and 3 temporary articles.