Types of Companies in Turkey
Choosing the right company structure is one of the first material decisions a Turkish business will make. The Turkish Commercial Code groups companies into two broad categories — personal companies and capital companies — and the choice carries through to liability, minimum capital and tax exposure.
Company Types
Personal Companies
- Ordinary partnership
- General partnership
- Limited partnership
Capital Companies
- Joint-stock company (anonim şirket)
- Limited liability company (limited şirket)
- Cooperative
- Limited partnership with capital divided into shares
Liability for Corporate Debts
The cornerstone distinction: personal companies do not have separate legal personality, so the partners are personally liable for company debts in the first instance.
Joint-Stock Company. Shareholders’ liability is limited to the capital they have committed.
Limited Liability Company. Members have no personal liability for ordinary corporate debts, but they are directly liable in proportion to their capital share for public-law debts — including tax and social security obligations.
Minimum Capital Requirements
| Company Type | Minimum Capital |
|---|---|
| Joint-Stock Company | TRY 50,000 |
| Limited Liability Company | TRY 10,000 |
| Personal Companies | None |
Taxation on Share Transfers
Joint-Stock Companies. Shareholders are not taxed on share transfers made more than two years after acquisition.
Limited Liability Companies. Members are taxed on share transfers without any time-based exemption, which can be a meaningful drag on exit returns.
Conclusion
The right choice depends on the relationship between the partners, the activities the business will undertake, short- and long-term plans, and the financial position of the founders. The trade-off most founders eventually weigh is between the lower formation cost of a limited liability structure and the cleaner share-transfer tax treatment of a joint-stock company.