TYPE CHANGES
Only capital companies can be converted into capital companies and sole proprietorships can be converted into capital companies.
Conversion of Limited Liability Company to Joint Stock Company and Joint Stock Company to Limited Liability Company
Type change should be made over the registered capital of the company. The company that will make a change of type must take a decision. The decision must include the type change type change plan, report, determination of whether the capital of the company making the type change has been paid or not, whether it is unpaid or not, determination of the company’s equity, and if there are assets registered in the land registry, ship and intellectual property registries and similar registries, determination of their fair values, and if the last balance sheet approved by the company’s governing body, by the auditor in companies subject to audit, the CPA or Certified Public Accountant report with the approval of the capital increase Acceptance must be included.
The Articles of Association of the company to be transformed into a joint stock company with the change of type must be arranged according to the joint stock company, and its capital must be arranged according to the joint stock company.
The company changing type; The list of goods and rights registered in the land registry, ship and intellectual property registries and similar registries, and the registries in which they are registered, and the information and values of the said goods and rights regarding their records in the relevant registries, signed by the company officials, addressed to the Trade Registry Directorate, and a photocopy of the document showing that the goods and rights declared in the annex of the declaration belong to your company should be given. A separate declaration must be prepared for each authority to be notified.
As a result of the change of type, a declaration of information should be prepared for notification to the relevant directorates.
In addition, Type Change Plan and Type Change Report should be prepared.
Information required in the Type Change Report
- The purpose and consequences of becoming a joint stock company,
- The provisions for the establishment of a joint stock company have been fulfilled,
- To the articles of incorporation,
- The rate of change regarding the shares to be held by the shareholders in a joint stock company,
- Additional payment and other personal performance obligations and personal liabilities arising from the transformation into a joint stock company, if any, in relation to the shareholders,
- Liabilities for shareholders arising from the change of type,
The issues related to the change of type shall be explained in legal and economic terms by showing the justifications.
Requirements in the type change plan
- The trade name of the company before and after the change of type, its head office and information on the new type,
- The articles of incorporation,
- It should include explanations regarding the number, type and amount of shares that the shareholders will hold in the joint stock company after the change of type.
- The preparation of the Change of Type Report may be waived if approved by all shareholders.
- In addition, the branch declaration of the company undergoing a change of type must be submitted.
Transformation of sole proprietorships into limited liability or joint stock companies
Real Person Commercial enterprises can be transformed into Joint Stock Company or Limited Company by changing type. According to the company to be transformed, Limited or A.Ş. Articles of Association should be prepared and an application should be made to the Trade Registry Office together with the establishment documents.
If the main contract prepared from Mersis will be signed by the partners, the partners must be present in the relevant unit. If the contract will be signed by proxy, a wet signed power of attorney must be submitted.
CPA or SMM report and CPA / SMM activity certificate are required for the determination of the value of the assets of the commercial enterprise changing type and the equity of the enterprise.
The list of goods and rights registered in the Land Registry, Ship and Intellectual Property Registries and similar registries, which are permanently dedicated to the business changing type, and the CPA or Certified Public Accountant report including the determination of their value are required
Type change plan and report should be prepared.
Conversion of collective and commandite company types into limited liability or joint stock company
A collective or limited partnership company may be transformed into a joint stock or limited liability company. The provisions on the establishment of new joint stock and limited liability companies shall apply to such changes. However, the provisions regarding the minimum number of shareholders and capital in kind and the signing of the company agreement by the founders shall not apply.
Notarised 1 copy resolution on the acceptance of the change of type
In collective companies and limited partnership companies, the persons in charge of the management of the company shall submit the change of type plan and the articles of association of the new type prepared in Mersis for the approval of the shareholders’ meeting thirty days after the above-mentioned procedures are completed and the shareholders are given the right to examine them.
In collective companies, the change of type plan shall be approved unanimously by all shareholders. However, it may be stipulated in the articles of association that this decision may be taken with the affirmative vote of two thirds of all shareholders.
If it has not been submitted before, signature declaration under the title The Competition Authority share of four per ten thousand of the capital must be deposited to the Chamber cashier. If the company has a branch or branches registered in our directorate where the company headquarters is located or in another Trade Registry Directorate, the attached Branch information statement must be signed and submitted as an attachment to the document, and if there are no branches / branches, a signed statement that there is no branch / branches must be submitted.
Note: If there is a capital increase with the type change, documents regarding the capital increase should also be attached.
Company Mergers
Mergers can be done in two ways, the acquisition of one commercial company by another, “merger in the form of acquisition”, or the merger of commercial companies into a new company, “merger in the form of new establishment”.
Company mergers Capital companies can merge with another capital company, cooperative, collective and limited companies provided that it is the transferee company, Sole proprietorships can merge with another private company, capital companies and cooperatives provided that it is the transferee company, Cooperatives can merge with another cooperative, capital company, private company provided that it is the transferee company, and a commercial enterprise can merge with a trading company provided that it is the transferee company.
Capital companies may merge according to the simplified scheme if the acquiring capital company holds all the voting shares of the transferred capital company or if a company or a natural person or a group of persons affiliated by law or contract holds all the voting shares of the capital companies participating in the merger.
These capital companies are not obliged to prepare the prescribed merger report and provide the right of review, and may not submit the merger agreement to the approval of the general assembly.
In order for the merger to take place, the notification regarding the merger must be published in the Trade Registry Gazette 30 days prior to the date of the merger decision, and the merger agreement and the merger report must be prepared In the same announcement, it must be clearly stated that all interested parties have the right to examine the merger documents.
Proof that the transferee company can freely dispose of the debts and receivables of the transferee company The CPA or SCPA Report must be submitted.
If the transferee company is the sole legal partner of the transferee company, no capital increase or decrease is made.
The Conversion Of A Capital Company Into A Cooperative Company
A capital company (Joint Stock Company or Limited Liability Company) can be transformed into a co-operative. In such changes, the establishment provisions of the newly established co-operative shall apply. Provisions regarding capital in kind shall not apply.
The procedures regarding the change of type are stated below:
1-Type change plan
A change of type plan shall be prepared in writing by the management body of the Company.
The change of type plan shall
- a) The trade name of the company before and after the change of type, its head office and information on the new type,
- b) Co-operative agreement,
- c) Explanations on the shares that the shareholders will hold in the co-operative after the change of type and their amounts,
must be included.
2-Type change report
The management body of the company shall prepare a written report on the change of type.
In the report
- a) The purpose and consequences of becoming a co-operative,
- b) The provisions of the establishment of the co-operative have been fulfilled,
- c) The co-operative agreement,
- d) The rate of change regarding the shares to be held by co-operative members,
- e) Additional payment and other personal performance obligations and personal liabilities arising from the conversion to a co-operative in relation to the shareholders, if any,
- f) Liabilities for shareholders arising from the change of type,
The issues related to the change of type shall be explained in legal and economic terms by showing the justifications.
(With the decision of all shareholders, small and medium sized companies may waive the preparation of the conversion report).
3-The following matters shall be submitted to the examination of the shareholders thirty days before the decision is taken in the general assembly
- a) Type change plan,
- b) Change of type report,
- c) Financial statements of the last three years,
- d) If more than six months have elapsed between the balance sheet date and the date of the conversion report, or if significant changes have occurred in the assets of the company since the last balance sheet was issued, an interim balance sheet,
Copies of the aforementioned documents shall be provided free of charge to the shareholders who request them. The Company shall inform the shareholders that they have the right to inspect them in an appropriate manner.
Establishment of the Liaison Office
The Regulation on the Implementation of the Foreign Direct Investment Law stipulates certain conditions for foreign companies to establish a liaison office in Turkey. These conditions are as follows:
The company to open a liaison office must be established in the foreign country in accordance with the laws of that foreign country.
The foreign company to open a liaison office must obtain permission from the Ministry of Industry and Technology
Documents requested from the Ministry in order to obtain an Activity Permit:
– Liaison office establishment application form,
– The declaration containing the scope of the works to be carried out by the liaison office and the commitment that the office will not carry out commercial activities and the document showing the signature authority of the foreign company official signing the declaration,
– The Certificate of Activity of the foreign company certified by the relevant Turkish Consulate or in accordance with the provisions of the Convention on the Abolition of the Requirement of Certification of Foreign Official Documents prepared within the framework of the Hague Conference on Private International Law,
– Annual Report or balance sheet and income statement of the foreign company,
– The authorisation certificate to be given to the person(s) appointed to carry out the activities of the liaison office,
– Power of attorney in case the establishment procedures of the liaison office are carried out through another person.
Activity permit periods by subject
Activity Area | Features | Extension Period |
Representation and Hosting | Representation of the foreign company at sectoral organizations and relevant events, coordination and organization of the foreign company officials’ business contacts in Turkey, and meeting their office usage needs | 3+5 Years |
Supplier Control and Audit | Inspection of firms manufacturing on behalf of the foreign company within the framework of the foreign company’s quality standards, and meeting the foreign company’s product and manufacturer demands | 3+5 Years |
Technical Support | Providing training or technical support to distributors, and supporting supplier manufacturers to improve quality standards | 3+5 Years |
Communication and Information Transfer | Collecting and transferring information regarding market developments, consumer trends, sales statuses of competitor firms and distributors, and the performance of the distributor company, for the foreign company involved in business with Turkey | 3+5 Years |
Regional Management Center | Coordination and management services for creating investment and management strategies, planning, promotion, sales, after-sales services, brand management, financial management, technical support, R&D, external sourcing, testing of newly developed products, laboratory services, research and analysis, and training of employees for the foreign company’s units in other countries | 3+10 Years |
