|
BUSINESS LAW
BUSINESS LAW
Business
law in Turkey
A business association is formed
when two or more persons poll their efforts, funds or property in
definite proportions for the purpose of making an economic profit. In
the Turkish legal system, business associations are governed by the
Obligations Law and mainly the Commercial Code.
Types
of corporation in Turkey
The five classes of business associations are
described in the Commercial Code:
General Partnership:
this is an association which has been established with the purpose of
engaging in commercial activities under a common trade name. Its most
important characteristic is the unlimited liability of the partners
for the debt of the association. (Kollektif sirket).
Limited Partnership: In this kind of association, some of the
partners are liable for the association's debts in the amount of
capital which they contributed, while the other partners have
unlimited liability. Those partners with unlimited liability are
called active partners and those with limited liability silent
partners. (Komandit Sirket).
Cooperative Association: This is a business association
established by persons who want jointly to supply various needs
connected with their professions, crafts, and livelihoods. Such an
association is based on the principle of mutual help and suretyship.
Although the Commercial Code mentions cooperatives, details of
cooperative associations are governed by the Cooperatives Law.
(Kooperatif Sirket).
Limited Liability Company (or Partnership with Limited Liability):
This is an association established by a minimum of two or a maximum of
fifty partners. According to a change in the Commercial Code in 1995,
the association must have a minimum capital of five hundred million
Turkish liras. The Council of Ministers is authorized to increase this
amount up to ten times. (Limited Sirket).
Corporation (or Stock Company): This is a business association
with at least five incorporators and a capital of five billion Turkish
liras. The Council of Ministers was authorized in 1995 to increase
this amount up to ten times. The incorporators my be either persons or
legal entities (Anonim Sirket).
Shares of stock will be issued to
represent the share of capital of the partners in a corporation (or
stock company). Those possessing such shares will be considered the
partners of the corporation.
The statues of a
business association will be prepared by a notary, and all business
associations will be entered in the Trade Register. In order to set up
cooperative associations or companies (Limited Liability or Stock), a
permit must be obtained from the Ministry of Industry and Commerce.
For each kind of business
association, the following points are explained in detail in the
Commercial Code: Names of business associations, bodies and persons
with administrative authority, rights and liabilities,
representational authority, central and branch offices, distribution
of profits and losses, and inspection.
Company
formation Turkey
In order to commence commercial activities in
Turkey whether by establishing a branch or company or setting up a
liaison office in Turkey a foreign investor must obtain an investment
permit from the Foreign Investment Directorate (FID), the government
entity charged with regulating foreign investment in Turkey. The
authorisation process is quite straightforward and should take no more
than 2 to 3 weeks. The minimum capital required to be brought into
Turkey by the foreign investor is US$ 50,000 and the FID is able to
authorise investments up to US$50 million.
|