What Is Corporate Law? Legal Processes in Joint-Stock and Limited Liability Companies - Çekmeköy Corporate Lawyer

What Is Corporate Law? Legal Processes in Joint-Stock and Limited Liability Companies - Çekmeköy Corporate Lawyer Corporate law is the field of law governing a significant part of commercial life, from the establishment and management of companies to relations between shareholders, representation authority, general assembly resolutions and the termination of companies. The fundamental rules concerning commercial companies in Türkiye are contained in Turkish Commercial Code No. 6102. Under the Turkish Commercial Code, different types of commercial companies include joint-stock companies, limited liability companies, collective companies, commandite companies and commandite companies with capital divided into shares. Joint-stock and limited liability companies are capital companies and are the most commonly used company types in Türkiye. During the establishment of a company, it is important to determine the appropriate company type, prepare the articles of association, establish the shareholding structure and regulate management and representation authority. Once the company begins operating, resolutions of the general assembly and management bodies, rights and obligations of shareholders, share transfers, capital transactions and internal corporate disputes are among the fundamental matters of corporate law. Therefore, when seeking legal assistance from a Çekmeköy corporate lawyer, Istanbul corporate lawyer, Ümraniye corporate lawyer, Üsküdar corporate lawyer or Ataşehir corporate lawyer, the type of company, shareholding structure, articles of association and nature of the relevant dispute should be assessed together. What Is Corporate Law? Corporate law is the field of law governing the establishment, activities, management, representation, shareholder relations and termination of commercial companies. The legal structure of a company is not important only during its establishment. Corporate law rules continue to apply throughout the company's activities in relation to shareholders' rights, powers of managers, general assembly resolutions, capital changes, share transfers and relations between the company and third parties. The principal legislation governing corporate law in Türkiye is Turkish Commercial Code No. 6102. The Trade Registry Regulation and relevant secondary legislation are also important in company establishment and corporate operations. What Types of Companies Are Regulated Under the Turkish Commercial Code? According to information published by the Ministry of Trade, commercial companies under the Turkish Commercial Code include: Joint-stock companies, Limited liability companies, Collective companies, Commandite companies, Commandite companies with capital divided into shares. These companies are principally divided into capital companies and personal companies. Joint-stock and limited liability companies are capital companies, while collective and commandite companies are classified as personal companies. What Is a Joint-Stock Company? A joint-stock company is a capital company with a specified capital divided into shares and which is liable for its debts with its own assets. As a rule, shareholders of a joint-stock company are liable only for the capital they have undertaken to contribute and only toward the company. The company itself is liable for its debts with its own assets. Joint-stock companies may be established for any economic purpose or subject that is not prohibited by law. How Many Persons Are Required to Establish a Joint-Stock Company? The Turkish Commercial Code permits the establishment of a single-shareholder joint-stock company. Therefore, the existence of one or more founders is sufficient to establish a joint-stock company. Founders may be natural persons or legal entities. Accordingly, the law no longer requires several shareholders for the establishment of a joint-stock company. What Is the Minimum Capital for a Joint-Stock Company? Under the current rules, the minimum share capital for a joint-stock company is TRY 250,000. For non-public joint-stock companies adopting the registered capital system, the minimum initial capital is TRY 500,000. These amounts have applied since 1 January 2024. Transitional provisions and current legislation should also be considered in relation to the capital obligations of existing companies. What Are the Bodies of a Joint-Stock Company? The principal bodies of a joint-stock company are: The general assembly, The board of directors. The general assembly is the decision-making body in which shareholders are represented. The board of directors is responsible for the management and representation of the company. The distribution of authority within the company must comply with the Turkish Commercial Code and the articles of association. What Is the Role of the Board of Directors? In joint-stock companies, the board of directors is responsible for the management and representation of the company. Members of the board of directors have rights to request information, ask questions and conduct examinations regarding the company's business and transactions. Company books, records, contracts, correspondence and other documents may be subject to examination under the applicable conditions. The lawful exercise of the board's duties and powers in accordance with the articles of association is important for corporate management. What Is a Limited Liability Company? A limited liability company is a capital company that may be established under a trade name by one or more natural persons or legal entities. Under the Turkish Commercial Code, shareholders of a limited liability company are, as a rule, not liable for company debts. They are required to pay the capital contributions they have undertaken and, where provided for in the articles of association, fulfil additional payment and ancillary performance obligations. Limited liability companies may also be established for any economic purpose or subject that is not prohibited by law. How Many Shareholders Can a Limited Liability Company Have? A limited liability company may be established by one or more natural persons or legal entities. The number of shareholders cannot exceed 50. It is therefore possible to establish a single-shareholder limited liability company. What Is the Minimum Capital for a Limited Liability Company? The minimum share capital for a limited liability company is TRY 50,000. This amount was increased with effect from 1 January 2024. Current capital requirements should therefore be considered when establishing a company or planning a capital change. What Are the Bodies of a Limited Liability Company? The principal bodies of a limited liability company are: The general assembly, The manager or board of managers. The general assembly acts as the decision-making body of the shareholders, while the manager or managers are responsible for the management and representation of the company. The manner in which the company is managed and represented may also be regulated in the articles of association. Who Can Be a Manager of a Limited Liability Company? The management and representation of a limited liability company may be granted to one or more shareholders, all shareholders or third parties. However, under the Turkish Commercial Code, at least one shareholder must have the right to manage and authority to represent the company. Accordingly, a person who is not a shareholder may be appointed as manager, provided that at least one shareholder also has management and representation authority. Can a Limited Liability Company Have More Than One Manager? Yes. A limited liability company may have more than one manager. Where there is more than one manager, one of them is appointed by the general assembly as chair of the board of managers. As a rule, decisions are taken by majority. Where votes are equal, the chair has the casting vote. The articles of association may provide for a different arrangement. What Are the Differences Between Joint-Stock and Limited Liability Companies? Joint-stock and limited liability companies are both capital companies. However, they are subject to different rules regarding capital structures, corporate bodies, the legal nature of shares, management models and certain obligations. Management and representation belong to the board of directors in joint-stock companies and to the manager or board of managers in limited liability companies. The current minimum capital is TRY 250,000 for joint-stock companies and TRY 50,000 for limited liability companies. The appropriate company type should not be selected solely according to the amount of capital. The shareholding structure, investment plans, management model and long-term commercial objectives of the company should also be considered. Why Are Articles of Association Important? The articles of association are among the most important documents determining the fundamental legal structure of a company. Many essential matters, including the company's field of activity, capital, shareholding structure and management and representation arrangements, may be regulated in the articles of association. Particularly where a company has several shareholders, the articles should be prepared by considering potential future disputes between shareholders. What Should Be Considered Legally When Establishing a Company? Completing trade registry registration is not the only matter that should be considered when establishing a company. Before establishment, important matters include: Determining the appropriate company type, Planning shareholding percentages, Establishing the capital structure, Preparing the articles of association, Determining management and representation authority, Regulating the company's field of activity, Completing the necessary trade registry procedures. The Turkish Commercial Code and Trade Registry Regulation contain fundamental rules concerning company establishment procedures. What Is Representation Authority in Companies? Representation authority is the authority to carry out legal transactions with third parties on behalf of the company. In joint-stock companies, the board of directors is responsible for management and representation, while in limited liability companies this responsibility belongs to the manager or managers. Correctly determining who holds representation authority and how that authority may be exercised is important for contracts and other legal transactions carried out on behalf of the company. Can Representation Authority Be Restricted? The Turkish Commercial Code permits restrictions on representation authority under certain conditions. In joint-stock companies, registered and announced restrictions limiting representation authority to the affairs of the head office or a branch, or requiring joint representation, may be valid. Relevant provisions of the Turkish Commercial Code also apply to restrictions on the representation authority of limited liability company managers. The effects of restrictions on third parties require separate legal assessment. What Happens If a Dispute Arises Between Company Shareholders? Disputes between shareholders may arise in relation to management, profit distribution, share transfers, capital obligations, information rights, corporate resolutions or the future of the company. In resolving these disputes, the Turkish Commercial Code, the articles of association, resolutions adopted by the general assembly or management bodies and the specific circumstances of the case should be assessed together. Depending on the nature of the dispute, litigation or the use of internal corporate legal mechanisms may become necessary. Do Company Shareholders Have a Right to Information? The information and examination rights of shareholders are regulated under the Turkish Commercial Code according to the type of company. In joint-stock companies, every board member also has the right to request information, ask questions and conduct examinations concerning the company's business and transactions. The scope of information and examination rights should be assessed according to the legal status of the person making the request and the type of company. Can General Assembly Resolutions Be Challenged? Resolutions adopted by company general assemblies may become the subject of disputes where they are alleged to violate the law, the articles of association or applicable regulations. The Turkish Commercial Code regulates nullity and annulment of general assembly resolutions in joint-stock companies. Under Article 622, the provisions concerning nullity and annulment of joint-stock company general assembly resolutions also apply by analogy to limited liability companies. The legal nature of the resolution and the available legal remedy must therefore be assessed according to the specific resolution. Can Company Managers Be Held Liable? Company managers must perform their duties in accordance with the law and the company's applicable legal rules. Where management or representation authority is exercised unlawfully, managers breach their duties or transactions cause loss to the company, the legal liability of managers may arise. Whether liability exists should be assessed according to factors such as the type of company, the manager's duties, the transaction concerned, fault and the resulting damage. Can Shares in a Company Be Transferred? Shares in joint-stock and limited liability companies may be transferred, but the applicable legal process may differ according to the type of company and the nature of the shares. Before a share transfer, the articles of association, the relevant provisions of the Turkish Commercial Code and any required corporate resolutions should therefore be assessed together. Particularly where a share transfer will change the ownership structure of the company, the transaction should be examined not only as an agreement between the parties but also from a corporate law perspective. What Should Companies Consider When Preparing Contracts? During their commercial activities, companies may enter into numerous contractual relationships with customers, suppliers, employees, investors and other companies. When preparing contracts, it is important to clearly define the rights and obligations of the parties, regulate payment and delivery conditions, establish liability provisions and determine how potential disputes will be resolved. Preventive legal advice in corporate law aims not only to resolve disputes after they arise but also to prevent disputes from occurring. Are Mergers and Demergers Part of Corporate Law? Yes. Mergers, demergers and conversions of company type are important structural changes regulated under the Turkish Commercial Code. Because these transactions may significantly change the company's shareholding, capital and organisational structure, the legal process must be conducted in accordance with the applicable legislation. Why Is the Trade Registry Important in Corporate Law? Many transactions, from company establishment to changes in management and representation, are connected with the trade registry. Company establishments, certain amendments to the articles of association, authorised representatives and other matters legally requiring registration may be subject to trade registry procedures. The Trade Registry Regulation is among the fundamental regulations governing company establishment applications and registration procedures. Can Companies Hold Electronic General Assemblies? The Turkish Commercial Code introduced the possibility of participating in general assembly meetings, submitting proposals and voting electronically. There are also provisions permitting board of directors meetings to be held electronically. Electronic meeting processes must be conducted in accordance with the applicable legislation and the company's legal structure. Why Is Ongoing Legal Advice Important for Companies? A company's legal needs do not begin only when litigation arises. Establishment, articles of association, general assembly resolutions, management and representation matters, share transfers, commercial contracts, shareholder disputes and structural changes may all require legal assessment. Ongoing corporate legal advice may help identify legal risks before transactions are completed and contribute to conducting company activities in compliance with applicable legislation. Corporate Law and Commercial Disputes in Çekmeköy Companies operating in Çekmeköy may encounter various corporate law disputes during their establishment, management, shareholder relations and commercial activities. In particular: Company establishments, Articles of association, Shareholder disputes, General assembly resolutions, Management and representation authority, Share transfers, Commercial contracts, Company mergers and demergers, Liability of company managers are among the principal matters requiring assessment under corporate law. Therefore, when seeking assistance from a Çekmeköy corporate lawyer, Istanbul corporate lawyer, Ümraniye corporate lawyer, Üsküdar corporate lawyer or Ataşehir corporate lawyer, the company's existing legal structure and the nature of the dispute should be considered together. Çekmeköy Corporate Lawyer Assistance Legal assistance within the scope of corporate law may include: Planning company establishment, Preparing and reviewing articles of association, Assessing general assembly procedures, Regulating management and representation authority, Legally reviewing share transfers, Resolving shareholder disputes, Preparing commercial contracts, Assessing disputes concerning the liability of company managers, Conducting mergers, demergers and other structural changes, Handling corporate litigation. In corporate law, identifying legal risks in advance is important in addition to managing litigation after a dispute has arisen. What Should Be Considered When Choosing a Corporate Lawyer? When choosing a corporate lawyer, depending on the company's field of activity and legal needs, relevant considerations may include: Experience in corporate law, Knowledge of the Turkish Commercial Code and current legislation, Experience in commercial contracts, Experience in shareholder disputes, Knowledge of general assemblies and corporate bodies, Litigation and dispute resolution experience, A preventive legal advisory approach. Because companies have continuing legal needs, it is important to consider not only existing disputes but also legal risks that may arise in the future. Conclusion Corporate law is an important field of law governing the legal structure of companies, the rights and obligations of shareholders, management and representation bodies and numerous corporate transactions from establishment through termination. The fundamental corporate law rules in Türkiye are contained in Turkish Commercial Code No. 6102. The Turkish Commercial Code regulates joint-stock, limited liability, collective, commandite and commandite companies with capital divided into shares as commercial companies. Joint-stock and limited liability companies are the most commonly used capital company forms in Türkiye. The current minimum share capital is TRY 250,000 for joint-stock companies and TRY 50,000 for limited liability companies. The principal bodies of a joint-stock company are the general assembly and board of directors, while those of a limited liability company are the general assembly and the manager or board of managers. Correct planning of company establishment, preparation of the articles of association, determination of management and representation authority, protection of shareholders' rights, lawful adoption of general assembly resolutions and proper structuring of commercial contracts are important for the legal security of corporate activities. Therefore, matters such as corporate law, company establishment, joint-stock companies, limited liability companies, shareholder disputes, annulment of general assembly resolutions, share transfers, liability of company managers, Çekmeköy corporate lawyer, Istanbul corporate lawyer, Ümraniye corporate lawyer, Üsküdar corporate lawyer and Ataşehir corporate lawyer should be assessed according to the company's structure and specific legal needs.