It is true say that company incorporation process in Turkey is relaxed following implementation of new Turkish Commercial Code. However, in term of time, with it is length process Turkey is still well behind from most of the European countries.
The new Commercial Code redefines some important aspects of company structure in Turkey. The New Turkish Commercial Code permits the incorporation of a joint stock company (JSC) and the limited liability company (Ltd.) with a single shareholder or partner. The New Commercial Code is also, for the first time in Turkey, defines group companies, i.e. the relations between the parent company and subsidiaries which are subject to the same principles and policies and are gathered under the same group management Under Turkish law, a company is an incorporated entity with a legal status separate and distinct from its owners / shareholders that allows it to sue and be sued in its own name.
The new commercial code provides five different company structures. These are:
- Joint Stock Companies (Anonim Şirketler)
- Limited Liability Companies (Limited Şirketler)
- Collective Companies (Kollektif Şirketler)
- Partnerships Limited by Shares (Komandit Şirketler)
- Cooperative Associations (Kooperatifler)
The main legal differences between those companies concern the allocation of liability and the legal form of the entity. However, largely due to the favourable position concerning the liabilities borne by shareholders, joint stock companies and limited liability companies are the corporate structures in Turkey most commonly chosen by foreign investors, along with the other business setup forms of branch offices and liaison offices.