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Limited Company or Joint Stock Company? Critical Provisions in Company Establishment and Articles of Association Comparison of two capital companies within the scope of the Turkish Commercial Code in terms of minimum capital, number of partners, share transfer, liability for public debts and management; The establishment process and articles of association that are difficult to change later have been updated as of 2026
When establishing a company, the choice of type is often made only on cost. However, the difference between limited company and joint stock company; It directly determines the partners' personal liability for public debts, how easily shares can be transferred, whether investors can be recruited, and how a dispute between partners will be resolved. Since the beginning of 2024, a capital of at least 50,000 TL is required for a limited company and at least 250,000 TL for a joint stock company. The guide explains the legal differences between the two types, the establishment steps, and the provisions that may require consensus to be added later if they are not written into the articles of association at the time of establishment.
1. Why Is Species Selection a Legal Decision?
Limited and joint stock companies are two types of capital companies regulated in the Turkish Commercial Code (TTK). In both cases, the rule is that the partner is responsible only for the capital he has committed, not for the debts of the company. However, the legislator limited company, as a more closed structure that attaches importance to the personalities of its partners; He designed the joint stock company as a structure open to investment, where capital can change hands freely. This is the main difference; It produces different results in many areas, from share transfer to management, from public debts to ways of leaving the partnership.
A common mistake in practice is to use the ready-made articles of association template without modification during the establishment of the company. Some provisions that can be easily accepted when there are no problems between the partners may require qualified majority or even unanimity of all partners when they want to be added later, as required by law.
minimum capital 50,000 TL 250,000 TL (starting capital in registered capital is 500,000 TL)
Payment of capital There is no payment requirement before registration; all within 24 months from registration (TTK article 585) At least 25 percent of the cash shares must be transferred before registration, the remainder within 24 months (TTK article 344).
Share transfer Written and notarized contract, general assembly approval and registry registration (TTK art. 595, 598) As a rule, registered shares are freely transferable; Registration in the share ledger is required
public debts The partner is responsible for uncollectible tax and SSI debt in proportion to his capital share. The shareholder is not responsible; Board members may be liable as legal representatives
Management Manager or managers; At least one partner must have management and representation authority (TTK article 623) Board of Directors; Members are not required to be shareholders
Leaving the partnership It is possible to file a lawsuit for quitting with just cause (TTK Article 638) No dating cases; Share transfer or justifiable termination lawsuit
The most concrete difference between the two types occurs in the company's unpaid tax and premium debts. Limited company partners are directly liable for public receivables that cannot be collected from the company in proportion to their capital shares (Law No. 6183, Article 35). In a joint stock company, the title of shareholder alone does not create this responsibility; responsibility is directed to legal representatives, such as board members. For this reason, a joint stock company offers a more predictable framework in terms of personal assets for a partner who will not take part in the management of the company and will only contribute capital.
Share transfer in a limited company; It is a multi-stage process that requires a notarized contract, general assembly approval and registration in the trade registry. In joint stock companies, registered shares can be transferred without restriction unless otherwise provided for in the law or the articles of association (TCC Art. 490). The 11th Civil Chamber of the Supreme Court of Appeals, in its decision dated 21.02.2024 and numbered E.2022/4698, K.2024/1327, explained that shares of joint stock companies whose share certificates have not been printed can also be transferred with a written transfer declaration in accordance with the provisions of the assignment of receivables, but that the transfer will be valid against the company by being recorded in the share ledger. This flexibility makes the joint stock company more suitable for startups planning to take on investors.
In a limited company, a partner may ask the court to order him to leave the company if there are justified reasons and may request the real value of his share as a separation fund. There is no such case for exit in a joint stock company. The only way out for a joint stock company shareholder is to sell his share or file a lawsuit for termination for just cause together with the shareholders representing at least one tenth of the capital. In a dissolution case, the court may also decide to pay the plaintiff shareholders the real value of their shares instead of dissolving the company (TTK article 531).
1. Determining the title and field of activity: The title includes the company type and at least one field of activity; The subject of the activity should be written in a broad way to cover the work to be done in the future.
2. Preparation of the articles of association: The contract is created through MERSİS. Even if ready-made text is used, provisions specific to the partnership relationship should be added.
3. Founder signatures: In a limited company, the contract can be signed in the presence of personnel authorized at the trade registry office (TTK article 585). In cases of signature by a foreign partner or proxy, additional documents are required.
4. Capital payment: At least one quarter of the cash shares in a joint stock company are deposited into the bank account opened in the name of the company before registration. In a limited company, there is no payment requirement before registration.
5. Registration and announcement: The company acquires legal personality by being registered in the trade registry. After registration, tax office and social security registrations are completed.
It should also be taken into account in the establishment planning that there is an obligation to have a contracted lawyer in accordance with Article 35 of the Law on Law for joint stock companies above a certain capital size.
The articles of association are the constitution of the relationship between partners. Many issues outside the mandatory provisions of the law can be regulated by contract; but this opportunity is mostly limited to the moment of founding.
Records regarding share transfer: In a limited company, pre-emption, purchase and repurchase rights can be stipulated by contract. Provisions limiting the transfer of registered shares in a joint stock company must be included in the articles of association.
Right to exit and reasons for dismissal: In a limited company, the right to exit may be granted to the partner in the articles of association (TCC Art. 638/1) and the reasons for which the partner may be expelled can be stipulated by the decision of the general assembly (TTK Art. 640/1). The subsequent addition of these reasons requires the unanimity of all partners representing the capital (TTK article 621/3).
Additional payment and side performance obligations: If additional payments or certain performances other than capital will be imposed on the partners in a limited company, this must be stated in the contract.
Meeting and decision quorums: For critical decisions, quorums that are heavier than those in the law can be provided to protect the minority partner.
Representation authority: It should be clearly determined who will represent the company, up to what amount and whether alone or with a joint signature.
Non-competition and confidentiality: Limits regarding the activities of partners and managers that compete with the company should be clarified.
A separate shareholders' agreement can be made between the partners for issues that do not need to be included in the articles of association or are not wanted to appear in the public registry. This contract binds the partners to each other; However, since its impact on the company and third parties is limited, it is recommended that critical provisions be reflected in the articles of association.
Two software engineers plan to establish a technology company with equal shares. Aiming to recruit investors within the first year, the partners established a limited company due to the cost advantage and signed the ready-made articles of association, which they downloaded from the internet, without changing it. In the second year, an investment fund wanted to acquire a twenty percent share, but one of the partners stated that he would not approve the transfer process at the general assembly.
Since share transfer in a limited company is subject to general assembly approval, the opposition of one of the partners in an equal share structure can actually stop the investment. In addition, since the investor, as a limited company partner, will be responsible for the public debts of the company in proportion to his share, it often requires a joint stock company structure. In this case, the conversion of the company to a joint stock company comes to the fore and the decision to change the type again requires the consensus of the partners. If the targeted investment model had been evaluated at the establishment stage, the company could have been established directly as a joint stock company or provisions regarding transfer and investor entry could have been added to the articles of association.
Can a single person establish a company?
Yes. Both limited and joint stock companies can be established with a single partner. In a limited company, the sole partnership is registered and announced in the trade registry.
What is the legal advantage of establishing a company instead of a sole proprietorship?
In a sole proprietorship, the business owner is responsible for the debts of the business with all his personal assets. In a capital company, as a rule, liability is limited to the company's assets; Exceptions regarding public debts are reserved.
Can a limited company be converted to a joint stock company later?
Yes. A capital company can transform into another type of capital company by changing its type. In this case, the minimum capital and other conditions stipulated for the joint stock company must be met.
Can the articles of association be changed after establishment?
Replaceable; However, some amendments require qualified majority, while others require unanimity of all partners. It is often not possible to reach this majority after a difference of opinion arises among the partners.
Is it necessary for a board member to be a shareholder in a joint stock company?
No. Members of the board of directors can also be elected from among people who are not shareholders. In a limited company, at least one partner must have management and representation authority.
Choosing the type only based on cost: The possibilities of taking on investors and leaving the partnership should be evaluated from the beginning.
Signing the ready-made articles of association without changing it: Provisions such as pre-emption, right of withdrawal and authority of representation are the most difficult provisions to add later.
Not taking into account public debt liability: A limited company partner who does not participate in the management can also be pursued in proportion to his share of tax and premium debts.
Leaving the power of representation unlimited: Unlimited power of representation with a single signature may lead to transactions that are difficult to compensate for when the trust between partners is shaken.
Relying too much on the shareholders' agreement: Provisions that are not reflected in the articles of association may not be asserted against the company and third parties.
The choice between a limited company and a joint stock company depends not only on the current needs of the company; It is a long-term legal decision that also determines investor entry, disputes between partners and personal risks that may arise from public debts. Küheylan Law Firm determines the appropriate company type by evaluating the partnership structure and business model together at the establishment stage; It drafts the articles of association and, when necessary, the shareholders' agreement in a way that will resolve any disputes that may arise in the future in advance. For file evaluation, an appointment can be requested via info@kuheylanhukuk.com.
Important Legal Notice: The legal explanations contained in this guide have been prepared by Küheylan Law Firm for general information purposes and do not constitute legal advice. In company law, the provisions of the articles of association, partnership structure and periods have different results in each file; It is recommended to get support from a lawyer before taking any action. © 2026 Küheylan Law Firm. All rights reserved.
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