How to Establish a Sole Proprietorship (Private Company) in Turkey?

 

A Sole Proprietorship (Private Company) is a type of company that is easy to manage and can be established and closed quickly.  Because of this feature, the small size enterprises ask the question “How to Establish a Sole Proprietorship (Private Company) in Turkey?” very frequently

In Sole Proprietorship (Private Company) under Turkish system, there may be only one founder or more than one founder. In Sole Proprietorship (Private Company), the responsibilities of the partners are unlimited. The approval of all shareholders is required when a partnership share is requested to be transferred.

What are the Advantages and Disadvantages of Sole Proprietorship (Private Company) in Turkey ?

Before the question of “How to Establish a Sole Proprietorship (Private Company) in Turkey?” we need to talk about the advantages and disadvantages of choosing this type of company. It will be more advantageous for the entrepreneur to choose Sole Proprietorship (Private Company) in Turkey for business areas that will have a low business volume. Since the tax rate to be collected will increase as the turnover obtained increases, if it is thought that the 22% tax bracket will be exceeded, establishing a Limited Company in Turkey should be preferred. Since, the Income Tax is 22% in the Limited Company, while it varies between 20-40% in the Individual Company. At the same time, this progressive tax system is an advantage of the Sole Proprietorship (Private Company) for low turnover business areas. The accountant fee for the Sole Proprietorship (Private Company) is less compared to other type of companies. Additionally, Sole Proprietorship in Turkey (Private Company) can be opened and closed quickly and easily. However on the other hand, it has a lower reputation especially for banks compared to Limited Companies.  For Sole Proprietorship (Private Company), Bank transactions can take a longer time in cases such as requests for obtaining credit and using virtual pos in commercial activities.

 

Documents Required for the Establishment of Sole Proprietorship (Private Company) in Turkey

If we have decided to establish a Sole Proprietorship (Private Company) in Turkey, we need to obtain the necessary documents.

The documents are almost the same as establishing a company in Turkey.

  • Lease agreement for your workplace (title deed if the property belongs to you)
  • Certificate of residence
  • Signature statement (You need to get your signature through a notary, it does not matter which notary.
  • a copy of the Identity Card.

For finalizing the process it is recommended to seek the asistance of a lawyer or accountant.

The accountant and a lawyers needs a power of attorney obtained from a notary public on behalf of the business owner in order to continue the transactions. The accountant and a lawyers can perform its operations within 1-2 days. After the opening procedures are completed, the company is subject to inspection by the tax office. If there is no problem in the inspection, a tax certificate belonging to the company is created. In the question of How to Establish a Sole Proprietorship (Private Company) in Turkey?, there is a final condition that may vary depending on the profession. If there is an obligation to register with the Professional Chamber and Chamber of Commerce in the area, such registration should be completed.

Every company must have its own stamp. Finally, a stamp is printed and bank accounts are opened on behalf of the Sole Proprietorship (Private Company) in Turkey. Then, commercial activities can be started.

 

What are the Types of Sole Proprietorship (Private Company)?

Sole Proprietorship (Private Company) are types of companies that have legal personality and have unlimited responsibilities of partners against corporate debts. According to the Turkish Commercial Code, Sole Proprietorship (Private Company) is divided into 2: Collective Companies and Commandite Companies. In collective companies, all of the partners have unlimited liability to the company. In Commandite Companies, some of the partners have unlimited liability to the company. Those with unlimited liability are called active partners, while shareholders whose responsibility is limited by the share of capital in the company are called active partners.

 

If you wish to establish Sole Proprietorship (Private Company) in Turkey please contact us info@fo-consultancy.com



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