What Do You Understand By An LLC In Turkey?

Turkey does not have many restrictions against forming an LLC, whether it is a foreigner or a Turkish citizen. However, depending on the country of origin and type of business, a few complications can come up. Here is everything you need to know about forming an  company formation type LLC in Turkey.

Turkey is a fast-growing country with a number of opportunities for entrepreneurs. Much like any other rapidly growing country, if you are opening a company in Turkey, you have a few options in hand. The first thing you have to determine is the type of company you want to open. Most commonly, entrepreneurs in Turkey opt for an LLC, or Limited Liability Company, as the form of their organisation.

For those who are not well-versed with the term, an LLC is a legal entity that is compartmentalised from its owners, also known as the stakeholders. The primary reason why this is the more chosen form is the limited liability.

In an LLC, the members or shareholders are only liable for the amount they have invested in the company. This further ensures that their personal assets will not be affected by the organisation’s debts or legal obligations.

All LLCs in Turkey are administered and regulated by the Turkish Commercial Code and need to be registered with the Turkish Trade Registry. In addition to that, it should have at least one director and a shareholder, who can also be the same person.

A minimum capital of 10,000 Turkish Lira is required for LLC company formation in Turkey. Every LLC company in Turkey also needs to pay a corporate income tax, currently set at 20%. This tax is usually calculated after taking into account the organisation’s net profits and is paid annually to the Turkish tax authorities.

What Are Some Features Of A LLC In Turkey?

Before you start the process of an LLC company registration in Turkey, it is best you understand how it can help. To give you a better idea, here mentioned are some characteristics of an LLC in Turkey.

Trade Name

It is compulsory for every LLC in Turkey to have a trading name that is unique and not already registered with the Turkish Trade Registry.

Accounting And Reporting

All LLCs in Turkey have to keep accurate financial records and prepare annual financial statements. These statements have to be submitted to the Turkish tax authorities and Turkish Trade Registry.

Transfer Of Shares

While a Turkish LLC company is allowed to transfer its shares to third parties or other shareholders, there are certain restrictions and obligations they need to keep in mind. They also have to account for approval from the directors and all other shareholders.

Business Activities

In Turkey, LLCS is allowed to conduct a variety of business activities, each subject to specific legalities and restrictions. However, a few activities like insurance or banking require extra licenses and approvals from associated authorities.

Dissolution

After the after the establishment of an LLC in Turkey, the company can only be voluntarily dissolved by court order or stakeholders. The court order comes into play if the company has engaged in illegal activities or is insolvent.

That said, turkey can be a great place for anyone to form a new LLC, be it a foreign investor or a Turkish citizen. If the process seems confusing, you can also seek help from capable agencies who can guide you through the entire process.