You may find the brief memorandum below which explains the legal status of incorporating a joint stock company by way of conversion from a limited liable company in the system of the Turkish Commercial Code (“the TCC”) and the procedure if such conversion is to be resolved.
In line with the Article 152 of the TCC, the procedure of incorporating a commercial company by way of conversion from another type of company is subject to incorporation procedure of the new company. Therefore, incorporation procedure for a joint stock company shall be applied in case it is resolved to incorporate a company by way of conversion from a limited liable company.
According to the provisions of the TCC, a limited liable company shall be incorporated with 2 shareholders and a capital of TRY 5,000 at the least however a joint stock company shall be incorporated with 5 shareholders and the capital to be undertaken shall not be less than TRY 50,000. Therefore, prior to the conversion transactions, number of the shareholders of the company shall be increased to 5 and the capital shall be increased to TRY 50,000.
Following the fulfillment of the liabilities regarding shareholders and capital, below said transactions shall be executed regarding way of conversion;
- Resolutions shall be settled by the Partner’s Assembly regarding the incorporation by way of conversion and registration of the related amendment in the Articles of Association of the company. According to the Article 513 of the TCC, in case a higher quorum is not designated in the Articles of Association of the Company, a Partner’s Assembly resolution shall be settled with the votes of the shareholders that represent 2/3 of the capital,
- A court judgment that rules to determine the equity capital of the company,
- Preparation of the amendments in the Articles of Association and approval of such amendments before the Notary,
- Application to the Trade Registry with the Articles of Association and other necessary documents and registration of the amended Articles of Association in the Trade Registry Gazette,
- Application to the related Tax Office following the transactions executed for the registration and announcement of the company.
Transactions for incorporation by way of conversion may be performed within 1-2 months period however the whole process may not exceed 3 months period under all circumstances.