Corporate law refers to the branch of law concerned with all cases and matters throughout a company's process, from incorporation to liquidation. Under the Turkish Commercial Code, commercial companies consist of five types: collective (general partnership), commandite (limited partnership), joint-stock, limited liability, and cooperative companies. A corporate lawyer provides consultancy services to these company types defined under the legislation.
Corporate Law
Given that Ankara is both the capital and today has a population exceeding 6,000,000, it has become a place where the headquarters of major commercial companies are located and where commerce is actively conducted. Wherever people are present and active commerce takes place, certain legal disputes inevitably arise.
Companies and Cooperatives
While it is necessary and beneficial for companies and cooperatives to retain an attorney for initiating and pursuing legal processes, our law also makes it mandatory for joint-stock companies and cooperatives meeting certain conditions to retain an attorney.
According to Article 35/3 of the Attorneys Act No. 1136, “Joint-stock companies whose paid-in capital is five times or more than the capital amount stipulated in Article 272 of the Turkish Commercial Code, and building cooperatives with one hundred or more members, are required to retain a contracted attorney.”
Under the Turkish Commercial Code No. 6102, a joint-stock company's paid-in capital must be at least TRY 250,000 (amount updated as of January 1, 2024). Accordingly, every joint-stock company with a paid-in capital of TRY 1,250,000 or more — five times the minimum paid-in capital — is required to retain an attorney.
In addition, building cooperatives with 100 (one hundred) or more members are also required to retain an attorney.
Article 35/3 of the Attorneys Act provides: “Organizations acting contrary to the provisions of this paragraph shall be subject to an administrative fine, to be imposed by the Public Prosecutor for each month in which they fail to appoint a contracted attorney, equal to twice the monthly gross minimum wage in effect on the date of the offense for workers over the age of sixteen employed in the industrial sector. The provisions of the Civil Procedure and Criminal Procedure Codes and other laws are reserved.”
Under this statutory provision, companies and cooperatives that fail to comply with the obligation to retain an attorney are subject to an administrative fine imposed by the Public Prosecutor, for each month in which they fail to appoint an attorney, equal to twice the monthly gross minimum wage.
Although limited liability companies and other types of companies are not required to retain an attorney, the consultancy of a corporate lawyer is necessary for resolving matters and disputes that may arise from companies' operations.
Companies and Cooperatives Under the Turkish Commercial Code
Under Article 124 of the Turkish Commercial Code, commercial companies consist of collective, commandite, joint-stock, limited liability, and cooperative companies. Collective and commandite companies refer to partnerships (person-based companies), while joint-stock, limited liability, and commandite companies whose capital is divided into shares refer to capital-based companies.
While all of these companies are directly and primarily liable for the company's debts, the liability of company officers and partners varies according to the type of company.
In person-based companies — that is, collective and commandite companies — the company's partners are personally, secondarily, and unlimitedly liable with their personal assets for the company's debts. In these companies, individuals may become partners by contributing any type of capital and labor.
In capital-based companies, however, partners are not personally liable with their personal assets for the company's debts. This differs between joint-stock and limited liability companies. In joint-stock companies, creditors cannot obtain their claims by applying to the company's partners. Creditors have no means of recourse against the company's partners. However, they can obtain their claims by applying to the joint-stock company itself. The partners' liability toward the company is limited solely to the amount of capital they have committed.
In limited liability companies, the partners' liability consists of the capital they have committed, along with any additional payment obligations and ancillary duties set out in the company's articles of association. In limited liability companies as well, partners are not liable toward creditors.
Joint-Stock Companies
A joint-stock company refers to a company whose capital is fixed and divided into shares, which is liable for its debts solely with its assets, and which may be established for any economic purpose or subject matter not prohibited by law. Joint-stock companies may be established with a minimum paid-in capital of TRY 250,000 and at least one shareholder. For non-publicly held joint-stock companies that have adopted the registered capital system, this paid-in capital must be at least TRY 500,000 (amounts updated as of January 1, 2024).
Joint-stock companies are liable toward creditors with the company's assets. Partners are liable only for the capital shares they have committed, and only toward the company. A partner's liability ends upon payment of the capital debt they committed to contribute to the company. In this respect, partners have no direct liability toward creditors.
In the event of the liquidation of a joint-stock company, creditors' claims will be paid first out of the company's assets, and if any surplus remains from the assets, it will be distributed to the partners in proportion to their shares.
Limited Liability Companies
Limited liability companies are established by one or more natural or legal persons under a trade name, for any economic purpose or subject matter not prohibited by law. A limited liability company's paid-in capital is fixed and consists of the sum of the capital shares. Unlike joint-stock companies, the paid-in capital must be at least TRY 50,000 (amount updated as of January 1, 2024). Just as in joint-stock companies, partners in limited liability companies are not liable for the company's debts and are only obligated to pay the capital shares they have committed and to fulfill any additional payment and ancillary performance obligations set out in the articles of association. Limited liability companies may be established with a minimum of one (1) and a maximum of 50 (fifty) partners.
Commandite Companies
According to Article 304 of the Turkish Commercial Code, “A commandite company is a company established for the purpose of operating a commercial enterprise under a trade name, in which the liability of one or more of the partners toward the company's creditors is unlimited, while the liability of the other partner or partners is limited to a specified amount of capital.” Whether a company is a commandite company is determined according to the agreement entered into. However, the name and designation given to a company alone are not sufficient to determine its type. If it cannot be clearly established that a company is a commandite company, it is deemed to be a collective company.
Partners whose liability is unlimited are called “komandite” (general) partners, and partners whose liability is limited are called “komanditer” (limited) partners. A komanditer partner's liability does not exceed the amount of capital they have contributed or committed. Under the law, while komandite partners must be natural persons, a komanditer partner may also be a legal entity.
Collective Companies
A collective company is a company established between natural persons for the purpose of operating a commercial enterprise under a trade name, in which none of the partners' liability toward the company's creditors is limited — that is, all partners bear unlimited liability. Unless otherwise arranged, each of the company's partners individually has the authority to manage the company. Collective companies may be established by at least two natural persons. The company's trade name consists of the name and surname of one of the partners along with an indication of the company type. There is no minimum paid-in capital requirement for the collective company type.
Cooperatives
A cooperative is a variable-membership and variable-capital entity with legal personality, established by natural and public legal persons, along with special provincial administrations, municipalities, villages, associations, and societies, for the purpose of securing and protecting certain economic interests of its members — particularly needs related to their profession and livelihood — through mutual assistance, solidarity, and suretyship.
While there is no limit on the number of members in a cooperative, a cooperative must be established by at least 7 (seven) persons.
What Are the Duties of a Corporate Lawyer?
Corporate law represents services provided in all disputes and matters a company may be involved in, and therefore it is a specialization requiring competence across all areas of law. However, it is fair to say that a corporate lawyer generally provides services in the fields of commercial and corporate law, as well as labor law.
A corporate lawyer is selected from among attorneys who stand out for their experience and professional knowledge in these areas of practice. A corporate lawyer providing consultancy services is expected to be an expert not only in commercial law, corporate law, and labor law, but also to have command of all areas of law and the relevant legislation, particularly criminal law, administrative law, tax law, consumer law, contract law, and negotiable instruments law.
- All disputes and matters throughout the company's process, from incorporation to liquidation,
- Drafting and amending the company's articles of association,
- Handling and providing legal representation in cases, proceedings, and other matters the company is or may become involved in,
- Taking preventive measures in disputes the company may become involved in,
- Providing the legal information the company needs or may need,
- Drafting the national and international commercial contracts the company is party to and ensuring contract review,
- Facilitating the company's commercial negotiations and settlements,
- Carrying out the company's capital increase and reduction procedures,
- Managing the legal process in company mergers and acquisitions, conversions, and share transfers,
- Establishing the company's corporate bodies, holding management and general assembly meetings, and following up on the process,
- Carrying out enforcement proceedings for the company's collection matters,
- Handling the follow-up of the company's negotiable instruments (checks, promissory notes, bills of exchange, etc.),
- Managing the legal process for the company's tax matters and disputes,
- Following up on the company's legal processes relating to labor law,
- Following up on criminal investigations and prosecutions that company officers may face in connection with the company's activities,
- Following up on criminal investigations and prosecutions against company officers arising from workplace accidents occurring in connection with the company's activities,
- Handling cases and matters in the company's disputes with public institutions and organizations,
- Following up on the company's matters and cases with consumers,
- Handling matters and cases in disputes that may arise from unfair competition,
- Responding to formal notices and warning letters received by the company
and providing legal consultancy services to the company on many other such matters.
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