What's the meaning of the Joint Stock Company and In Abbreviation "A.S"?
Within the framework of the Turkish Commercial Code numbered 6102 ("TCC"), a joint stock company is a company that is liable only with its assets due to its debts and whose capital is determined and divided into shares. Within the framework of the TCC, joint stock company partners are limitedly liable for company debts.
Under Turkish law, the establishment of joint stock companies is regulated between article 335-356 of TCC. Under Turkish law, the establishment of joint stock companies is a process that continues from the company founders' declaration of will regarding the establishment until the registration and announcement of the establishment of the company in Trade Registry Gazette.
Who can be the Founders of the Joint Stock Company?
In order to establish joint stock company, a founder or founders are needed. The concept of a founder is defined in article 337 of TCC. There are two mandatory elements for a founder. The first of these is to be a real or legal person and the second is to sign the articles of association by making a capital stipulation. Of course, the person who will be the founder must also have the capacity to act, but it is also possible for the infants to be the founders through their curators and the ones under legal disability through their guardians in accordance with related provisions of Turkish Civil Code. Except for joint stock companies subject to some special regulations pursuant to article 338 of TCC, it is sufficient to have at least one founder for the establishment of a joint stock company.
In accordance with article 339 of TCC, the founders of the company shall sign the articles of association in writing. According to Article 339 of TCC, the signatures in the articles of association shall be notarized or the signing process of the articles of association shall take place in the presence of the trade registry manager or his deputy. In accordance with article 335 of TCC, the company is established when the founders declare their will to establish a joint stock company by signing the articles of association, which is regulated in accordance with the law and in which they unconditionally undertake to pay the capital stipulation. However, according to article 335 of TCC, the company's legal personality starts with registration at the relevant trade registry office.
What are the Minimum Terms and Conditions that should be included in the Articles of Association of the Joint Stock Company?
The elements that should be included in the articles of association are regulated in article 339 of TCC. According to the said provision, the articles of association shall contain;
i. The company's title and the place head office will be located,
ii. The main points of the companies activities, the company's capital and the nominal value of each share and the form and conditions of their payment,
iii. Whether the share certificates will be to the name or to the bearer and privileges granted to certain shares and transfer restrictions,
iv. Rights and assets and their values which was put in as capital other than money and the amount of shares to be paid for them and their price in case of a business takeover and the price of goods and rights purchased by the founders for the establishment of the company on behalf of the company and amount of fee, allowance or award to be given to those who have served in the establishment of the company,
v. The benefits to be provided to the founders and the members of the board of directors and other persons from the company profit,
vi. The number of the members of the board of directors,
vii. The ones of those who are authorized to sign on behalf of the company,
viii. How the general assemblies will be called to the meeting and their voting rights,
ix. The period of time of the company if the company is limited with a period of time,
x. How the announcements of the company will be made,
xi. The types and amounts of capital shares which was stipulated by the shareholders and
xii. The accounting period of the company.
Further elements might be required in addition to the abovementioned minimum requirements for the joint stock companies that are subject to special legislations (for example, banking, energy, mining, insurance etc) and in this respect the articles of association may vary.
Types of Establishments
There are two types of establishments which are simple establishment and qualified establishment according to the type of stipulated capital.
While in a simple establishment, the stipulated capital is only capital in cash; in qualified establishments, it can be in the form of capital in cash and capital in kind or only capital in kind. Capital in kind given to the companies and things to be taken over during the establishment are valued by the experts appointed by the commercial court of first instance in the place where the company's registered office is placed. This value is presented to the Trade Registry Directorate during the application. According to article 342 of TCC; elements of assets which do not have limited real rights, seizures or measures on them, which can be evaluated and transferred in cash can be injected as capital in kind but acts of service, employees labor, commercial reputation and undue receivables cannot be injected as capital in kind. Pursuant to article 344 of TCC, at least twenty five percent of the nominal value of the capital in cash shall be paid before the registration stage and the remaining amount shall be paid within twenty four months following the registration of the company. In case of a capital in kind, the entire stipulated capital shall be brought before registration. According to current legislation in effect, the initial share capital of the joint stock company should be at least 50.000,00 Turkish Liras. The minimum share capital requirement shall vary for the joint stock companies that are subject to special legislations (for example, banking, energy, mining, insurance etc. In any case, the committed share capital amount should be deposited to the bank account of the joint stock company.
Transactions for the Establishment of the Joint Stock Company
In principle, the establishment of joint stock companies has not been subject to any permission. But pursuant to article 333 of TCC, if there is an issue that requires permission according to Communiqué About Permission of the Ministry of Commerce, permission shall be obtained before the registration.
Then, the registration and announcement process is made at the trade registry directorate where the company's registered office is located. In accordance with article 335 of TCC, the company is established when the founders declare their will to establish a joint stock company by signing an articles of association, which is regulated in accordance with the law and in which they unconditionally undertake to pay the entire share capital. However, in accordance with article 355 of TCC, the company's legal personality starts with registration. Pursuant to article 354 of TCC, registration and announcement is made within thirty days from the date of the signing of the articles of association which are not subject to permission and for the matters requiring permission from the date of the permission.
After the establishment of the company, the relevant documents should be submitted to the tax authority in order to comply with the taxation liabilities, to the social security institution for workplace liabilities and to the relevant municipality for the workplace opening operation permit liabilities.
Conclusion
Under Turkish law, the establishment of joint stock companies is a process that continues from the company founders' declaration of will regarding the establishment until the registration and announcement of the establishment of the company. Article 335-356 of TCC includes detailed provisions regarding the establishment of joint stock companies. An error or deficiency that may occur in the matters mentioned in the aforementioned provisions may cause the establishment of the company to not be completed.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.