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Under Transitional Article 15, added to the Turkish Commercial Code by Law No. 7511 published in the Official Gazette on 29 May 2024, the countdown has begun for joint-stock companies (A.Ş.) and limited liability companies (Ltd. Şti.) whose share capital falls below the prescribed minimum amount.
Should these companies fail to increase their share capital to the minimum amounts stipulated by law by 31 December 2026, they will be deemed to have been dissolved. This means that the companies will automatically cease to exist by operation of law, without the need for a separate resolution for the dissolution or liquidation of the company.
Minimum Share Capital Amounts for Companies
These amounts have been revised by Presidential Decree No. 7887, published in the Official Gazette dated 25 November 2023 and numbered 32380. Accordingly, the minimum authorised capital for joint-stock companies has been increased to 250,000 TL; the minimum initial capital for non-publicly traded joint-stock companies that have adopted the registered capital system has been increased to 500,000 TL; and the minimum authorised capital for limited liability companies has been increased to 50,000 TL.
| Company Type | Minimum Capital Amount |
|---|---|
| Joint-Stock Company (A.Ş.) | 250.000 TL |
| Non-Publicly Traded Joint-Stock Company with Registered Capital | 500.000 TL |
| Limited Liability Company (Ltd. Şti.) | 50.000 TL |
Pursuant to Transitional Article 15 added to the Turkish Commercial Code No. 6102, existing joint-stock companies and limited liability companies whose capital falls below the specified minimum amounts have been granted until 31 December 2026 to increase their capital.
If your company's share capital falls below the amounts specified above, the necessary capital increase procedures must be completed by 31 December 2026.
Severe Penalty: Dissolution of the Company
Joint-stock companies and limited liability companies that fail to increase their share capital to the prescribed minimum amounts by 31 December 2026 shall be deemed to have been dissolved without the need for any further resolution.
Non-publicly traded joint-stock companies that have adopted the registered capital system shall be deemed to have ceased to be subject to the registered capital system if they fail to increase their initial capital and issued share capital to 500,000 TL by the same date.
Dissolution will result in the company entering liquidation proceedings, thereby significantly affecting the continuity of its commercial activities. Transactions involving bank accounts and company assets will become more difficult, and existing contracts and business relationships will be disrupted. Should a request be made to reinstate the company, a lengthy and costly reinstatement lawsuit and official procedures will need to be followed.
Critical Issues To Be Aware Of During The Capital Increase Process
1. General Meeting and Quorum
Pursuant to Transitional Article 15 of the Turkish Commercial Code No. 6102, no quorum is required for general meetings convened to increase the share capital to the minimum amounts stipulated by law. Resolutions are adopted by a majority of the votes present at the meeting, and no preferential rights may be exercised against such resolutions.
This special provision, introduced to facilitate the capital increase process, applies only to general meeting resolutions aimed at raising the company's share capital to the minimum amounts stipulated in Articles 332 and 580 of the Turkish Commercial Code. In the case of capital increases exceeding the minimum amount, or where other amendments to the articles of association are also on the agenda alongside the capital increase resolution, the general provisions and quorums applicable to the relevant transaction must be assessed separately.
The fact that a quorum is not required does not mean that other procedural rules relating to the general meeting do not apply. It is therefore of the utmost importance that notice of the general assembly meeting is duly given , that the agenda is prepared clearly and comprehensively, that shareholders' rights to attend and vote at the meeting are safeguarded, and that the minutes of the meeting and other relevant documents are drawn up in accordance with the applicable legislation.
2. Obligation to Have a Ministry Representative Present
As a general rule, a representative of the Ministry of Trade must be present at general meetings of joint-stock companies where a capital increase is on the agenda.
However, it should be noted that single-shareholder joint-stock companies and limited liability companies, whose incorporation and amendments to the articles of association are not subject to Ministry approval, are exempt from this obligation.
3. Registration with the Commercial Register and Publication
The general meeting resolution regarding a capital increase is subject to registration and publication. Therefore, following the adoption of the general meeting resolution, an application for registration must be submitted via the MERSIS system, accompanied by the amended articles of association containing the updated capital clause and any other documents required by the relevant Commercial Register office.
Resolutions on capital increases that are not registered with the Commercial Register produce no legal effect.
Why Should One Not Wait Until 31 December 2026 For Capital Increase Procedures?
No official statistics or numerical data have been published by the Ministry of Trade or the Union of Chambers and Commodity Exchanges of Turkey (TOBB) regarding the total number of companies that do not meet the minimum capital requirement and are required to carry out a capital increase by 31 December 2026; however, it is estimated that tens of thousands of small-scale or dormant companies will be directly affected by these requirements. The fact that a large number of companies subject to this obligation are likely to aim to complete their procedures towards the end of the yearmay lead to a significant volume of transactions at the relevant institutions and organisations. In this context, the following risks in particular should be taken into account:
- A high volume of transactions and delays at Commercial Register offices,
- Prolonged delays in the process of appointing a Ministry representative where required for joint-stock companies,
- Disruptions arising from high volumes at notaries, banks and other relevant institutions,
- Insufficient time remaining to rectify any errors or omissions identified in documents,
- The registration application not being finalised by 31 December 2026 due to missing documents or requests for corrections.
Taking these risks into account, we recommend that the capital increase process be initiated as early as possible and that the procedures be completed without leaving them until the last day.
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.
