Share Transfer In Turkish Limited Liability Companies And Joint Stock Companies - What Actually Changes Ownership

Introduction

The Turkish Commercial Code No. 6102 treats a limited liability company, a limited şirket or LLC, and a joint stock company, an anonim şirket or JSC, differently at the moment of transfer. The practical mistake is to speak of a share purchase agreement as though signing it necessarily changes ownership. It may create contractual obligations while leaving the corporate transfer incomplete. In every transaction, counsel should identify separately: first, the act that transfers title between seller and buyer; second, the act that permits the buyer to exercise shareholder rights against the company; and third, the filing or electronic notification that makes the change visible or effective against third parties.¹

This distinction matters most in cross-border acquisitions. Foreign transaction documents often assume that a board entry, registry filing or delivery of a certificate is merely administrative. Under Turkish law, one of those steps may be indispensable, another may be declaratory only, and a third may be unnecessary. The answer changes with the legal form and the share instrument.

1. Ownership, Company Recognition and Disclosure Are Different Questions

The following matrix gives the correct starting point. It is not a substitute for reviewing the company's articles, shareholder arrangements, encumbrances and regulated-sector approvals.

A buyer should resist any closing memorandum that compresses these columns into a single phrase such as 'registration of the transfer.' The legal effect of registration differs materially across the categories.

2. Limited Liability Company Capital Shares

2.1 Written form and notarised signatures

Article 595 of the Commercial Code requires both the agreement transferring an LLC capital share and the transaction creating the obligation to transfer to be made in writing, with the parties' signatures certified by a notary. This is a validity requirement. A privately signed document without the required certification cannot safely be treated as a merely curable filing defect.²

The Code also requires the transfer instrument to state certain burdens and rights where they exist in the articles, including additional payment and ancillary performance obligations, an extended non-compete obligation, rights of first offer, pre-emption, repurchase or purchase, and contractual-penalty conditions. Due diligence must therefore compare the instrument against the articles rather than rely on a short generic notarial form.

2.2 General assembly approval is usually the decisive corporate act

Unless the articles provide otherwise, the transfer requires approval of the general assembly and becomes valid upon that approval. The articles may prohibit transfers or allow the general assembly to reject approval without stating a reason. If the general assembly does not reject the application within three months, approval is deemed granted. Where a transfer is prohibited or approval is refused, the transferring shareholder's statutory right to seek withdrawal for just cause remains reserved.³

The closing documents should state who will submit the transfer for approval, when the three-month period begins, whether signing and approval occur simultaneously, and what happens to the price if approval is refused. A foreign buyer should not fund unconditionally while the decisive corporate approval remains outstanding.

2.3 Share ledger and Trade Registry

The company must maintain a share ledger recording each shareholder, address and capital share. Managers must apply to the Trade Registry within thirty days for registration of the shareholder change. If they do not act, an outgoing shareholder may apply for deletion after the statutory period. Article 598 expressly protects the legal position produced by failure to register: Trade Registry registration is normally declaratory, not the act that creates the transfer.⁴

This does not make the filing unimportant. An outdated registry record creates authority, compliance, banking and due diligence problems and may expose the registered holder to third-party assumptions or administrative complications. Closing should therefore require evidence of the MERSİS and registry filing even though counsel should not describe it as the constitutive transfer act.

3. Joint Stock Company Shares: The Instrument Determines the Method

3.1 Uncertificated registered shares

If a non-public JSC has not issued a certificate for a registered share, the share is transferred by a written assignment under the general law of obligations. The articles and any statutory restriction must still be reviewed. The board's share-ledger entry determines recognition by the company, but it is conceptually distinct from the assignment between transferor and transferee.⁵

3.2 Registered share certificates

A registered share certificate is generally transferred by endorsement and delivery to the acquirer. Turkish case law treats transfer of possession as indispensable where a certificate exists. The Court of Cassation General Assembly of Civil Chambers, E. 2014/801, K. 2014/891, 12 November 2014, confirmed that endorsement or a transfer declaration must be accompanied by delivery; an incomplete paper trail does not pass the certificated right.⁶

Against the company, the person entered in the share ledger is treated as shareholder. The board must examine an application for registration under Articles 492 to 498 where the shares are restricted. The ledger entry does not ordinarily replace the transfer act, but without recognition the buyer may be unable to vote, receive distributions or exercise other membership rights against the company.

3.3 Bearer share certificates and MKK notification

Bearer shares have not been abolished and were not universally converted into registered shares. Since the 2021 reforms, however, anonymity has been materially reduced. Under Article 489, a bearer certificate is transferred by delivery, but the transfer becomes effective against the company and third parties from notification to the Central Securities Depository, Merkezi Kayıt Kuruluşu or MKK. The acquirer may make the notification through the Hamiline Pay Kayıt Sistemi, HPKS, or may apply to the company for it to do so.⁷

At closing, physical delivery without the HPKS step leaves a serious enforceability gap. The buyer should verify the certificate identifiers, the seller's HPKS record, the notification path and the company's ability to obtain the shareholder list for the next general meeting. A contractual covenant to notify later is not an equivalent substitute for completing the statutory notification.

3.4 Dematerialised shares

Publicly traded and other dematerialised capital-market instruments are held and transferred through electronic records maintained within the MKK system and its members. Physical endorsement and delivery concepts do not govern the settlement of these shares. The parties must instead align the purchase mechanics with capital-markets legislation, market rules, account controls, custody arrangements and any mandatory tender-offer or disclosure duties.⁸

4. Restrictions on Transfer in Joint Stock Companies

Registered JSC shares are transferable unless the Code or the articles impose a lawful restriction. For non-listed registered shares, Article 493 permits refusal where an important reason stated in the articles relates to the composition of shareholders in light of the company's business purpose or economic independence. The company may also avoid registration by offering to acquire the shares for their real value on its own behalf, for another shareholder or for a third party. Inheritance, matrimonial-property and enforcement acquisitions follow special rules.⁹

A blanket clause saying that the board may refuse any buyer for any reason should not be assumed effective. The articles must be interpreted within the statutory regime, and the board must act consistently with good faith and equal treatment. Shareholders' agreements may create contractual consent or pre-emption obligations, but they do not automatically have the same corporate effect as a valid restriction in the articles.

For a buyer, the essential question is therefore not only whether the seller has contractual title. It is also whether the company can lawfully refuse recognition and, if so, whether the transaction documents allocate the valuation, timing and refund risk created by that refusal.

5. Encumbrances, Authority and Chain of Title

A clean share ledger is useful but not conclusive. Due diligence should examine certificates, endorsement chains, prior transfer instruments, general assembly or board resolutions, MKK records, pledges, usufructs, attachments and injunctions. For an LLC, one defective historical transfer can undermine the seller's asserted title. For a certificated JSC share, a missing original certificate or break in delivery history is a closing problem, not a post-closing housekeeping issue.

Authority must be tested on both sides. Corporate sellers and buyers require valid board or shareholder approvals under their own constitutional documents. Powers of attorney should expressly cover the relevant transfer and notarial acts. Where the seller is an individual, marital-property consequences, succession documents, guardianship restrictions or foreign-capacity evidence may require separate review.

The Court of Cassation's 11th Civil Chamber decision E. 2016/12734, K. 2018/1488 illustrates why registration concepts must be used carefully. The decision discusses the declaratory character of share-ledger registration in the relevant transfer context and confirms that the ledger should not be mistaken for the underlying transfer act.¹⁰

6. Closing Mechanics for a Foreign Buyer

A well-designed closing separates conditions precedent from actions that occur at closing and post-closing filings. The following checklist should be adapted to the share type and regulatory sector.

A foreign-law share purchase agreement should not use one generic definition of 'Transfer Completion' across an LLC and a JSC. The Turkish completion memorandum should list the exact statutory acts, responsible person, sequence and evidentiary deliverable. Where funds and transfer cannot occur simultaneously, escrow or a conditional release mechanism is often preferable.

7. Tax and Transaction-Cost Considerations

The tax outcome depends on the seller's identity and residence, the company type, whether a JSC share certificate has been issued, the acquisition and disposal dates, applicable treaty provisions and whether the asset is held as a business asset. An individual disposing of qualifying JSC share certificates after the statutory holding period may fall outside the capital-gains provision in repeated Article 80 of the Income Tax Law. An LLC capital share does not receive the same certificate-based treatment.¹¹

The statement that every share transfer agreement bears stamp duty at a percentage of the price is outdated. Papers relating to share transfers in joint stock, limited and limited partnership companies fall within the exemption in Schedule 2, Part IV, item 16 of the Stamp Tax Law, subject to the scope of the statutory wording and the documents actually executed.¹²

VAT and corporate-tax exemptions require their own tests. Delivery of share certificates benefits from the specific VAT exemption in Article 17(4)(g), while disposals of qualifying participation interests by corporate taxpayers may engage Article 17(4)(r) and the corporate-tax rules, including holding-period and asset-account conditions. The parties should obtain transaction-specific tax advice before fixing the gross-up, withholding and filing provisions.¹³

8. Court of Cassation Guidance in Practice

Three propositions recur in the legislation and case law. First, the legally required form cannot be replaced by the parties' commercial intention. Second, delivery remains central when a negotiable share certificate has been issued. Third, entries in a share ledger or registry must be read according to their proper function: they may govern recognition or disclosure without constituting the transfer itself.

Older decisions under the former Commercial Code remain useful only where the rule carried forward is materially equivalent. Counsel should check the transfer date and governing version of the Code before citing them. For current transactions, Articles 489 to 501 and 595 to 598, the 2021 bearer-share amendments and applicable MKK rules should be the primary framework.¹⁴

9. Frequently Asked Questions

Does signing a share purchase agreement immediately make the buyer the shareholder?

Not necessarily. The agreement may create an obligation to transfer without completing the statutory transfer. An LLC normally requires the Article 595 form and general assembly approval. A certificated JSC share requires the correct endorsement and delivery, while a bearer share also requires the MKK notification for effect against the company and third parties.

Must an LLC transfer be executed entirely before a notary?

The Code requires a written agreement and notarial certification of the parties' signatures. The practical notarial process should be coordinated in advance, especially for foreign signatories, apostilles, sworn translations and powers of attorney.

Does Trade Registry registration create ownership of an LLC capital share?

Ordinarily no. Under Articles 595 and 598, approval is the decisive corporate step unless the articles alter the approval requirement, while the registry entry is generally declaratory. Filing remains essential for an accurate public record and clean post-closing administration.

Can a Turkish JSC still issue bearer shares?

Yes. Bearer shares continue to exist, but the MKK and HPKS notification regime applies. Delivery alone is no longer a complete answer when the buyer needs the transfer to be effective against the company and third parties.

Is entry in the JSC share ledger the same as ownership?

Not generally. For a registered certificated share, title passes through the legally required transfer of the certificate, while share-ledger registration governs recognition and the exercise of rights against the company, subject to lawful transfer restrictions.

Can the board refuse to register a buyer of registered JSC shares?

Only within the statutory and contractual framework. Non-listed restricted registered shares may be refused for an important reason stated in the articles, or through the statutory real-value acquisition mechanism. Listed shares and involuntary acquisitions have different rules.

Are share transfer agreements subject to stamp duty?

Qualifying papers concerning transfers of shares in JSCs, LLCs and limited partnerships are generally exempt under Schedule 2, Part IV, item 16 of the Stamp Tax Law. Other documents in the transaction package may need separate analysis.

Can a foreign buyer complete without travelling to Türkiye?

Often yes, through a carefully drafted and properly legalized power of attorney. The answer depends on the transfer form, notarial requirements, bank and registry practice, and whether original certificates must be delivered. The power should be reviewed in Turkish before execution abroad.

Conclusion

The correct question is not simply whether the parties have signed. It is what the company type and share form require to pass title, what is required for the buyer to be recognized by the company, and what must be filed or notified for the result to bind third parties. An LLC transfer turns on written form, notarised signatures and, ordinarily, general assembly approval. A JSC transfer turns on whether the share is uncertificated, registered, bearer or dematerialised.

For foreign buyers and sellers, the safest approach is a Turkish closing memorandum that identifies each act, its legal effect and the evidence to be delivered against payment. This prevents the common outcome in which a buyer has paid under a valid commercial contract but has not yet acquired an enforceable shareholder position.

Legal Notice

This article provides general legal information and does not constitute legal advice. The applicable legislation, articles of association, shareholder arrangements, regulatory approvals, tax rules, MKK procedures, notification and filing dates, Court of Cassation case law and facts should be checked for the particular matter before action is taken. Share-transfer formalities and tax treatment are fact-sensitive. The law and official guidance were reviewed as of 24 September 2026.

Bibliography and References

Legislation: Turkish Commercial Code No. 6102, especially Articles 484 to 501, 594, 595 and 598. Capital Markets Law No. 6362, especially Article 13. Turkish Code of Obligations No. 6098, assignment provisions. Stamp Tax Law No. 488, Schedule 2, Part IV, item 16. Income Tax Law No. 193, repeated Article 80. Value Added Tax Law No. 3065, Article 17(4)(g) and (r). Corporate Tax Law No. 5520, Article 5. Trade Registry Regulation. Communiqué on Notification and Registration of Bearer Share Certificates with the Central Securities Depository.

Selected judicial authorities: Court of Cassation General Assembly of Civil Chambers, E. 2014/801, K. 2014/891, 12 November 2014. Court of Cassation 11th Civil Chamber, E. 2016/12734, K. 2018/1488. Court of Cassation 11th Civil Chamber, E. 2008/3401, K. 2009/7321, 15 June 2009, read in light of the current Code.

Official sources: Republic of Türkiye, Ministry of Trade, Turkish Commercial Code and Trade Registry information, https://ticaret.gov.tr/. Republic of Türkiye, Official Gazette, https://www.resmigazete.gov.tr/. Central Securities Depository, Hamiline Pay Kayıt Sistemi and transfer guidance, https://www.mkk.com.tr/. Revenue Administration, official tax legislation and rulings, https://www.gib.gov.tr/. Court of Cassation, Official Case Law Search, https://karararama.yargitay.gov.tr/.

Selected legal books: Poroy, Reha; Tekinalp, Ünal; Çamoğlu, Ersin, Ortaklıklar Hukuku. Pulaşlı, Hasan, Şirketler Hukuku Şerhi. Bahtiyar, Mehmet, Ortaklıklar Hukuku. Bilgili, Fatih; Demirkapı, Ertan, Şirketler Hukuku Dersleri.

Footnotes

^{1 Turkish Commercial Code No. 6102, Articles 489 to 501 and 595 to 598.}

^{2 Turkish Commercial Code No. 6102, Article 595(1).}

^{3 Turkish Commercial Code No. 6102, Article 595(2) to (6).}

^{4 Turkish Commercial Code No. 6102, Articles 594 and 598.}

^{5 Turkish Commercial Code No. 6102, Articles 490 and 499; Turkish Code of Obligations No. 6098, assignment provisions.}

^{6 Court of Cassation General Assembly of Civil Chambers, E. 2014/801, K. 2014/891, 12 November 2014; Turkish Commercial Code No. 6102, Article 490.}

^{7 Turkish Commercial Code No. 6102, Article 489, as amended by Law No. 7262; Central Securities Depository, Hamiline Pay Kayıt Sistemi official guidance.}

^{8 Capital Markets Law No. 6362, Article 13; Central Securities Depository, official MKS transfer rules.}

^{9 Turkish Commercial Code No. 6102, Articles 492 to 498.}

^{10 Court of Cassation 11th Civil Chamber, E. 2016/12734, K. 2018/1488. The governing statute and transfer date in any precedent must be checked before application.}

^{11 Income Tax Law No. 193, repeated Article 80. Eligibility depends on the asset and taxpayer-specific facts.}

^{12 Stamp Tax Law No. 488, Schedule 2, Part IV, item 16; Revenue Administration ruling dated 9 December 2016 on share-transfer agreements.}

^{13 Value Added Tax Law No. 3065, Article 17(4)(g) and (r); Corporate Tax Law No. 5520, Article 5.}

^{14 Turkish Commercial Code No. 6102, Articles 489 to 501 and 595 to 598; Law No. 7262; Communiqué on Notification and Registration of Bearer Share Certificates with MKK.}

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.