Closure of companies in Turkey: costs and legal procedures
Learn how to close a company in Turkey: steps, procedures, costs, certain observations and important matters. Check the legal services of Gars Consulting Company.
What’s closure of companies in Turkey?
Closing companies in Turkey is important for many who are thinking of starting a company in Turkey. The closure is a liquidation of the company, resulting in its demise, removal of its business name, liquidation of its assets and premises, and conversion into funds where the company's debts are repaid or distributed to shareholders if there is no debt on it.
What are the reasons for the company's closure in Turkey?
The reasons for the closure of companies are numerous. The closure may be voluntary according to the decision of the shareholders, or mandatory. The reasons may be related to major breaches of Turkish law, or to its statute of the establishment and operation of companies. It may also close if it fails to meet its obligations, if it stops operating for one year without legitimate justification, or if its losses increase by 75% of its acquired capital, if it does not decide to increase its capital.
Stages and procedures for closing the company in Turkey
- The reason for the company's liquidation must be recorded and reported to the relevant Directorate of Commercial Registry.
- The company must appoint the liquidators to be responsible for the liquidation, and one of them must be a Turkish resident in Turkey. Liquidators may be appointed by the agreement of the company or by the decision of the General Assembly and, if not, liquidation by the board of directors.
- Liquidators should be registered and announced in the commercial register.
- The persons concerned shall be informed by means of a registered communication that the company has been terminated by three declarations issued on a weekly basis.
- The persons concerned are invited to inform the liquidators of their entitlements, as provided for in the underlying contract, on the company's website and in the Turkish Commercial Register.
- Liquidators prepare the liquidation financial statements for each year and submit the final balance sheet to the General Assembly at the end of the liquidation.
- After payment of the company's debts in liquidation and recovery of share prices, the remaining assets are distributed among the shareholders at the rate of capital paid and franchises, unless otherwise agreed in the Statute.
Closing the company's tax file
If a declaration of liquidation has been within one year, it must be submitted to the tax office within a maximum of thirty days from the date of completion of the transactions. If the liquidation is more than one year, the liquidator shall submit the liquidation decision to the tax office between one and twenty-five months of the fourth month following the month in which the liquidation period was closed. In the end, a liquidation review petition is prepared and submitted to the Tax Office, for tax inspection to commence within three months at the latest.
The duration of the company's closure in Turkey
The duration of the company's closure in Turkey is not less than one year, which is because the companies are of a commercial legal character. The time allowed all employees of the company to learn about the liquidation and closure decision, so they could claim their rights if they had rights over the company. The remaining assets may never be distributed until six months after the date of the third invitation to creditors.
The costs of closing the company in Turkey
The cost of closing the company in Turkey is related to the type of company, the amount of its debts and the receivables to be paid. In addition, during the closure period, company taxes, the cost of the chartered accountant, etc.
Post-closure of the company in Turkey
In liquidation, including in its relations with shareholders, the company retains its legal personality until the end of liquidation and uses the business name in liquidation as a facility. From the date of commencement of the liquidation transaction, upon termination of the liquidation, the liquidation officers apply to the Commercial Registry Directorate to remove the business name of the company from the registry. The deletion is then recorded and advertised on the system, thus terminating the legal entity of the company.
Edited by Gars Consulting Company
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