For further information,
please contact:
Legal Alerts

Minimum Capital Amounts of Joint-Stock and Limited-Liability Companies Changed

Legal Alerts
Corporate
General

Recent Developments

The minimum capital amounts for joint-stock and limited-liability companies, which are stipulated under Article 332 and 580 of Turkish Commercial Code No. 6102, have been changed with the Presidential Decision on Increasing the Minimum Capital Amount for Joint-Stock and Limited-Liability Companies numbered 7887 and dated 24 November 2023 (“Decision“). The Decision was published in the Official Gazette on 25 November 2023 and will enter into force on 1 January 2024.

What’s New?

Pursuant to the Decision, the minimum capital amounts of joint-stock and limited-liability companies have been changed as follows:

  • For joint-stock companies, the minimum capital amount stipulated as 50,000 Turkish Liras increased to 250,000 Turkish Liras,
  • For nonpublic joint-stock companies that accept the registered capital system, the minimum initial capital amount stipulated as 100,000 Turkish Liras increased to 500,000 Turkish Liras,
  • For limited-liability companies, the minimum capital amount stipulated as 10,000 Turkish Liras increased to 50,000 Turkish Liras.

Status of the existing companies

After the Decision was published in the Official Gazette, the Ministry of Commerce made a written statement on 26 November 2023 and stipulated that the respective amounts will apply to joint-stock and limited-liability companies established after 1 January 2024.

It is said that there is no obligation at this stage to increase capital for existing companies whose capital is below the specified amounts. However, it is suggested that the respective companies increase their capital to at least the mentioned amounts to strengthen their equity positions.

Conclusion

The Decision will enter into force on 1 January 2024. Accordingly, it is crucial to determine whether companies’ current capital amounts are compatible with the new minimum capital amounts, and to increase the capitals below the specified amounts to the new minimum capital amounts to strengthen companies’ equity positions. It is also crucial to take into account the new minimum capital amounts in upcoming corporate transactions, particularly in company establishment and capital decrease processes.