Responding to increasing stakeholder pressure for enhanced and demonstrable corporate governance procedures and controls is a priority for businesses all over the world – whether they operate locally or across international borders.
But it’s not just stakeholders; the compliance burden is linked to reputational risk too. Regulators are getting tougher, fines are getting bigger, and the number of prosecutions is increasing. The strategic threat of non-compliance is certainly more pronounced. As such, it’s imperative that businesses pay careful attention to compliance – to do it better and more efficiently.
When setting up business in Turkey you need to be aware of the following:
The Turkish Company Act
The main law that regulates the incorporation and activity of companies in Turkey is the new Commercial Code adopted by the Turkish authorities in 2012.
The code better aligns Turkish regulation with EU legislation and other international standards to encourage foreign entrepreneurs to invest it Turkey.
It requires limited liability and joint stock companies to prepare annual activity and dependency reports. The new code also makes it possible to have entities with one shareholder either as a legal or real person, as well as board members and managers.
Commercial Code details
There are two administrative bodies in a joint stock corporation (Anonim Şirket, A.S.): the Board of Directors and the General Assembly. The board of directors can be formed of one or more persons (instead of at least three directors, as stipulated in the former code). The former law stated that the members of the board had to be shareholders. Now a board member can be anyone who does not have any share in the company, but who is a professional in that field or a legal entity.
The General Assembly is made up of the company’s shareholders and, by law, convenes only during ordinary or extraordinary meetings. An ordinary general assembly meeting is held within three months of the end of the accounting year.
Shareholders’ Assembly is the supreme body of a limited liability company (Limited Şirket, Ltd. Şti.) that consists of the shareholders of the company. The company is represented and managed by the manager or managers, who can be either a local or foreign real person or legal entities. At least one of the shareholders must be a manager. A legal entity may be a manager, but is required to be represented by a registered individual.
Audit for companies
- There are criteria that needs to be fulfilled that AS and Ltd. Sti (Anonim Şirket, A.S.) to have their annual financial statements audited by an independent auditor: Companies listed on the Istanbul Stock Exchange and companies operating in specific industries such as energy, electricity, petroleum, insurance and banking are subject to independent audit irrespective of whether they exceed the criteria mentioned above.
- Banks are required to prepare an independent audit report on a quarterly basis, while public companies are required to do so on a half-yearly basis
- Auditors are appointed by shareholders, and the auditor of a group is appointed by the shareholders of the parent company
- Audit must be carried out in accordance with the Turkish Accounting Standards, which comply with the International Financial Reporting Standards (IFRS).
Our services in Turkey
Our local specialists are experts in a wide range of corporate secretarial services to help you keep on top of your corporate compliance. We provide:
I. Corporate administrative services
- Our corporate administrative services relating to annual compliance, general assembly meetings and shareholders’ assembly meetings include:Change of the legal address
- Change of the title
- Change of the scope of activity
- Other changes of the articles of association
- Manager appointment and deregistration
- Preparation of power of attorney
- Change of fiscal year
- Extension of the operation duration of liaison offices
- Registration/deregistration with the tax office and social security directorate
II. Incorporation and registration services
III. Group Reorganisations
- Liquidation of companies and branches
- Closing of liaison office and permanent establishment
- Change of the legal status of the companies
- Share transfer
- Capital increase/decrease
IV. Domiciliation Services
TMF Group’s corporate secretarial services deliver efficiencies when dealing with a wide range of issues. From corporate governance changes, company name changes (often needed after acquisitions) and incorporations or liquidations, to provision of registered offices - we can help to keep you compliant, manage your regulatory risk and provide transparency. We specialise in providing you with a single point of contact to coordinate the day-to-day management of your corporate secretarial operations, and ensure clear communication and transparency when you’re operating across multiple jurisdictions. Our highly experienced international team has extensive practical knowledge of local regulations. Tried and tested entity lifecycle processes establish control, consistency and cost effectiveness worldwide.