SCOPE AND PRINCIPLES OF COMPANY LAW IN TURKEY

WHAT ARE THE TYPES OF COMPANIES IN TURKEY?

According to the Turkish Commercial Code, company types in Turkey cover a broad spectrum and are regulated under company law in Turkey. Primarily, companies are classified into two main categories: ordinary partnerships and commercial companies.

Commercial companies are further divided into subcategories, including collective companies, limited partnerships, cooperative companies, joint-stock limited partnerships, joint-stock companies, and limited liability companies. These entities engage in commercial activities and bear specific legal responsibilities.

In addition to these, there are some special types of companies that can be considered subtypes of either ordinary partnerships or commercial companies. These include holding companies, public warehouses, shipping partnerships, construction partnerships, banks, insurance companies, investment partnerships, and joint ventures.

Corporate law in Turkey governs various aspects of these company types, including their formation, operations, shareholder structures, and dissolution. Each type of company is subject to different legal regulations based on its characteristics and functions.

WHAT IS COMPANY LAW IN TURKEY?

Company law in Turkey is a branch of law that regulates the establishment, operation, shareholder relations, management structures, and liquidation processes of both personal and capital companies engaged in commercial activities. This field aims to define the legal status of companies and ensure that commercial transactions are carried out in compliance with legal principles. Recognized as a sub-discipline of commercial law, company law in Turkey evolves within the framework of national legislation and international legal regulations.

Beyond defining the legal structure, obligations, rights, and authorities of companies, this branch of law also examines their roles in economic and social processes. The continuity of companies and their adaptation to market dynamics are supported through legal regulations, ensuring a balanced structure among shareholders, executives, and other stakeholders. Additionally, key topics within corporate law in Turkey include decision-making mechanisms, capital structures, tax obligations, corporate social responsibilities, and legal compliance requirements. By regulating both the internal and external relations of companies, corporate law in Turkey aims to promote economic stability and legal security

THE IMPORTANCE OF COMPANY LAW IN TURKEY

Company law in Turkey plays a crucial role in maintaining economic order and market security. Ensuring that companies operate within a legal framework contributes to the stability and security of investors and the business world. At the same time, it strengthens economic stability by promoting transparency and accountability in commercial activities.

The importance of corporate law in Turkey can be examined under the following key aspects:

• Legal Assurance: Company law in Turkey ensures that businesses operate in compliance with legal regulations, minimizing legal disputes between parties. By securing contract-based transactions, partnerships, and commercial agreements, it fosters stability and trust in business life. Fair and resolution-oriented handling of disputes reinforces the rule of law in the market.
• Contribution to Economic Growth: Corporate law in Turkey provides investors with a secure and stable business environment. Legal regulations help companies strengthen their capital structures and participate more effectively in the markets. Additionally, long-term investments, the creation of new business opportunities, and employment growth are supported by a legally regulated economic system.
• Ensuring Fair Competition: By preventing unfair competition, company law helps maintain market balance. Working in parallel with competition law, it prevents monopolization and market manipulation, ensuring that both large and small companies can compete under equal conditions. Protecting consumer rights and maintaining transparency in market conditions are fundamental elements of fair competition.
• Supporting International Trade: Corporate law in Turkey facilitates the integration of multinational companies into the global economy by ensuring compliance with legal regulations. International trade agreements, foreign investments, and cross-border company operations are regulated according to national and international legal frameworks. This legal structure helps businesses comply with international regulations, ensuring the continuity of foreign investment flows and global trade.

In conclusion, company law in Turkey is one of the cornerstones of modern commerce, ensuring that businesses operate legally, efficiently, and effectively. This legal discipline plays a vital role in maintaining the continuity and security of companies and the business world, significantly contributing to economic balance, market stability, and investor confidence.

KEY ASPECTS OF COMPANY LAW IN TURKEY

Company law in Turkey encompasses various fundamental aspects that govern the establishment, operation, and regulation of companies.

• Company Formation and Organization: Corporate law in Turkey provides the legal foundation for company formation and organization. It defines the requirements and procedures for establishing a business entity, determines its structure, and allocates rights and responsibilities among shareholders, board members, and executives. This legal framework establishes a company’s legal personality, distinguishing it from its shareholders and enabling it to engage in various business activities.
• Corporate Governance and Accountability: Corporate governance refers to the mechanisms and processes through which companies are directed, controlled, and held accountable. It defines the roles and responsibilities of board members, executives, and shareholders, aiming to ensure transparency, fairness, and accountability. Corporate governance mechanisms—including board structures, shareholder rights, and disclosure requirements—promote responsible decision-making, protect shareholder interests, and mitigate conflicts of interest.
• Shareholder Rights and Protection: Institutionalization defines and safeguards the rights of shareholders, who are the owners of a company. These rights include participating in decision-making through voting, accessing relevant company information, and receiving a fair share of profits as dividends. Additionally, corporate law in Turkey provides protection mechanisms for minority shareholders, preventing abuses of power by majority shareholders and offering remedies against oppressive or discriminatory practices.
• Corporate Finance and Securities Regulation: Corporate regulations ensure fair and transparent capital markets by establishing rules for issuing and trading securities. Companies are required to provide investors with accurate and timely information. Securities regulations also address insider trading, market manipulation, and fraudulent activities, aiming to protect market integrity and safeguard investors from unfair practices.
• Mergers, Acquisitions, and Corporate Restructuring: Corporate law in Turkey governs mergers, acquisitions, and corporate restructuring processes, providing a legal framework for these complex transactions. It outlines the procedures and requirements for obtaining shareholder approval, conducting due diligence, and ensuring fair treatment of all affected parties. The objective is to strike a balance between facilitating business transactions and protecting the interests of shareholders and other stakeholders.
• Corporate Social Responsibility and Stakeholder Management: In recent years, corporate governance has increasingly recognized the importance of corporate social responsibility (CSR) and stakeholder management. Company law in Turkey encourages companies to consider the interests of various stakeholders, including employees, communities, and the environment, beyond merely maximizing shareholder value.

The above key aspects constitute fundamental elements of this branch of law. Understanding and complying with these principles is essential for companies to operate in accordance with laws, regulations, and ethical standards while ensuring long-term sustainability.

APPLICATION OF CORPORATE LAW FOR CORPORATE GOVERNANCE

Corporate law forms the foundation of modern business regulation, providing a legal framework for company formation, management, accountability, and operations. It plays a critical role in maintaining the stability and integrity of the corporate sector, safeguarding shareholder rights, ensuring transparency, and promoting fairness. Businesses are constantly evolving and encountering new challenges, and they must adapt to address emerging issues and strike a balance between commercial interests and broader societal concerns. By adhering to the principles of corporate law, it is possible to create a corporate environment that promotes economic growth, responsible business practices, and the well-being of all stakeholders.

In Turkey and around the world, corporate legislation must adapt to the changing business environment. This involves exploring governance models that include the interests of a broader range of stakeholders, encouraging sustainability, and promoting responsible business practices. Additionally, it requires enhancing transparency and accountability through strong reporting and disclosure requirements, enabling stakeholders to make informed decisions and holding companies accountable for their actions.

Moreover, as the role of corporate law extends beyond national borders, businesses are increasingly operating in a globalized world. International legal frameworks and compliance efforts aim to facilitate cross-border transactions, ensure consistency in regulatory standards, and provide a fair competitive environment for businesses operating internationally.

In conclusion, corporate governance is a vital component of modern business society. By regulating the establishment, management, and operations of companies within a legal framework, it ensures accountability, transparency, and stability. By protecting shareholder rights, encouraging responsible corporate behavior, and addressing emerging challenges, it plays a crucial role in creating a business environment that benefits not only shareholders but also employees, communities, and other stakeholders. As the business environment continues to change, corporate law must adapt to address new issues and strike a balance between commercial interests and societal concerns.

DETERMINATION OF COMPANIES’ TAX RESPONSIBILITIES IN TURKEY

Companies, while carrying out their operations, must fulfill not only their commercial activities but also their tax obligations in Turkey. Tax responsibility in Turkey is a critical element for the sustainability and legal compliance of companies. Since taxes are the primary source of financing for public services in a state, all types of companies must fulfill their tax obligations. The tax responsibilities of companies are shaped by various legal regulations and rules.

1- What is Tax Responsibility in Turkey?

Tax responsibility in Turkey refers to the obligation of a company to fulfill the tax obligations determined by the state. This obligation includes taxes calculated based on the company’s profits, activities, production, sales, and other commercial transactions. A company’s tax responsibility not only involves paying taxes but also filling out tax declarations correctly, making regular payments, and acting in compliance with legal regulations.

2- Tax Obligations of Companies in Turkey

The tax obligations of companies depend on the tax laws of the country where they operate. In Turkey, the main tax obligations are as follows:

• Corporate Tax: Companies pay corporate tax on the profits they earn from their activities. In Turkey, legal entities such as joint-stock companies and limited companies are subject to corporate tax on their earnings. The corporate tax rate is usually determined by the state with specific annual changes.
• Value Added Tax (VAT): Companies apply VAT when selling goods or services. The VAT on the sold products and services is collected by the company and paid to the tax office. Companies have the right to claim VAT refunds to balance the VAT in buying and selling transactions.
• Income Tax: The owner or shareholders of a company may need to pay income tax based on the company’s earnings. However, joint-stock and limited companies pay corporate tax instead of income tax. For sole proprietorships, income tax must be paid on the income earned.
• Stamp Tax: Companies are required to pay stamp tax when preparing written documents such as contracts, protocols, and payment orders. The stamp tax varies depending on the type and amount of the document.
• Social Security and Other Worker Rights: Companies are responsible for paying the social security premiums of their employees. In addition to insurance premiums, the company is responsible for paying other premiums determined by the government, such as unemployment insurance and general health insurance. Moreover, employees’ rights, such as annual leave, severance pay, and compensation for dismissal, are also the responsibility of the company.
• Temporary Taxes and Exemptions: Companies may be required to pay temporary taxes periodically. Additionally, companies can apply for certain tax advantages and exemptions offered by the government.

3- Tax Violations and Sanctions in Turkey

If companies fail to fulfill their tax obligations, they may face various penalties. Tax violations can include tax evasion, failure to make timely payments, or submitting incorrect declarations. In Turkey, tax penalties are usually determined as a percentage, ranging from 50% to 200% of the original tax amount. Furthermore, after tax audits and inspections, companies may face punitive actions.

The most important regulation regarding tax offenses and violations in Turkey is the Tax Procedure Law No. 213. This law stipulates that companies must submit their tax declarations correctly and on time and outlines the penalties for companies that submit incomplete or incorrect declarations. Unpaid public receivables may result in the liability of company managers and shareholders. Therefore, the company’s legal representative must be diligent about company’s tax responsibility to prevent potential tax penalties.

4- Tax Audits in Turkey

Companies may be subject to audits while fulfilling their tax responsibilities. In Turkey, the Revenue Administration is responsible for tax audits. A company’s financial records and declarations can be audited by tax offices. Audits examine the accuracy of the taxes paid by companies, whether the declared income reflects reality, and the consistency of accounting records. If a company receives an unfavorable result from a tax audit, it may face additional tax payments and penalties.

5- Tax Planning and Consulting in Turkey

Companies can engage in tax planning while fulfilling their tax responsibilities in Turkey. Tax planning involves strategies that minimize a company’s tax obligations within the legal framework. Through tax planning, companies can achieve more efficient tax management, save money, and comply with tax laws. Tax consulting services help companies develop proper tax strategies and reduce risks in tax audits.

The tax responsibility of companies in Turkey is not only a legal requirement but also of critical importance for sustainable business management. While fulfilling their tax obligations, companies must act in compliance with tax laws and ensure accurate accounting and reporting. Therefore, tax responsibility is an important area that needs to be managed properly, and with legal compliance and effective tax management, it can contribute to the long-term success of the company.

SCOPE OF INTERNATIONAL CORPORATE LAW

International corporate law is the branch of law that regulates the activities of companies that cross national borders. With the influence of globalization, it has become common for companies to operate in international trade and investment, and adapting to legal regulations in different countries has become critically important. This branch of law defines the legal regulations, responsibilities, and rights companies may encounter when operating internationally.

International corporate law encompasses regulations in many different areas. These areas include:

1. Company Formation and Structure: The process of multinational companies establishing branches or subsidiaries in different countries is subject to both national and international legal regulations. Since each country has its own commercial laws and regulations, international companies must operate within these frameworks.
2. International Contracts and Investment Law: Commercial contracts between companies and foreign countries are evaluated within the framework of international investment law. This includes matters such as bilateral investment agreements, double taxation treaties, and investor protection.
3. Compliance and Standardization: In recent years, efforts to harmonize international corporate law have gained momentum. Organizations like the International Chamber of Commerce (ICC), the Organization for Economic Co-operation and Development (OECD), and the United Nations Commission on International Trade Law (UNCITRAL) are working to encourage the harmonization of laws. These efforts aim to reduce legal complexity, optimize business processes, and enhance cross-border cooperation.
4. Competition Law and Market Regulation: Compliance with competition rules and regulations is of significant importance for international companies, particularly to prevent monopolies and maintain market order. Major markets such as the European Union and the United States rigorously enforce competition laws and require international companies to comply with them.
5. Taxation and Financial Regulations: International companies may be subject to different tax regulations in the countries they operate in. Regulations developed by the OECD, such as the BEPS (Base Erosion and Profit Shifting) framework, guide international taxation policies aimed at preventing tax evasion and corruption.
6. Environmental and Social Responsibility Regulations: The environmental impacts and social responsibilities of global companies are regulated within the framework of international law. Agreements such as the United Nations Global Compact set out guidelines for companies’ sustainability and ethical responsibilities.
7. Management of International Workers: Employees in international companies may be subject to different regulations depending on the country in which they operate and their employment status. For instance, an employee working in a liaison office in Turkey may be exempt from income tax under local regulations, while an expatriate employee may be subject to tax obligations in both the country where they are assigned and their home country. Similarly, workers in Turkey who receive their salary from abroad are subject to special regulations, and their social security and tax obligations may differ.
8. Emerging Trends and Future Directions: Globalization, digitalization, and changing business models have introduced new challenges. Issues such as data protection, cybersecurity, e-commerce, and sustainable business practices require constant adaptation and the development of legal frameworks. International cooperation among governments, regulatory bodies, and businesses is crucial to effectively address these emerging trends.

International corporate law plays a critical role in ensuring that global trade is conducted in an orderly and transparent manner. It aims to ensure that companies operate with legal security, protect investor rights, maintain fair competition, and sustain stable international commercial relationships. These goals are fundamental to the field of international corporate law.

CAN COMPANIES PURCHASE REAL ESTATE IN TURKEY?

In Turkey, companies can purchase real estate for commercial or investment purposes. Properties such as houses, land, buildings, and shops can be bought in the name of the company and recorded as business assets. However, this process is subject to specific rules, including accounting, tax regulations, and real estate law in Turkey.

1. The Process of Acquiring Real Estate by Companies in Turkey

Company owners or partners can purchase real estate in Turkey in the company’s name and account for it in the business’s assets. Depending on the purpose of the property, it must be recorded under different accounting accounts:

• Real estate purchased for investment purposes is recorded under the “252 Buildings” account and depreciated at a rate of 2% per year.
• Real estate bought for resale (commercial purposes) is recorded under the “153 Commercial Goods” account.

When purchasing real estate in Turkey, the company must file a property tax return, but no additional tax office notification is required. As long as the accounting records are compliant with the regulations, there should be no issues regarding taxes.

2. Use of Real Estate Purchased in the Company’s Name in Turkey

A real estate property acquired in the company’s name in Turkey can be used by company partners or employees. However, there are different tax and accounting implications depending on the usage:

• Company partners or employees can reside in a property purchased in the company’s name.
• If the resident is a company partner and a salaried employee, the rent is added to the employee’s salary.
• The determination of the rental value must be done in accordance with Article 13 of the Corporate Tax Law and the “Transfer Pricing Notification No. 1.”
• If the property is used by employees and the area is less than 100 m², it is exempt from income tax. However, the exemption does not apply to the part of the property exceeding 100 m².
• If the company partner is not a salaried employee, a rental invoice must be issued with an 18% VAT, and rent must be collected based on the fair rental value.

3. Advantages of Purchasing Real Estate in Turkey in the Company’s Name

Purchasing real estate in Turkey can provide both financial and tax benefits for companies:

• Depreciation Advantage: Real estate purchased is recorded as a fixed asset and can reduce the company’s taxable profit by showing depreciation expenses. Depreciation can be applied over 50 years.
• Tax Benefits: If the purchased real estate is held in the company’s assets for at least 2 years without being for commercial purposes, it is exempt from VAT on sale. However, the profit from the sale must be kept in a special fund account in the balance sheet for 5 years after the sale.
• VAT Refund and Offsetting: VAT paid for properties used as business premises can be offset against VAT charged on future rental or sales invoices. This reduces the VAT cost for the company.
• Usage as a Company Expense: Expenses related to company employees residing in the property (such as painting or renovations) can be deducted as business expenses. If the property is used by a company partner, the fair rental value must be calculated and recorded as company income. If the property is rented out to a third party, the entire rental income is recorded as company income.
• Balance Sheet Strengthening: Properties recorded as assets strengthen the company’s financial position on the balance sheet. This can help with obtaining credit or enhancing financial credibility. A mortgage can be placed on the acquired property to provide financing for the company.
• Tax Deduction of Loan Interest: If the property is purchased with a bank loan, interest paid on the loan and Banking and Insurance Transactions Tax (BSMV) can be considered as company expenses under Article 40 of the Income Tax Law.

4. Considerations When Purchasing Real Estate for Companies in Turkey

• Proper Tax and Accounting Records: After purchasing real estate in Turkey, the accounting must be done correctly, and tax obligations must be met.
• Purpose of Use: If the real estate is to be purchased for investment purposes, it must be tracked in different accounting accounts compared to real estate for commercial use.
• Compliance with Tax Regulations: Fair rental value calculations and VAT exemptions must be correctly applied.
• Impact on the Company’s Balance Sheet: The property should be acquired according to the company’s long-term strategic goals.

It is possible for companies to acquire real estate in Turkey, and if managed correctly, it can offer financial and tax advantages. However, it is critical that the acquisition is aligned with the company’s business purpose, properly accounted for, and complies with tax obligations.

From VAT advantages and depreciation expenses to strengthening financial structure and rental income, this process offers many opportunities. Companies should consult with accounting and legal experts to navigate the process efficiently.

DISPUTE RESOLUTION METHODS ARISING FROM CORPORATE LAW IN TURKEY

Corporate law is an essential legal field that regulates the legal issues that may arise during the establishment, operation, and liquidation of companies. However, various disputes may occur among shareholders, managers, employees, and other stakeholders during the course of a company’s activities. Effectively and fairly resolving such disputes is crucial for ensuring the sustainability of the company and protecting commercial security.

Dispute resolution methods in Turkey arising from corporate law can be examined under the following headings:

1. Conciliation and Mediation Methods in Turkey

Today, many commercial disputes are resolved through alternative dispute resolution methods before resorting to court. Conciliation and mediation processes in Turkey are methods where the parties come together to resolve their disputes through mutual negotiation.

• Mandatory Mediation: Since 2018, the regulation has made mediation mandatory for many commercial disputes in Turkey. This process allows the parties to reach a resolution quickly and at a low cost.
• Voluntary Mediation: Even if mediation is not required, the parties can voluntarily opt for mediation before filing a lawsuit or during the litigation process to reach a settlement.

2. Arbitration

Arbitration is a method that allows parties to resolve their disputes through independent arbitrators rather than state courts.

• National Arbitration: In Turkey, institutions like the Istanbul Arbitration Center (ISTAC) facilitate the fast and effective resolution of commercial disputes between companies.
• International Arbitration: Disputes between multinational companies are typically resolved through institutions such as the International Chamber of Commerce (ICC) Arbitration Court, the International Centre for Settlement of Investment Disputes (ICSID), or the United Nations Commission on International Trade Law (UNCITRAL). Arbitration is preferred in international trade due to its neutrality, expertise, and flexibility.

3. Judicial Process (Courts)

If alternative dispute resolution methods fail, the parties may resort to legal channels for resolution in Turkey. Disputes arising from corporate law in Turkey are heard by commercial courts.

• General Courts: General disputes within the scope of corporate law are resolved in civil commercial courts.
• Specialized Courts: In some cases, companies governed by specific regulations, such as capital markets law, may be tried in specialized courts.

While the court process is often lengthy and costly, it provides binding decisions that ensure legal security.

4. Expert Opinion and Consultancy Services

Companies can seek expert opinions or consultancy services from legal advisors or experts to prevent disputes or resolve existing disputes in Turkey.

• Legal Consultancy: Consulting legal experts when drafting contracts and legal procedures helps companies prevent potential conflicts.
• Expert Reports: The opinion of an expert in technical or financial matters can help the parties better understand the legal process.
• Internal Dispute Resolution Mechanisms: Some companies set up internal procedures and mechanisms to resolve disputes within the organization. These may include an internal dispute resolution committee, ombudsman, or complaint management processes. Such mechanisms can help resolve disputes before they escalate and maintain relationships among employees or stakeholders.

Disputes arising from corporate law are inevitable due to the nature of commercial relationships. However, effectively resolving these conflicts is vital for maintaining a secure business environment. Various dispute resolution methods, such as conciliation and mediation, arbitration, and judicial processes, allow parties to choose the most suitable method in terms of time and cost. Additionally, companies that seek legal consultancy to manage potential risks proactively are likely to reduce the chances of encountering legal issues in the long run.

TYPES OF LAWSUITS UNDER CORPORATE LAW IN TURKEY

In the field of Commercial and Corporate Law, various types of lawsuits exist to address the legal issues that businesses and companies may face. These lawsuits can be filed to maintain order in the commercial life of companies and to protect their legal rights. Below are the primary types of lawsuits under corporate law in Turkey:

• Unfair Competition Lawsuits: These lawsuits are filed to prevent unfair competition in commercial activities between companies. Such lawsuits can be filed if one company damages the commercial reputation of another, engages in imitation, or gains an unfair advantage in business practices. Unfair competition disturbs market balance, and these lawsuits aim to protect competition.
• Bankruptcy and Postponement of Bankruptcy Lawsuits: These lawsuits are filed when a company is experiencing financial difficulties and seeks bankruptcy or postponement of bankruptcy. Bankruptcy lawsuits occur when a company is unable to pay its debts and is on the brink of financial collapse. Bankruptcy postponement allows the company to delay bankruptcy proceedings and restructure its operations.
• Debt Recovery Lawsuits: These lawsuits are filed by companies to recover debts from other companies or individuals in their commercial relationships. Debt recovery lawsuits come into play when one company demands the payment of money owed by another party.
• Prevention of Trademark Infringement Lawsuits: A company’s trade name is a valuable brand asset. If another company or individual uses the trade name without permission, a lawsuit can be filed to prevent the infringement. These lawsuits aim to protect the trade name and prevent brand violations.
• Tax Law-Related Lawsuits: These lawsuits are filed when a company fails to fulfill its tax obligations or encounters disputes with tax authorities. Disagreements over tax fines, tax liabilities, or tax base assessments are addressed in these lawsuits.
• Lawsuits Against Board Members’ Liability: In joint-stock and limited liability companies, lawsuits are filed against board members for their responsibilities towards the company. These lawsuits are filed if board members misuse their duties, cause harm to the company, or fail to meet legal obligations.
• Lawsuits for the Annulment of General Assembly Decisions: Shareholders who believe that the decisions made at a company’s general assembly violate the company’s internal regulations or legal provisions can file lawsuits to annul these decisions. The goal of these lawsuits is to nullify the general assembly’s resolutions.
• Shareholder Disputes: Disputes between the shareholders of a company typically arise over issues like management, profit distribution, company policies, or strategic decisions. Such lawsuits are common in joint-stock and limited liability companies and involve matters such as the transfer of shares, voting rights, or influence over company management. Shareholder disputes can significantly affect the company’s operations and may need to be resolved through legal proceedings.
• Lawsuits Arising from Corporate Relationships Between Legal Entities: These lawsuits are filed to address disputes arising from the partnership or relationship between two or more companies. Issues such as financial disputes, legal liabilities, or work-sharing conflicts during the partnership lead to these lawsuits.
• Company Liquidation and Dissolution Lawsuits: These lawsuits can be filed by shareholders wishing to terminate the company’s operations or liquidate it. A company can be dissolved for various reasons, such as bankruptcy, shareholder disputes, or failure to achieve its purpose. Proper management of the liquidation process is essential for fulfilling all rights and obligations, and such lawsuits are important in ensuring the correct handling of this process.
• Lawsuits Arising from Commercial Contracts: Companies enter into commercial contracts with suppliers, business partners, customers, or other entities. When these contracts are violated, lawsuits may be filed. These lawsuits typically involve issues such as payment, delivery, quality, and compliance with the terms of the contract.
• Lawsuits for the Protection of Investor Rights: Investors, especially in joint-stock companies, may file lawsuits to protect their shares and ensure their rights are not violated. Lawsuits are also frequently filed to ensure transparency and accountability in company management, as investors have a right to hold the company accountable.
• Intellectual Property Rights Infringement Lawsuits: Companies may file lawsuits to protect their trademarks, patents, designs, and other intellectual property rights. Intellectual property rights infringement, especially when combined with unfair competition, can have severe legal consequences, making these lawsuits crucial.

Corporate law-related lawsuits in Turkey are not limited to the above. Depending on the specific circumstances, companies may need to evaluate the situation with the help of a specialized commercial law attorney to start the legal process and find solutions to their legal problems.

IS IT MANDATORY FOR COMPANIES TO HAVE A LAWYER IN TURKEY?

The obligation to have a lawyer is explicitly stated in the Law No. 1136 on the Legal Profession. According to this law, companies with a capital of 1,250,000 TL or more in 2025 are required to employ a contracted lawyer. However, this obligation does not apply to limited liability companies or partnerships. In other words, having a lawyer is not a requirement for all companies engaged in commercial activities, but in certain situations, having legal counsel can be beneficial and necessary.

WHY IS IT IMPORTANT FOR COMPANIES TO WORK WITH A COMPANY LAWYER?

As the legal processes and commercial operations of companies become increasingly complex, it is crucial for companies to comply with various local and international regulations and laws. Here’s why working with a company lawyer is so important:

1. Reduction and Management of Legal Risks: Companies face numerous legal risks in their operations, such as issues with commercial contracts, labor law problems, intellectual property rights infringements, and unfair competition. A company lawyer identifies these risks early on and takes legal measures to minimize them. They also ensure that contracts are legally compliant and help the company meet all its legal obligations, preventing potential lawsuits.
2. Contract Drafting and Review: Companies enter into various contracts with suppliers, customers, partners, and employees. Proper preparation and protection of the parties’ rights in these contracts are essential. A corporate lawyer reviews these contracts legally, preventing potential disputes and ensuring that the terms are enforceable and compliant with the law. By reviewing contract details, they help prevent financial losses and legal complications.
3. Tax Compliance and Legal Consulting: Tax laws are one of the most critical areas for companies and can often be complex and subject to changes. A corporate lawyer provides guidance on fulfilling tax obligations and helps minimize the tax burden within legal limits. They also develop strategies to protect the company from tax audits or penalties.
4. Employee Rights and Labor Relations: Companies have legal responsibilities when managing their relationships with employees. Labor laws, social security obligations, workers’ rights, recruitment, dismissal processes, and vacation entitlements must be followed within constantly changing legal frameworks. A company lawyer drafts employment contracts in line with legal standards and ensures compliance with workplace regulations. They also offer legal support in case of disputes, protecting the company from potential lawsuits.
5. Supporting Business Strategies: A corporate lawyer doesn’t only deal with legal issues; they also play an essential role in supporting business strategies. For example, in mergers, acquisitions, restructuring, or international expansion, a company lawyer ensures that these processes comply with the law. They assess whether future commercial activities might pose legal risks and advise accordingly.
6. Resolution of Legal Disputes: Every company encounters legal disputes from time to time, whether related to contract breaches, unfair competition, labor relations, or intellectual property rights. A corporate lawyer manages these disputes, protecting the company’s interests in court if necessary. They can also develop strategies to resolve issues before they escalate to litigation, such as through mediation or settlement.
7. International Trade and Regulations: Companies involved in international trade must comply with the legal regulations and trade agreements of the countries in which they operate. A corporate lawyer tracks the trade laws of these countries and international treaties, managing the company’s legal risks. They also ensure that contracts and trade activities in foreign operations are legally sound.
8. Privacy and Data Protection: Companies gather and process large amounts of data, including customer information, trade secrets, and internal documents. A company lawyer ensures compliance with data protection laws and drafts confidentiality agreements to protect company information. In case of a data breach, the lawyer will defend the company legally.

Working with a corporate lawyer is not just a legal requirement but also a strategic investment for the long-term success of the company. Managing legal risks, ensuring tax compliance, securing commercial contracts, and addressing complex issues like labor rights are all areas where professional legal support can enhance a company’s operations and prevent legal problems. For larger or more complex companies, having a lawyer on board is essential to manage the legal processes effectively and meet regulatory obligations.

AREAS WHERE COMPANIES NEED LEGAL CONSULTANCY UNDER CORPORATE LAW

Corporate law is a broad area that requires legal support and consultancy at every stage of a company’s operations. To ensure the smooth continuation of commercial activities, companies need expert legal consultancy on various issues such as contract drafting, mergers and acquisitions, debt collection, and many other matters.

The main consultancy services provided under corporate law include:

1. Collection of Commercial Debts and Consultancy for Companies: Legal consultancy is provided for companies in recovering their commercial debts, tracking receivables, and handling related legal processes.
2. Legal Consultancy on Mergers, Divisions, and Transfers: Companies undergoing mergers, divisions, or transfers receive legal support to ensure that these processes are completed smoothly and in compliance with the law.
3. Agency and Distribution Agreements: Consultancy services include drafting, signing, auditing, and managing legal cases related to agency and distribution agreements, which govern the relationships for product distribution and marketing between parties.
4. Financial Leasing Contracts: Legal support is provided in drafting, signing, and auditing financial leasing agreements and managing any related legal disputes.
5. Letter of Intent and Offer Letters: Consultancy on the preparation and evaluation of letters of intent and offer letters used in business negotiations.
6. Share Transfer Agreements and Partnership Agreements: Legal services are provided for drafting share transfer agreements and partnership contracts to regulate share transactions and business structures.
7. Confidentiality Agreements: Legal support is offered in preparing confidentiality agreements and personal data protection agreements to safeguard a company’s trade secrets.
8. General Sales Terms, General Purchasing Terms, Sales, and Purchase Contracts: Companies receive assistance in drafting and auditing purchase and sales contracts, along with general terms and conditions for commercial transactions.
9. Loan Contracts: Legal consultancy is provided for companies in preparing and auditing loan agreements used for obtaining financial resources.
10. Partnership Structures and Representation Structures: Legal support is offered to companies in structuring their ownership and governance models.
11. Regular and Extraordinary General Assembly Preparations and Meetings: Legal guidance is provided for organizing general meetings in accordance with legal requirements and ensuring that necessary decisions are made.
12. Board of Directors Meeting Consultancy: Legal advice is offered to ensure that the board of directors meetings are conducted within a legal framework.
13. Compliance of Public Companies with CMB Regulations: Consultancy is provided to ensure that publicly traded companies comply with the regulations of the Capital Markets Board (CMB).
14. Capital Increase and Decrease: Legal support is given for companies making changes to their capital structure through capital increase or decrease.
15. Change of Company Type: Legal consultancy is provided when companies wish to change their business type.
16. Corporate Operations Consultancy: This includes preparing corporate documents such as board decisions, signature circulars, and amending the company’s articles of association.
17. Legal Disputes and Transactions Arising from Securities Law: Consultancy is offered for companies involved in securities-related transactions and any related legal disputes.

These consultancy services are critical for companies to effectively manage their legal processes and ensure compliance with legal requirements, contributing to smooth operations and minimizing potential legal risks.