A company type conversion in Turkey allows an existing company to adopt another legal form without liquidation and, as a rule, without losing its legal identity. A limited company may become a joint-stock company while its assets, contracts, receivables and liabilities remain with the same entity. The process is nevertheless more than a name change: Turkish Commercial Code No. 6102 requires a plan, disclosure to shareholders, the correct voting threshold and trade registry registration.
When is a company type conversion in Turkey appropriate?
Businesses consider conversion when preparing for investment, making future share transfers easier, strengthening corporate governance or changing the responsibility structure of shareholders. The decision should compare minimum capital, management, transfer restrictions, information rights, additional payment obligations and the company’s financing strategy.
Articles 180-194 of the Turkish Commercial Code list the permitted routes. A capital company may convert into another form of capital company or a cooperative. Separate routes exist for collective and commandite companies. The intended conversion must therefore be checked against the statutory list before documents are prepared.
How is a company type conversion in Turkey prepared?
Management first reviews trade registry records, constitutional documents, shareholders, paid capital and financial statements. It then designs the future trade name, registered office, activities, capital, ownership and governing body required for the new form.
The management body prepares a written conversion plan (tür değiştirme planı). The plan states the old and new trade names and registered office, includes the new articles of association, and explains the number, class and amount of shares or interests each owner will hold after conversion. It must be submitted to the general assembly.
An interim balance sheet is required if more than six months have passed between the balance-sheet date and the conversion report. It is also required when significant changes have occurred in the company’s assets, even within six months. A major disposal, substantial borrowing, capital loss or material dispute may be relevant.
What must the conversion report explain?
Management prepares a written report explaining the legal and economic purpose and consequences, compliance with formation requirements of the new form, the new articles, the exchange ratio and any additional payment, performance or personal-liability obligations affecting shareholders.
A small or medium-sized enterprise may omit the report only if every shareholder consents. Unanimity among those attending is not enough. An absent or dissenting shareholder means that the report must be produced.
The plan, report, financial statements for the previous three years and any interim balance sheet must be made available at least thirty days before the decision. Shareholders are entitled to free copies and must be informed of their inspection right.
Which vote is required for a company type conversion in Turkey?
The threshold depends on the existing and future company forms. For a Turkish limited company, the special rule requires approval by three quarters of all shareholders, provided that they also represent at least three quarters of the capital. Shareholder headcount and capital percentage are separate tests.
In a 2026 decision, the 11th Civil Chamber of the Turkish Court of Cassation considered a limited company with four shareholders where only two voted for conversion. The statutory shareholder majority had not been achieved. The Court held that the resolution was not merely voidable; it was legally non-existent. Voting calculations and proxies should therefore be verified before the meeting begins.
How does registration work?
After shareholder approval, management applies to register the conversion and the new articles. The company type conversion in Turkey becomes legally effective upon registration and is announced in the Turkish Trade Registry Gazette.
The filing commonly includes the conversion plan, report or unanimous waiver, general assembly resolution, new articles, financial statements, any interim balance sheet, management declarations and signature documents. The relevant registry’s current checklist should be confirmed before filing. Advice in Turkish commercial and corporate law helps keep the corporate, accounting and registry documents consistent.
What happens to contracts, employees and liabilities?
The converted company is the continuation of the former form. Property, receivables and debts generally remain with the same legal entity. However, financing agreements, regulated licences and important commercial contracts may require notice or consent when the legal form changes. Those clauses should be reviewed before the resolution.
Shareholders’ interests and rights must be preserved. Non-voting or privileged shares require equivalent rights or, where the statute permits, appropriate compensation. Protective provisions also apply to employees and to certain continuing personal liabilities of former partners.
Conversion does not eliminate debt or cure an existing breach. Banks, public authorities and contracting parties should receive any contractually required notice, and registers for real estate, vehicles, intellectual property and licences may need administrative updates even though ownership remains with the same entity.
What are the Turkish tax consequences?
Articles 19-20 of Corporate Tax Law No. 5520 treat qualifying conversions as transfers for tax purposes. This should not be simplified into “every conversion is tax-free.” Book values, filings, deadlines, carried-forward losses, real estate and indirect taxes require transaction-specific review by tax and accounting advisers.
How long does conversion take and what does it cost?
A company with organised records and aligned shareholders may complete preparation and registration within several weeks. An interim balance sheet, unpaid capital, privileged rights, foreign shareholder documents or sector approvals will extend the timetable.
Costs vary with registry and publication charges, notarisation or translation, accounting work and legal advice. A realistic budget should also include post-registration updates to banks, licences, contracts and internal systems.
What mistakes commonly invalidate or delay conversion?
Common errors include choosing the future form without strategic comparison, overlooking the interim-balance-sheet test, waiving the report without every shareholder’s consent, calculating only the capital majority, and ignoring the thirty-day inspection period. Treating the company as converted before registration is another serious mistake.
The meeting minutes should record attendance, proxies, capital represented, votes and any dissent accurately. A registry filing cannot reliably repair a resolution that never met the statutory threshold.
Frequently asked questions
Does conversion create a new legal entity?
No. Once registered, the existing entity continues in the new legal form.
Must every shareholder consent?
Not in every conversion. The applicable majority depends on the route. Some simplifications, including an SME’s waiver of the report, require unanimous consent.
When does the new form become effective?
The internal resolution is not sufficient. Legal effectiveness begins upon trade registry registration.
Are the company’s debts cancelled?
No. Continuity means liabilities survive the company type conversion in Turkey.
This article provides general information on Turkish law and is not legal advice. Corporate and tax consequences must be assessed for the specific company.
