For Turkish citizens and entrepreneurs living in the Netherlands, doing business in Turkey, setting up a company, becoming a partner in an existing company or pursuing their rights in a family business often requires cross-border legal planning. Setting up a company in Turkey, the shareholder structure, management, general meeting resolutions, share transfers, leaving a company, dissolution or mergers and acquisitions must be assessed not only as business decisions but together with legal, tax and administrative procedures.
For people living in the Netherlands in particular, certain questions often come up about company matters in Turkey: “Do I need to go there in person to set up a company in Turkey?”, “How can I leave a company I am a partner in?”, “What can I do if my rights as a shareholder are being violated?”, “Can a general meeting or board resolution be annulled?”, “Can I manage my company in Turkey from the Netherlands?” The answers depend on the type of company, the shareholder structure, the articles of association, the resolutions adopted and the nature of the specific dispute.
In short, commercial and company law in Turkey is not just about setting up companies. It covers a wide area, from formation and day-to-day advice to disputes between partners, leaving a company, general meeting resolutions and mergers and acquisitions.
Hukukcum.nl was created to help Turkish people living in the Netherlands plan their business activities and company matters in Turkey more securely, and to draw up the right legal roadmap on partnership, decision-making, disputes and representation.
Setting Up a Company in Turkey
The process of setting up a company in Turkey should be planned according to the type of activity, the number of partners, the capital structure and the business model. The most commonly chosen company types are the limited company and the joint-stock company. Sole proprietorships, general partnerships or other structures may also be considered for certain activities.
A person living in the Netherlands can set up a company in Turkey. Before formation, however, the right company type must be chosen, shareholdings clarified, the capital structure determined, the articles of association drafted and powers of representation regulated carefully.
In short, when setting up a company in Turkey, it is important not just to register with the trade registry but to build a legal structure that prevents future partnership and management problems from the outset.
What should be planned when setting up a company?
Before setting up a company in Turkey, the following should be assessed:
- Will it be a limited or a joint-stock company?
- Who will the partners be?
- How much capital will there be and how will it be paid?
- How will the company’s objects be worded?
- Who will represent the company?
- Who will be the managers or board members?
- Will there be a separate shareholders’ agreement?
- How will share transfers, withdrawal or exclusion be regulated?
- How will tax, accounting and banking be handled?
- How will the partner in the Netherlands be represented in Turkey?
Many trade registry procedures in Turkey are carried out through electronic systems. MERSİS is the central system used for the electronic registration, amendment and deregistration of companies and businesses.
Can a company in Turkey be set up from the Netherlands?
People living in the Netherlands can follow the company formation process in Turkey with the support of a lawyer and an accountant, using an appropriate power of attorney and documents. However, completing the formation is not enough. The company’s bank account, tax registration, signing authority, accounting and business permits must also be planned.
For partners living abroad, one of the most important points is the power of representation. If it is not clearly determined who represents the company and within what limits, serious disputes may arise between partners later.
Leaving a Company
Leaving a company becomes an issue especially when trust between partners has broken down, there are disagreements about management, or one partner no longer wants to continue in the company. However, leaving a company does not happen just by saying “I am leaving the partnership”.
Depending on the type of partnership, the articles of association, any shareholders’ agreements and the company’s current situation, different routes may be considered. A share transfer, a right of withdrawal, an action for withdrawal for just cause, dissolution of the company or an agreed separation between partners are some of these routes.
In short, the aim when leaving a company is to end the partner’s ties with the company lawfully while protecting their rights. The value of the shares, company debts, receivables, dividends, power of representation and non-competition must be assessed together.
What should be considered when leaving a partnership?
For a person wanting to leave a company, the following questions are important:
- Is it a limited or a joint-stock company?
- Is a share transfer possible?
- Is the consent of the other partners required?
- Are there special provisions in the articles of association?
- Does the partner owe the company money or have claims against it?
- Are there dividends or claims from previous periods?
- Will the departing partner’s power of representation be revoked?
- How will the value of the shares be calculated?
- Will withdrawal be sought through the courts?
- Are there non-competition or confidentiality obligations?
For a partner living in the Netherlands, planning documents and representation is particularly important in this process. If the partner cannot attend meetings in Turkey, they can handle the share transfer or litigation through a power of attorney.
How are company shares transferred?
The transfer of company shares is subject to different procedures depending on the company type. In limited companies, share transfers are often subject to stricter formal and approval requirements. In joint-stock companies, different procedures may apply depending on the type of shares and the articles of association.
In a share transfer, not only the price but also the validity of the transfer, trade registry procedures, company books and shareholder records are important. Incomplete or improper procedures can lead to disputes about partner status and share rights later.
Dissolution of a Company
Dissolution is one of the routes used to end a company’s legal existence. It can happen by agreement of the partners or, where there are just causes, through the courts. Dissolution may be discussed particularly where there is constant disagreement between partners, the company cannot achieve its purpose, there is a management crisis or a serious loss of trust.
In short, dissolution can mean ending the company’s activities and entering liquidation. But dissolution is not always the first solution. In some cases, a partner’s withdrawal, a share transfer, a change of management or restructuring of the company may be more appropriate.
When does dissolution come into question?
Dissolution may be considered especially when:
- There is constant and irresolvable disagreement between partners,
- The company’s purpose has become impossible to achieve in practice,
- Management of the company is deadlocked,
- The partners do not trust each other,
- The company is making losses and cannot continue,
- Company assets are being mismanaged,
- One partner constantly violates the others’ rights,
- The company is not operating in practice but still exists legally.
Before filing for dissolution, the company’s financial situation, articles of association, shareholder structure, trade registry records, general meeting resolutions and past transactions should be examined.
Is another solution possible instead of dissolution?
Not every partnership dispute requires dissolution. Sometimes a share transfer, a partner’s withdrawal, amending the articles of association, restructuring the management or an agreement between the partners is a more workable solution.
Because dissolution has serious consequences, it should be considered carefully. Pursuing dissolution without considering the company’s value, employees, customers, contracts and ongoing business relationships can create new problems.
Mergers and Acquisitions
Mergers and acquisitions are important business processes that companies use to grow, restructure, attract investment, change ownership or expand their field of activity. These transactions should be carried out not only through commercial negotiation but together with legal review and document preparation.
In mergers and acquisitions, the company’s debts, receivables, contracts, employees, litigation, tax position, intellectual property rights and management structure must be examined carefully. Otherwise, the acquiring person or company may later face unexpected liabilities.
In short, mergers and acquisitions are not just share transfers or share sales. The legal, financial and commercial position of the company to be acquired or merged with must be examined from the start.
Why is due diligence important?
A legal review before an acquisition reveals the company’s hidden risks. This review usually covers:
- The articles of association,
- The shareholder structure,
- The history of share transfers,
- Trade registry records,
- General meeting and board resolutions,
- Company debts and receivables,
- Pending litigation,
- Employment contracts and employee rights,
- Lease, dealership, supply and customer contracts,
- Tax and social security (SGK) obligations,
- Trademark, patent and intellectual property rights,
- Real estate, vehicles and other assets.
For investors or company partners living in the Netherlands, carrying out this review before acquiring a company in Turkey helps prevent disputes that could arise later.
What should be considered in the acquisition agreement?
The acquisition agreement should clearly regulate the scope of the shares, the price, the payment schedule, representations and warranties, liability for debts, non-competition, confidentiality, closing conditions and the dispute resolution method.
Vague agreements can lead to serious disputes, especially in cross-border business relationships. In an acquisition, attention should therefore be paid not only to the payment and shareholding but also to liabilities after the transaction.
General Meeting Resolutions
The general meeting is the body in which the partners or shareholders take the company’s fundamental decisions. Its powers vary by company type; but important decisions such as profit distribution, election of management, amendment of the articles of association, capital increases, mergers, demergers, conversion or dissolution may come before the general meeting.
In short, general meeting resolutions directly affect the direction of the company and the rights of the partners. The notice of meeting, agenda, quorum, voting and minutes must therefore be prepared lawfully.
What problems can arise at the general meeting?
The following problems are common in general meeting procedures:
- Partners not properly notified of the meeting,
- Resolutions adopted on items not on the agenda,
- Voting rights obstructed,
- Meeting and voting quorums not observed,
- Minutes not reflecting what actually happened,
- Minority rights violated,
- Disputes about profit distribution,
- Objections to the discharge of management,
- A general meeting resolution contrary to the articles of association.
For partners living in the Netherlands, following notices of general meetings, attending meetings, voting by proxy and the deadlines for challenging resolutions are especially important. A partner who does not attend a meeting may only notice the consequences of a resolution later.
Board Resolutions
In joint-stock companies, the board of directors is the company’s management and representative body. In limited companies, the managers or the board of managers play a similar role in day-to-day operations. Decisions of the management body can directly affect the company’s business activities, contracts, staff, financial transactions and powers of representation.
In short, board resolutions can be decisive in the company’s day-to-day and strategic management. They must be taken within the limits of authority and procedure, in the company’s interest and in good faith.
What risks are there in management decisions?
The following risks may arise in decisions of the management body:
- Unauthorised transactions,
- Decisions contrary to the company’s interest,
- Information withheld from partners,
- Mismanagement of company assets,
- Improper borrowing,
- Abuse of the power of representation,
- Company resources used for the benefit of one partner,
- Conflicts of interest in relationships with affiliated or family companies.
Partners living in the Netherlands often do not take part in the day-to-day management of the company. Regularly reviewing management decisions, checking trade registry records and exercising the right of access to company documents are therefore important.
Annulment of General Meeting and Board Resolutions
If general meeting or board resolutions are contrary to the law, the articles of association, good faith or the partners’ fundamental rights, their annulment or nullity may be at issue. Which legal route is used against which resolution depends on the type of company and the nature of the resolution.
In short, annulment of company resolutions allows improper or rights-infringing resolutions to be reviewed by the courts. However, deadlines, standing to sue, the content of the resolution and the evidence must be assessed carefully.
Which resolutions can be annulled?
Annulment or nullity may be at issue in particular for:
- General meeting resolutions adopted after improper notice,
- Resolutions adopted contrary to the agenda,
- Resolutions adopted while obstructing voting rights,
- Resolutions that violate minority rights,
- Resolutions contrary to the articles of association,
- Resolutions that unjustly block profit distribution,
- Resolutions exceeding the authority of the management body,
- Resolutions aimed at excluding a partner,
- Resolutions that damage the company’s assets.
In such cases, the notice of meeting, agenda, attendance list, minutes, voting results, articles of association and company books are important evidence.
Can a partner in the Netherlands file an action to annul a resolution?
A partner or shareholder living in the Netherlands can take legal action against company resolutions in Turkey. However, standing to sue, deadlines and procedural conditions must be assessed case by case. Because delay can lead to loss of rights in annulment actions, it is useful to get legal support as soon as the resolution becomes known.
Disputes Between Partners
Disputes between partners are among the most sensitive areas for companies. Especially in family businesses, partnerships between friends or structures with investment from abroad, management can become deadlocked when trust breaks down. Such disputes also directly affect the company’s business activities.
In short, in disputes between partners, it must be assessed not only who is right, but also whether the company can continue, how the partner’s rights will be protected and which solution causes the least harm.
What disputes arise between partners?
Common partnership disputes in practice include:
- Dividends not distributed,
- Access to company records blocked,
- A partner excluded from management,
- Company assets mismanaged,
- One partner using company resources personally,
- Capital contribution obligations not fulfilled,
- Disagreement about share transfers,
- Requests to leave or to exclude someone from the company,
- Management problems between generations in family businesses,
- The partner abroad not being informed.
Litigation is not always the solution in these disputes. Sometimes a shareholders’ agreement, a share transfer, reorganising management powers or mediation can be considered. But where there is a risk of losing rights, legal steps such as a lawsuit, an interim injunction or annulment of a resolution may be needed.
Why are the rights to information and inspection important?
One of a partner’s most fundamental rights is to obtain information about the company’s situation. This right is even more important for partners living in the Netherlands, because following the company’s day-to-day operations remotely can be difficult.
Reviewing company records, financial statements, resolution books, general meeting minutes and trade registry records allows possible violations of rights to be spotted early.
Corporate Advice
Corporate advice aims to ensure that the company operates lawfully and with reduced risk not only when disputes arise but also in its day-to-day activities. Contracts, the shareholder structure, trade registry procedures, management decisions, employee relations, debt collection, dealer and supplier relationships, use of trademarks and internal procedures can all be part of this advice.
In short, corporate advice aims to lay the right legal foundation before problems arise rather than looking for solutions afterwards.
What does corporate advice cover?
Corporate advice may cover:
- Company formation and drafting the articles of association,
- Shareholders’ agreements,
- General meeting and board procedures,
- Trade registry procedures,
- Share transfers and changes in ownership,
- Drafting commercial contracts,
- Collecting company receivables,
- Employment law and staff procedures,
- Trademark and intellectual property rights,
- Lease, supply, dealership and distribution agreements,
- Internal authority and signing arrangements,
- Risk analysis before disputes arise.
The fact that commercial record tools such as viewing announcements, certified copies and trade name searches are available through the Turkish Trade Registry Gazette shows how important it is to keep track of records in company matters.
Why is advice important for company partners living in the Netherlands?
A company partner or investor living in the Netherlands may not always be able to follow the day-to-day operations of the company in Turkey closely. Regularly checking the company’s trade registry records, resolutions, contracts and shareholder structure therefore reduces risks.
Especially where there is a family business, investment partnership or remotely managed company in Turkey, written agreements and a clear structure of authority are very important. Relationships based on trust are valuable in business; but without written arrangements, proof can become a problem in a dispute.
Frequently Asked Questions
I live in the Netherlands. Can I set up a company in Turkey?
Yes. People living in the Netherlands can follow the company formation process in Turkey with the support of a lawyer and an accountant, using the necessary documents and an appropriate power of attorney.
Which type of company should I choose in Turkey?
This depends on the activity, the number of partners, the capital structure and the management plan. Limited and joint-stock companies are commonly chosen; but each case must be assessed separately.
Can I leave the partnership as a company partner?
Yes, but the route depends on the company type, the articles of association and the situation between the partners. A share transfer, an agreed separation, an action for withdrawal or dissolution may be considered.
Can a company be dissolved if the partners disagree?
In some cases, dissolution for just cause can be requested. But dissolution has serious consequences. Options such as a share transfer, withdrawal, a change of management or settlement should be assessed first.
Can a general meeting resolution be annulled?
An action for annulment may be possible against general meeting resolutions contrary to the law, the articles of association or partnership rights. Deadlines and standing to sue must be assessed case by case.
What can be done if a board resolution is unlawful?
Depending on the nature of the resolution, annulment, nullity, a liability action, an injunction or other legal routes may be considered. The content and effect of the resolution should be examined first.
Can a partner in the Netherlands inspect company records in Turkey?
Company partners have rights to information and inspection. However, the scope of these rights must be assessed according to the company type, shareholder structure and the specific situation.
Is a legal review needed before a merger or acquisition?
Yes, a legal review is very important. Proceeding without examining the company’s debts, litigation, contracts, employees, share structure and trade registry records can be risky.
Is a shareholders’ agreement necessary?
It is not mandatory but is useful in most partnerships. Setting out matters such as share transfers, profit distribution, management, non-competition, withdrawal and dispute resolution in writing from the start reduces future problems.
When Should You Consult a Lawyer?
If you plan to set up a company in Turkey, are going to become a partner in an existing company, want to leave a partnership or a dispute has started between company partners, it is advisable to get legal support from a lawyer. Company resolutions, share transfers, management powers and trade registry procedures in particular should be assessed without delay.
You should consult a lawyer in the following situations:
- Setting up a company in Turkey is planned,
- The shareholder structure has not been put in writing,
- A company partner cannot obtain information,
- Dividends are not being distributed,
- A general meeting or board resolution is to be challenged,
- Leaving the company or a share transfer is on the agenda,
- Dissolution of the company is being considered,
- A merger or acquisition is planned,
- Company assets are believed to be mismanaged,
- A partner in the Netherlands wants to be represented in Turkey.
Consulting a lawyer does not only mean filing a lawsuit. In many commercial disputes, the right contract, sound negotiation, a timely formal notice, checking the trade registry and reviewing company documents can reduce the risk of litigation. But if partnership rights are being violated, legal routes such as annulment of resolutions, a liability action, a share transfer, withdrawal or dissolution must be assessed without delay.
Conclusion
For Turkish people living in the Netherlands, commercial and company law in Turkey covers a wide area, including company formation, leaving a partnership, dissolution, mergers and acquisitions, general meeting and board resolutions, annulment of resolutions, disputes between partners and corporate advice.
The right start in these processes is to examine together the company type, shareholder structure, trade registry records, articles of association, past resolutions and the business relationship between the parties. In company matters, not only today’s problem but also future risks must be taken into account.
Hukukcum.nl was created to help Turkish entrepreneurs, investors and company partners living in the Netherlands pursue their commercial rights in Turkey more securely. The right documents, the right agreements and the right legal route strengthen both commercial security and the sustainability of partnership relationships in company matters.
