I. Introduction
Law No. 7511 on Amendments to the Turkish Commercial Code and Certain Other Laws, published in the Official Gazette dated 29 May 2024 and numbered 32560, introduced Provisional Article 15 into the Turkish Commercial Code, which set new minimum capital requirements in Turkey. The provision requires joint-stock and limited companies whose capital remains below the new minimum amounts under Articles 332 and 580 of the Turkish Commercial Code to complete the required capital compliance by 31 December 2026.
Joint-stock companies must therefore increase their capital to at least TRY 250,000, while limited companies must increase their capital to at least TRY 50,000. A separate TRY 500,000 threshold applies to the initial and issued capital of non-public joint-stock companies that have adopted the registered capital system. Failure to comply within the prescribed period results in deemed dissolution for joint-stock and limited companies or, where the relevant conditions are met, deemed exit from the registered capital system.
The compliance process is not limited to adopting a capital increase resolution. Proper convening of the general assembly, the source of the capital increase, shareholder pre-emptive rights, foreign shareholder approvals, registration of the amendment to the articles of association and the transaction timetable must be planned together.
II. Scope Of The Compliance Obligation
The obligation introduced by Provisional Article 15 applies to joint-stock and limited companies whose capital remains below the new statutory minimums, irrespective of their business activity, turnover, local or foreign ownership, or whether they are operationally active. Companies that have remained dormant, are retained as special-purpose entities within a group or have a single shareholder must therefore also be reviewed by reference to their existing registered capital.
The assessment should be based on the company type recorded in the trade registry and the amount of its registered or issued capital. Balance-sheet equity above the statutory minimum, substantial turnover or full payment of existing capital commitments does not remove the compliance obligation while the registered capital remains below the applicable threshold. Companies subject to higher minimum capital requirements under sector-specific legislation must continue to satisfy those additional requirements; reaching the Turkish Commercial Code minimums does not replace the sectoral thresholds.
III. General Assembly And Quorum Exceptions For The Capital Increase
Special Meeting And Decision Quorums
The second paragraph of Provisional Article 15 provides that no meeting quorum is required for a general assembly convened to increase the capital to the amounts specified in Articles 332 and 580 of the Turkish Commercial Code, that the resolution is adopted by a majority of the votes present and that privileges may not be exercised against the resolution. Accordingly, any enhanced meeting or decision quorums that a company may have adopted for amendments to the articles of association and/or capital increases do not apply to a capital increase resolution adopted solely for compliance with these minimum amounts.
Notice, Representation And Registration Timetable
The removal of the meeting quorum does not exempt the general assembly from the applicable notice and meeting procedures. In both joint-stock and limited companies, the general assembly must be convened by the competent corporate body in accordance with the Turkish Commercial Code and the company’s articles of association. The notice must comply with the requirements concerning the agenda, meeting place and time, and the shareholders’ participation and representation rights.
These requirements are particularly important to the timetable of companies with multiple shareholders or foreign ownership. Updated shareholder addresses, corporate approvals of foreign legal-entity shareholders, powers of attorney, apostille formalities and translations should be completed before the meeting date. Defects in the notice or representation process may expose the resolution to annulment or prevent completion of the registry filing.
The quorum exception under Provisional Article 15 applies only to the capital increase resolution adopted to reach the minimum amounts under Articles 332 and 580. If other amendments to the articles of association or separate agenda items are considered at the same meeting, the relevant ordinary or enhanced quorums must be applied to those matters separately. Since registration is also required for the capital increase to take legal effect, the general assembly date should be scheduled so that the trade registry process does not extend beyond 31 December 2026.
IV. Funding, Pre-Emptive Rights And Shareholder Balance
Funding The Capital Increase
Although the amount required for compliance may appear limited for some companies, the allocation of the funding burden among shareholders and the subscription of the new shares may directly affect the shareholder balance. This is particularly relevant for companies with multiple shareholders, existing shareholder disputes or entities that have remained dormant for an extended period.
Whether the capital increase will be funded through cash subscriptions, internal resources or other equity items permitted by law should be assessed together with the company’s financial statements, outstanding capital commitments and the funding capacity of its shareholders. The selected method determines whether additional cash contributions are required, the timing of the increase and whether the existing ownership percentages can be maintained.
Pre-Emptive Rights And Foreign Shareholder Approvals
In a cash capital increase, shareholders of a joint-stock company have pre-emptive subscription rights under Article 461 of the Turkish Commercial Code, while partners of a limited company have the corresponding right under Article 591. The special meeting and decision quorum rules under Provisional Article 15 do not remove these rights. Any restriction or exclusion of pre-emptive rights remains subject to the just-cause and decision requirements under the relevant general provisions, and shareholders must be granted at least fifteen days to exercise the right.
The intended participation of each shareholder, the treatment of unexercised pre-emptive rights, funding commitments under shareholders’ agreements and possible changes in ownership percentages should therefore be addressed before the resolution is adopted. For foreign-owned Turkish subsidiaries, parent company approvals, intra-group debt-to-equity planning, foreign currency transfers, and tax and accounting consequences should be assessed within the same timetable.
V. Legal Consequences Of Deemed Dissolution And Exit From The Registered Capital System
Deemed Dissolution And Entry Into Liquidation
Under Provisional Article 15, joint-stock and limited companies that fail to increase their capital to the statutory minimum within the prescribed period are deemed dissolved. Deemed dissolution is the termination of the company by operation of law upon the occurrence of the statutory event, without the need for a separate general assembly resolution or court judgment. The company is not automatically deleted from the trade registry at that point; its termination is registered and announced, and the liquidation process follows.
Under Article 533 of the Turkish Commercial Code, a terminated joint-stock company enters liquidation, retains its legal personality until completion of the liquidation and uses its trade name with the words “in liquidation”. The powers of its corporate bodies are limited to the purposes of the liquidation. Article 643 applies the liquidation provisions governing joint-stock companies to limited companies as well.
Liquidation Process And Timely Registration
Once the company enters liquidation, it may no longer continue its ordinary commercial activities in the same manner. Existing rights and liabilities are settled through the liquidation process: receivables are collected, debts are paid and any remaining assets are distributed in accordance with the liquidation rules. Compliance therefore requires more than adopting a general assembly resolution before 31 December 2026; the capital increase must be registered by that date in order to take legal effect.
VI. General Assessment
The company’s legal position under Provisional Article 15 must first be identified correctly for the 31 December 2026 compliance exercise. Joint-stock and limited companies under the ordinary capital system and non-public joint-stock companies using the registered capital system are not subject to the same consequence; the company’s capital amount and the capital system to which it is subject must therefore be examined separately.
The quorum exceptions under Provisional Article 15 do not remove the separate requirements concerning general assembly notice, representation documents, pre-emptive rights or registration of the capital increase. The funding method and the shareholders’ intended participation should also be determined before the resolution is adopted. Companies with multiple shareholders or foreign ownership should allow sufficient time for shareholder and group approvals before the deadline.
Non-compliance results in termination by operation of law and entry into liquidation for joint-stock and limited companies below the general minimum capital amounts, while the relevant non-public joint-stock companies using the registered capital system are deemed to have exited that system. Minimum capital compliance should therefore be treated not merely as a trade registry filing, but as a corporate-law process affecting both corporate continuity and the economic position of the shareholders.
