Other Business Company Structure Under Turkish Law

In addition to the more prevalent joint stock company and limited liability company, the Turkish Commercial Code also allows for the establishment of general partnerships ,limited partnerships and partnerships limited by shares.

General partnerships

General partnerships are companies established, and maintained, by at least two individuals for the purpose of operating a commercial undertaking and where the shareholders are liable without limitation towards company creditors. Each shareholder of a general partnership has management rights, however, the articles of association may bestow management upon one shareholder or multiple or all shareholders. In the event of a shareholder being granted management rights through the articles of association, he/she may only be removed from such position through a court judgment based on justiiable reasons. However, shareholders who have been granted management rights through a decision of the shareholders may be removed from their positions upon a majority vote of the shareholders.

Although a manager may perform all acts and transactions required for the company to achieve its purpose of establishment, all actions and transactions which are outside the ordinary scope of business require the unanimous vote of the shareholders.

Limited partnerships

Limited partnerships are companies established for the purpose of operating a commercial undertaking and where certain shareholders have limited liability and certain shareholders have unlimited liability towards creditors. As such, limited partnerships must have at least two shareholders. It is worth noting that if a limited liability or joint stock company were to become a shareholder in a limited partnership, such company may only assume limited liability towards creditors. The shareholders with unlimited liability may stipulate all types of assets and rights as share capital, including cash, real estate and commercial good-standing, whereas the shareholders with limited liability may only stipulate assets and rights which are cash-convertible.

Limited partnerships may only be managed and represented by the shareholders with unlimited liability. Furthermore, shareholders with limited liability may not hinder the acts or actions of the shareholders who have unlimited liability and management rights. In this regard, shareholders with limited liability only have voting rights with respect to actions and transactions which are not in the ordinary course of business and afect relations between the shareholders, such as mergers and changes to the articles of association.

Partnerships limited by shares

In contrast to general partnerships and limited partnerships, whose share capital are not divided into shares, the share capital of partnerships limited by shares, as the name suggests, is divided into shares, which are transferrable. Partnerships limited by shares must be established and maintained by at least ive shareholders, at least one of whom must have unlimited liability towards creditors.

Only shareholders with unlimited liability may have management rights in partnerships limited by shares and, although such companies have no board of directors, the shareholder(s) with management rights have the duties and responsibilities of the board of directors of a joint stock company.