Liquidation of Business in Turkey

A joint stock or limited liability company may be dissolved based on the grounds for dissolution set forth under its articles of association, by a general assembly resolution, or upon the declaration of bankruptcy by competent court. They may also be dissolved by a competent court’s verdict upon the application of either of the shareholders, creditors or the Ministry of Trade if a board of directors cannot be formed or due to the inability of the general assembly to convene.

Minority shareholders are entitled to request the dissolution of the company from a competent court on the basis of valid grounds. Although there is no legislation governing what would be considered valid grounds within the context of the termination of a company, court precedents indicate that the continuous breach of the shareholding rights of minority shareholders by the majority shareholders, or the majority shareholders placing a higher emphasis on their personal interests rather than the interests of the company, would be considered examples of valid grounds.

Joint stock companies may also be dissolved upon the fulilment of their term where a term has been set forth under the articles of association, or upon the realisation of their area of activity or the same becoming impossible.

Dissolution results in the commencement of the liquidation process. During the liquidation phase, all debts of the company shall be paid through the collection of its receivables and the sale of its assets. If there are assets remaining, those assets shall be distributed to the shareholders pro rata to their shareholding and the completion of the liquidation process shall be registered with the relevant trade registry.