Updated on 18 April 2026
In Turkey, limited liability companies and joint-stock companies are the most popular company types. Foreigners interested in investing in Turkey should consider which option best suits them. Although we generally advise choosing a limited liability company because it is easier and cheaper to maintain, the joint-stock company may be required for specific purposes explained below. Please click here for our guide to company formation in Turkey, including the process and costs of incorporating a company as a foreigner.
Entrepreneurs who want to start a business and establish a company in Turkey most frequently ask the following question:
Should I Set Up a Joint-Stock Company (JSC) or a Limited Liability Company (LLC) in Turkey?
Choosing the right type of company in Turkey depends on several key factors, including minimum capital requirements, the number of shareholders, share transfer rules, personal liability for tax debts, and your long-term plans for raising investment, crowdfunding, or going public (IPO).
In this guide, we compare the differences between a limited and a joint-stock company in Turkey in the most practical way and explain which option is more suitable depending on your business goals.
If you want tailored advice tailored to your specific business model, our corporate lawyers can guide you on the best company type for your needs and handle the full formation process in Turkey.
What are the Primary Differences Between a Joint Stock Company and a Limited Liability Company?
The main difference is that a joint-stock company can issue share certificates, invest in other companies, and receive investments more easily. For companies that will invest in other companies and buy shares, the ideal type of company is a joint-stock company.
Differences Between Limited and Joint-Stock Companies in Terms of Share Transfers
When comparing joint-stock companies vs limited liability companies in Turkey, share transfers and pre-emption rights are particularly important—especially for entrepreneurs planning future investment rounds or flexible ownership structures.
Under the Turkish Commercial Code, pre-emption rights are expressly regulated for limited liability companies. In joint-stock companies, however, there is no such regulation. Therefore, doctrinal opinion includes the view that the legislator deliberately chose not to make this right legally binding in terms of company law for joint-stock companies.
ARTICLE 577 – (1)The following clauses shall be binding provisions if they are stipulated in the articles of association:a) Provisions that differ from the statutory rules regarding restrictions on the transfer of capital shares.b) Granting shareholders or the company rights relating to capital shares, such as being the addressee of an offer, pre-emption rights, repurchase rights, and purchase options.
Practical note: If you expect frequent share transfers, investor entry, or “exit” planning, the company type you choose can directly affect how smoothly ownership changes are handled. In such a dynamic shareholders’ structure, we would recommend a joint-stock company.
Practical Difference in Share Transfer between Limited and Joint Stock Companies in Turkey
Share transfers in limited liability companies are subject to more rules than those in joint stock companies. Limited liability company share transfers must be made under a written contract that is notarised. Furthermore, the share transfer must be registered at the Trade Registry. There also needs to be a decision by the general assembly in this regard. On the other hand, joint stock company share transfers do not have such procedural requirements. For more details on this topic, you can read our article on joint-stock company share transfers in Turkey.
Practical note: If you expect frequent share transfers, investor entry, or “exit” planning, the company type you choose can directly affect how smoothly ownership changes are handled. In such a dynamic shareholders’ structure, we would recommend a joint-stock company.
Practical Difference in Share Transfer between Limited and Joint Stock Companies in Turkey
Share transfers in limited liability companies are subject to more rules than those in joint stock companies. Limited liability company share transfers must be made under a written contract that is notarised. Furthermore, the share transfer must be registered at the Trade Registry. There also needs to be a decision by the general assembly in this regard. On the other hand, joint stock company share transfers do not have such procedural requirements. For more details on this topic, you can read our article on joint-stock company share transfers in Turkey.
Differences Between Limited and Joint-Stock Companies Under the Capital Markets Law
Another major difference between a limited and a joint-stock company in Turkey arises under the Capital Markets Law.
A joint-stock company can be offered to the public through an initial public offering (IPO). A limited liability company, however, cannot be offered to the public. In addition, the number of shareholders in a limited liability company may not exceed 50.
Therefore, an LLC cannot obtain the status of being “deemed publicly held,” since only companies with more than 500 shareholders fall within that scope.
According to the Communiqué on Crowdfunding III–35/A.2, if a company participates in a crowdfunding campaign as a limited liability company, it must be converted into a joint-stock company. A joint-stock company, on the other hand, may complete the process by carrying out a capital increase at the end of the crowdfunding campaign.
(Click here to access our article containing detailed information on crowdfunding.)
This makes joint-stock companies a preferred option for entrepreneurs planning crowdfunding, venture capital, angel investment, or an Initial Public Offering.
Personal Liability for Debts of a Limited Liability Company
In both joint-stock companies and limited liability companies, shareholders are generally not personally liable for the company’s debts. However, there is a key exception under Turkish law for limited liability companies: if public receivables (such as tax debts) cannot be collected from the company, they may be collected from the LLC’s shareholders.
“In Article 35 of the Law No. 6183 on the Procedure for the Collection of Public Receivables, amended by Law No. 4369, it is stipulated that shareholders of a limited liability company are directly liable, in proportion to their capital shares, for public receivables that cannot be collected from the company, and they shall be subject to enforcement proceedings under the provisions of this Law.”
As seen, the basic principles regarding collection from shareholders are as follows:
- Shareholders may seek recourse against one another.
- They are liable in proportion to their shares during the relevant period.
- Under statutory regulations, in addition to the shareholders of a limited liability company, legal representatives are also liable for tax debts.
Those responsible for the tax debts of a limited liability company are:
- First and foremost, the company is a legal entity and its assets
- The manager (legal representative who fails to fulfil tax duties)(fault-based liability applies)
- The shareholder of the limited liability company
To collect the debt from shareholders or legal representatives, enforcement proceedings must first be initiated against the legal entity. If, after exhausting enforcement measures, the receivable remains unpaid, secondary enforcement proceedings may be initiated against shareholders and legal representatives.
However, this raises the practical question: Should enforcement be initiated against shareholders or the legal representative first?
According to the decision of the Council of State Assembly for the Unification of Judgments, numbered E. 2013/1, K. 2018/1, dated 11.12.2018, enforcement proceedings may be initiated directly against shareholders without first pursuing the legal representative.
“…the fact that Article 35 of Law No. 6183 sets forth provisions regarding the liability of shareholders is intended to allow pursuing shareholders without pursuing the legal representative first…”
(Click here to access the decision.)
Practical takeaway: If minimising personal risk exposure is a priority, it is a critical factor when deciding between an LLC and a JSC in Turkey.
Minimum Capital Requirement Differences Between Joint-Stock and Limited Liability Companies
Another frequently asked question by foreign investors is: “How much minimum capital is required to set up a company in Turkey?”
According to the Presidential Decree No. 7887 dated 24 November 2023, the minimum capital requirements for joint-stock companies and limited liability companies are as follows:
- Limited liability company:TRY 50,000
- Joint-stock company (principal capital system):TRY 250,000
- Joint-stock company (registered capital system):TRY 500,000
For entrepreneurs seeking scalable growth, investment, or multiple-shareholder structures, a joint-stock company is often chosen despite its higher minimum capital requirements.
Differences in the Procedure for Calling the General Assembly
In both joint-stock and limited liability companies, the general assembly consists of shareholders.
The procedures for calling the general assembly are set out in different articles for each company type. However, in limited liability companies, the provision concerning the call procedure refers to Article 414 of the Turkish Commercial Code, which applies to joint-stock companies.
Accordingly, the call procedure applicable to joint-stock companies is applied by analogy.
Need Help Choosing the Right Company Type in Turkey?
Choosing between a joint-stock company vs limited liability company affects not only compliance but also your future ability to raise funds, transfer shares easily, and manage risk.
If you want to establish a company in Turkey quickly and correctly, our team can assist you with:
- choosing the best company type (limited vs joint-stock company),
- drafting the articles of association,
- completing trade registry filings,
- post-incorporation compliance and corporate governance.
Contact our lawyers to receive a practical assessment tailored to your budget, timeline, and investment goals.