Company Liquidation Process in Turkey

November 8, 2023

STAGES AND PROCEDURES FOR CLOSING A COMPANY

 IN TURKEY

  1. The reason for the company’s liquidation must be recorded and reported to the relevant Directorate of Turkish Commercial Registry.
  2. The company must appoint the liquidators to be responsible for the liquidation, and one of them must be a Turkish resident and Turkish citizen in Turkey.
  3. Liquidators may be appointed by the agreement of the company or by the decision of the General Assembly and, if not, liquidation by the board of directors.
  4. Liquidators should be registered and announced in the commercial register.
  5. The people concerned shall be informed by means of a registered communication that the company has been terminated by three declarations issued on a weekly basis.
  6. The people concerned are invited to inform the liquidators of their entitlements, as provided for in the underlying contract, on the company’s website and in the Turkish Commercial Register.
  7. Liquidators prepare the liquidation financial statements for each year and submit the final balance sheet to the General Assembly at the end of the liquidation.
  8. After payment of the company’s debts in liquidation and recovery of share prices, the remaining assets are distributed among the shareholders at the rate of capital paid and franchises,unless otherwise agreed in the Statute.

THE DURATION OF THE COMPANY’S CLOSURE IN TURKEY

The duration of the company’s closure in Turkey is not less than one year, which is because the companies are of a commercial legal character. The time allowed all employees of the company to learn about the liquidation and closure decision, so they could claim their rights if they had rights over the company. The remaining assets may never be distributed until six months after the date of the third invitation to creditors.

THE COSTS OF CLOSING THE COMPANY IN TURKEY

The cost of closing the company in Turkey is related to the type of company, the amount of its debts and the receivables to be paid. In addition, during the closure period, company taxes, the cost of the chartered accountant, etc. Please consult your financial advisor for detailed information about taxes and costs.

POST-CLOSURE OF THE COMPANY IN TURKEY

In liquidation, including in its relations with shareholders, the company retains its legal personality until the end of liquidation and uses the business name in liquidation as a facility. From the date of commencement of the liquidation transaction, upon termination of the liquidation, the liquidation officers apply to the  Commercial Registry Directorate to remove the business name of the company from the registry. The deletion is then recorded and advertised on the system, thus terminating the legal entity of the company. Following that, the company will also be deleted from the tax office’s records and the tax and VAT numbers of the company will no longer be in use. The last phase of the dissolution of a company in Turkey implies the liquidator to hand over all the documents and accounting books to a public notary designated by the commercial court. The notary must keep the documents for 10 years after the liquidation.

OTHER CONSIDERATIONS IN THE LIQUIDATION PROCESS

  1. Termination of the Contracts: As a result of the liquidation of the company, the commercial contracts concluded by the company will also be terminated automatically and there is no need to terminate the contracts separately before liquidation. However, in order not to harm your business reputation and not to leave a bad impression we kindly recommend that you notify the persons and companies with whom you have a commercial relation.
  2. Termination of Employment Contracts of Employees: In the event of the closure of the company due to the liquidation, since there will be a mass layoff of the employees, in accordance with Article 29 of the Labor Law No. 4857 your Company must notify 1) the relevant SSI Regional Directorate and 2) the Turkish Employment Agency at least 30 days in advance why the contracts of the employees have been terminated and the situation must be announced at the workplace within the same period. In addition, the petition must include the names of all employees whose employment contracts have been terminated.

The closure of the company due to liquidation has not been accepted as one of the reasons for the termination with a valid reason of the employment in accordance with the Labor Law and the employees must be paid. In other words, due to the closure of the company, receivables such as severance pay, notice pay, annual leave pay, unpaid wages, etc. may arise in favor of the employee. After the said payments are made in full, a release must be signed with the workers.

For your kind information.

Bilgi ve değerlendirmelerinize sunulur.
Detaylı Bilgi İçin
info@eyuboglubuyukatak.av.tr

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