Many Turkish companies still carry the share capital they were formed with: a joint-stock company (anonim şirket, A.Ş.) set up in 2019 with TRY 50,000, or a foreign group’s limited company (limited şirket) registered with TRY 10,000 and run ever since on intercompany funding. Those figures were lawful when registered. Since 1 January 2024 they are below the statutory minimum, and Provisional Article 15 of the Turkish Commercial Code No. 6102 (TCC) gives such companies until 31 December 2026 to raise their capital. The consequence of missing the date is not a fine. The company is deemed dissolved by operation of law. This article explains which companies are caught, what dissolution and the registered-capital exit mean in practice, the quorum relief that makes the increase easier to pass, three ways to fund it, and a timetable that works back from the deadline.
Who is caught: the old and new minimums
Article 332(1) TCC sets the minimum capital of a joint-stock company and the minimum initial capital (başlangıç sermayesi) of a non-public joint-stock company under the registered capital system (kayıtlı sermaye sistemi), and allows the President to increase them. Article 580 does the same for limited companies, allowing an increase of up to ten times. Presidential Decision No. 7887 of 24 November 2023 (Official Gazette 25 November 2023, No. 32380) used those powers with effect from 1 January 2024. Provisional Article 15, added by Article 17 of Law No. 7511 (Official Gazette 29 May 2024, No. 32560), then set the deadline for companies already registered below the new figures.
| Company | Minimum before 2024 | Minimum from 1 January 2024 | If not raised by 31 December 2026 |
|---|---|---|---|
| Joint-stock company (fixed capital) | TRY 50,000 | TRY 250,000 | Deemed dissolved |
| Non-public joint-stock company, registered capital system, issued capital of at least TRY 250,000 | Initial capital TRY 100,000 | Initial capital TRY 500,000 | Initial and issued capital must both reach TRY 500,000; otherwise deemed to have left the registered capital system |
| Limited company | TRY 10,000 | TRY 50,000 | Deemed dissolved |
The softer consequence in the second row is given only to registered-capital companies whose issued capital (çıkarılmış sermaye) is already at least TRY 250,000. A registered-capital company below that line is not covered by the second sentence of paragraph (1), and the cautious reading is that the first sentence, and with it dissolution, applies. Companies formed on or after 1 January 2024 were registered at the new minimums and are not affected.
What “deemed dissolved” means
Provisional Article 15(1) says that a company that does not raise its capital in time is deemed dissolved (infisah etmiş sayılır). No general assembly resolution and no court decision is needed; the statute itself is the dissolution event, which fits Article 529(1)(f) for joint-stock companies and Article 636(1)(d) for limited companies (dissolution in the other cases provided by law). Under Article 533, a dissolved company enters liquidation, keeps its legal personality until liquidation ends, trades with “in liquidation” (tasfiye hâlinde) added to its name, and its organs’ powers are limited to the purpose of liquidation. Article 636(5) applies the same consequences to limited companies.
The route back is narrow. Article 548(1) lets the general assembly resolve to continue a company that ended through expiry of its term or by general assembly resolution, provided distribution to shareholders has not begun. Dissolution by statute is not on that list, so a company that misses the date cannot count on a simple shareholder resolution to undo it. For an operating business the deadline should be treated as final.
For registered-capital companies with issued capital of at least TRY 250,000, the sanction is different but still real: the company is deemed to have left the registered capital system. It then loses the mechanism in Article 460 that lets the board increase capital up to the ceiling in the articles, without a general assembly, for up to five years. Every later increase would then need a general assembly.
Board members and managers who, through their fault, breach obligations arising from the law are liable for the loss they cause to the company, its shareholders and its creditors under Article 553(1), which Article 644(1)(a) extends to limited companies.
The quorum relief, and what it does not change
Provisional Article 15(2) makes the increase easier to pass. At a general assembly convened to raise capital to the amounts in Articles 332 and 580, no meeting quorum is required, resolutions are adopted by a majority of the votes present, and privileges may not be used against those resolutions.
| Ordinary rule | Compliance increase under Provisional Article 15(2) | |
|---|---|---|
| Joint-stock company | Articles amendment: at least half of capital represented at the first meeting, one third at a second meeting within one month; majority of votes present (Article 421(1)) | No meeting quorum; majority of votes present |
| Limited company | Capital increase: at least two thirds of the votes represented together with an absolute majority of all voting capital (Article 621(1)(d)) | No meeting quorum; majority of votes present |
| Privileged shares | Can be used as the articles provide | May not be used against the resolution |
This helps companies with an unreachable shareholder, a departed founder, or an investor holding privileged shares (imtiyazlı pay) with a veto in the articles. The relief has limits. It is tied to raising capital to the statutory amounts, so a resolution that combines the compliance increase with a larger raise or other amendments of the articles risks being tested against the ordinary quorums; keep the compliance increase as its own agenda item. It removes quorum, not process: the meeting still has to be validly convened unless all shareholders attend and none objects (Article 416). It does not remove pre-emption rights: every shareholder of a joint-stock company is entitled to new shares in proportion to its holding, with at least fifteen days to exercise the right (Article 461(1) and (3)), and limited company partners have a similar entitlement, with at least fifteen days to exercise it, unless the company agreement or the increase resolution provides otherwise within the limits of Article 591(2) (Article 591(1) and (3)). Finally, consent rights in a shareholders’ agreement are contractual undertakings rather than privileges attached to shares, so the paragraph does not switch them off. Get the investor’s written consent; it is rarely contentious, since the investor’s own position depends on the company surviving.
Three ways to fund the increase
Cash. In a joint-stock company, Article 459(3) applies the formation rules on payment, so at least 25 per cent of the nominal value of cash-subscribed shares is paid before registration and the rest within 24 months (Article 344(1)), into a bank account opened for the purpose (Article 345). One trap comes first: under Article 456(1), capital cannot be increased while cash contributions on existing shares remain unpaid, unless the amount outstanding is immaterial or the increase is from internal resources. A company formed with TRY 50,000 of which only a quarter was paid has to collect the balance before the increase is resolved. Article 462(3) adds a second check: if the balance sheet carries funds that the legislation allows to be added to capital, capital cannot be increased by subscription unless those funds are converted too, although both can be done at the same time and in the same proportion. For limited companies, Article 590 applies the formation rules, and under Article 585(1) the requirement to pay 25 per cent before registration does not apply to them.
Internal resources. Article 462(1) allows a joint-stock company to convert into capital its reserves that are not earmarked for a specific purpose, the freely usable part of its legal reserves, and funds that the legislation allows to be carried on the balance sheet and added to capital. Article 462(2) requires the amount to be shown to exist, by an approved annual balance sheet and a clear written declaration of the board; if the balance sheet is more than six months old, a new one approved by the board is needed. For a startup that raised money at a premium this can be a route that needs no new cash: share premium, net of issue costs, is credited to the general legal reserve under Article 519(2)(a), and Article 519(3) restricts the use of that reserve only while it does not exceed half of capital. How much is available after accumulated losses is a calculation for the company’s accountant. Article 462 is written for joint-stock companies; a limited company should confirm with the trade registry that the reserve it intends to use qualifies before the meeting.
Converting a shareholder receivable. Many foreign-owned subsidiaries are funded by loans from the parent. Capitalising part of that loan is a capital increase by set-off. The board’s declaration must then explain the existence, validity and set-off eligibility of the debt (Article 457(2)(a)), so the loan documentation and the accounting entries need to be in order. The tax and transfer-pricing side of intercompany debt should be reviewed at the same time.
Why “by 31 December” means registered, and a timetable
Provisional Article 15 requires companies to raise their capital by 31 December 2026. A resolution alone is not enough. Under Article 455, an amendment to the articles has no effect against third parties before registration, and under Article 456(3) an increase that is not registered within three months of the resolution lapses. The prudent reading is that the increase must be registered with the trade registry by the deadline. Year-end is busy for registries, banks and notaries; the last days of December leave no margin for a rejected filing.
- Now: pull the current registry record and check the registered capital, the capital system, unpaid contributions and the shareholder list.
- Over the next two weeks: choose the funding route; have the accountant prepare the balance sheet or receivable figures; arrange representation for shareholders who are abroad.
- By early November: board resolution and convocation (at least two weeks’ notice for an A.Ş. under Article 414(1), fifteen days for a limited company under Article 617(2), which the company agreement may shorten to ten), or a meeting with all shareholders present under Article 416. If any shareholder will not subscribe at the meeting, allow for the fifteen-day pre-emption period (Articles 461(3) and 591(3)). If the articles provide for it, shareholders can attend and vote electronically (Article 1527(2) and (5)).
- By early December: pay the required cash into the bank account, sign the board declaration under Article 457 and file for registration.
- After registration: update the share ledger (pay defteri), share certificates, the cap table and the shareholders’ agreement schedules.
Paragraph (3) of Provisional Article 15 lets the Ministry of Trade extend the deadline by one year at a time, at most twice. As at the date of this article no extension has been announced, and planning on one is a gamble with the company’s existence.
Points to check before the meeting
- Do not overshoot by accident. A joint-stock company with share capital of TRY 1,250,000 or more must retain a contracted lawyer under the Attorneyship Law; raising capital well beyond the minimum may bring that obligation with it.
- Consider converting first. A limited company planning to become an A.Ş. before its first round has to meet the TRY 250,000 joint-stock minimum on conversion anyway; doing both together saves one round of filings.
- Look at the loss position. A company that has burned through its capital should read the increase together with its position under Article 376 on capital loss and over-indebtedness.
- Keep the cap table neutral. A pro rata increase in which every shareholder subscribes its share leaves percentages unchanged; an increase from internal resources issues new shares to all shareholders in proportion to their holdings (Article 462(3)).
Our capital is TRY 100,000 and we close a seed round in March 2027. Can the round’s capital increase solve the problem?
No. A round registered in 2027 comes after the deadline. Raise capital to TRY 250,000 now with a compliance increase, and let the round’s increase follow.
Do the shareholders have to put in new money?
Not necessarily. A joint-stock company can increase from internal resources under Article 462 if it has qualifying reserves or funds, which can include share premium from an earlier round within the limits of Article 519. A subsidiary funded by its parent can convert part of the parent’s loan. New cash is the simplest route when neither applies.
Our investor holds privileged shares with a veto over capital increases. Can it block the compliance increase?
Not through the privilege: Provisional Article 15(2) provides that privileges may not be used against a resolution raising capital to the statutory minimum. A consent right in the shareholders’ agreement is a separate, contractual matter. Ask for written consent; an investor has every reason to give it.
Related: converting a limited şirket to an A.Ş. · your first general assembly after the investor · share premium in a Turkish joint-stock company · the contracted-lawyer rule.
Sources. Turkish Commercial Code No. 6102 (Articles 332, 344, 345, 376, 414, 416, 421, 455-457, 459-462, 519, 529, 533, 548, 553, 580, 585, 590, 591, 617, 621, 636, 644, 1527 and Provisional Article 15); Law No. 7511 amending the Turkish Commercial Code and Certain Laws (Official Gazette 29 May 2024, No. 32560), Article 17; Presidential Decision No. 7887 (Official Gazette 25 November 2023, No. 32380, as corrected in Official Gazette 26 November 2023, No. 32381); Attorneyship Law No. 1136 (Article 35). Statute links open the official Turkish texts on mevzuat.gov.tr.
This article is provided for general information only and does not constitute legal advice. Please seek legal support for an assessment of any specific matter.
