A buyer who wants a Turkish business can buy the company or buy the business. The share deal takes the legal entity with everything inside it, known and unknown; the asset deal takes the assets, contracts and people the buyer selects and leaves the rest, at the cost of transferring each item and paying tax on the disposal. Turkish law adds a third variant that sits between them: the transfer of a commercial enterprise as a whole under Article 11(3) of the Turkish Commercial Code No. 6102 (TCC) and Article 202 of the Turkish Code of Obligations No. 6098 (TBK), which moves the enterprise in one written, registered contract but makes the seller jointly liable for the enterprise’s debts for two years. This article compares the routes on the questions that decide the structure in practice: what passes and what stays, the formalities and registration, creditor protection and the two-year joint liability, employees, competition filings, and the tax on each side, including the exemptions that make a share deal cheaper for the seller and the VAT that makes an asset deal dearer for the buyer. It complements our articles on partial demerger, which is the tax-neutral way to move a business, and acqui-hires.
What passes with the shares and what passes with the business
In a share deal nothing changes inside the company: contracts, licences, employees, IP registrations, bank accounts, tax history and liabilities all stay where they are, and only the owner changes. The buyer inherits every liability, including the ones nobody knows about, which is why the share purchase agreement carries warranties, indemnities, an escrow or holdback and a due diligence exercise. Public-law liabilities follow the company too: under Article 35 of the Law on the Collection of Public Receivables No. 6183, the shareholders of a limited company are directly liable in proportion to their shares for public debts that cannot be collected from the company, and a transferor and transferee of a limited company share are jointly liable for public debts relating to the period before the transfer, so a limited company share deal does not free the seller from tax exposure. In an asset deal the buyer chooses; every asset is transferred by its own act (assignment of receivables, delivery of movables, registration of immovables and registered IP, assignment of contracts with counterparty consent), and liabilities pass only if assumed. Article 11(3) offers the middle route: a commercial enterprise may be transferred as a whole, without the separate acts of disposal that its individual assets would otherwise require, and unless otherwise agreed the transfer contract is deemed to include the fixed assets, the goodwill, the lease right, the trade name and other intellectual property rights and the assets permanently dedicated to the enterprise; the contract, and any other contract dealing with the enterprise as a whole, must be in writing and is registered and announced in the trade registry. The effect is a single transfer of the enterprise’s assets on registration, but not of its debts, which is where Article 202 of the Code of Obligations enters.
Creditors and the two-year joint liability: TBK 202
Article 202(1) of the Code of Obligations provides that whoever takes over an estate or an enterprise with its assets and liabilities becomes liable to the creditors for the debts of the estate or enterprise from the date it notifies them or announces the takeover, for commercial enterprises in the Trade Registry Gazette and for others in a newspaper distributed throughout Türkiye. Article 202(2) then keeps the transferor on the hook: the former debtor remains jointly and severally liable with the transferee for two years, running from the notice or announcement for debts already due and from the due date for debts falling due later. Article 202(3) equates the effects with an external assumption of debt, and Article 202(4) provides that the two-year period does not begin to run until the transferee has performed the notification or announcement, so a buyer that skips the announcement leaves the seller exposed indefinitely and itself liable from the moment creditors learn of the transfer anyway. Article 203 applies the same rules where two enterprises merge by mutual takeover of assets and liabilities or by one joining the other, and to a sole proprietorship converted into a general or limited partnership. The practical result is that a Turkish asset deal structured as an enterprise transfer gives the buyer the enterprise’s debts by operation of law, which is the opposite of what an asset deal usually promises; buyers who want to leave liabilities behind therefore either exclude debts expressly and structure the acquisition as a purchase of individual assets rather than of the enterprise as a whole, or accept the debts and price them. Where the transferred business has customers and suppliers, the announcement in the Gazette is also the moment from which they may treat the buyer as their counterparty.
Employees
Employees are the one item that moves the same way in both structures, but for different reasons. In a share deal the employer does not change. In an asset or enterprise deal Article 6 of the Labour Law No. 4857 provides that where a workplace or part of it is transferred to another person by a legal transaction, the employment contracts existing at the transfer date pass to the transferee with all rights and obligations; the transferee must calculate seniority-based rights from the date the employee started with the transferor; the transferor and transferee are jointly liable for debts that arose before the transfer and were due at the transfer date, with the transferor’s liability limited to two years from the transfer; and neither party may terminate an employment contract merely because of the transfer, nor does the transfer give the employee a just cause to resign, although terminations for economic, technological or organisational reasons and for just cause remain available. The joint liability does not apply where the legal entity ends by merger, accession or change of form. A buyer that wants only part of the team must therefore either carve the workplace so that the unwanted employees stay with the seller, which the courts examine for substance, or have the seller terminate them before closing with the severance we described in our employment article, at the seller’s cost and risk.
Formalities and registration
A share deal’s formalities depend on the company type. Registered shares of a joint-stock company transfer under Article 490 by endorsement and delivery of the share certificate, or, where no certificate has been issued, by a written assignment followed by entry in the share ledger under Article 499; the share transfer itself is not registered in the trade registry, which is why printing certificates matters for the seller’s tax position. A limited company share transfers under Article 595 by a written contract with notarised signatures, followed by general assembly approval unless the articles dispense with it, and the transfer is registered. Both the notarisation and the agreements are exempt from statutory fees (harç) under Article 123 of the Fees Law No. 492 and from stamp duty under item IV/16 of Table (2) annexed to the Stamp Duty Law No. 488, which exempt documents relating to the incorporation, share transfers and capital increases of joint-stock and limited companies. An enterprise transfer under Article 11(3) needs a written contract registered and announced in the trade registry, and the individual registrations still follow for immovables (land registry), vehicles, trade marks and patents (Turkish Patent and Trademark Office) and domain names, since the registry announcement transfers the enterprise but the public registers must be updated for the assets to be enforceable against third parties. An asset purchase agreement is not exempt from stamp duty, which at the current rate applies to the contract value with the statutory cap, and so asset deals are often documented in stages to manage it.
Competition filings
Both structures can be a concentration under the Competition Law No. 4054 and the Competition Board’s Communiqué No. 2010/4: an acquisition of control over an undertaking through shares, and an acquisition of assets that constitute all or part of an undertaking to which turnover can be attributed, are both notifiable when the turnover thresholds are met, and technology-undertaking acquisitions are notifiable without the Turkish turnover thresholds of the target. Our merger control thresholds article sets out the current figures; the point here is that choosing an asset deal does not avoid the filing.
Tax: the numbers that decide the structure
For the seller a share deal is usually cheaper. An individual who sells joint-stock company shares held for more than two years pays no income tax on the gain, because repeated Article 80(1) (mükerrer madde 80) of the Income Tax Law No. 193 excludes from capital gains the disposal of share certificates of fully liable companies held for more than two years; limited company shares and uncertificated joint-stock shares do not benefit, and their gains are taxed as capital gains under repeated Article 80(4). A corporate seller benefits from Article 5(1)(e) of the Corporate Tax Law No. 5520, which exempts a portion of the gain on participation shares held for at least two full years; the statutory rate of seventy-five per cent was reduced to fifty per cent by Presidential Decision No. 9160 (Official Gazette 27 November 2024, No. 32735) for sales from that date, and the exempt portion must be kept in a special fund account for five years. An asset or enterprise sale by a company is a taxable disposal at full corporate tax on the difference between price and book value, with the immovable-sale exemption abolished by Law No. 7456 in 2023 for immovables acquired after 15 July 2023 and reduced to twenty-five per cent for older ones; the seller of an enterprise also charges VAT on the assets under the Value Added Tax Law No. 3065 unless an exemption applies, and the transfer of goodwill and IP is a service subject to VAT. For the buyer the asset deal has the advantage of a stepped-up tax basis and depreciation on the purchased assets, and of leaving behind the target’s tax history; the share deal offers neither, but avoids VAT and stamp duty. The only route that is neutral on all counts is the demerger under Articles 19 and 20 of the Corporate Tax Law, which moves a production or service enterprise at book value into a new company whose shares can then be sold, subject to the holding periods and the anti-abuse rules we discussed in partial demerger.
The buyer wants the product and the team but not the company’s old contracts. Which route?
An asset deal that lists the assets, assigns the chosen contracts with counterparty consent and transfers the workplace under Article 6 of the Labour Law, drafted as a purchase of individual assets rather than an enterprise transfer so that TBK 202 does not sweep in the debts, or a partial demerger of the product line into a clean subsidiary followed by a share sale if tax neutrality matters more than speed.
We are selling the whole company. Does it matter whether it is an A.Ş. or a limited?
For the individual seller, yes: joint-stock company share certificates held for more than two years are sold tax-free, limited company shares are not. For the buyer, a limited company share deal also carries the transferee’s joint liability for pre-transfer public debts under Article 35 of Law No. 6183.
Can the seller be released from the two-year liability under TBK 202?
Not by agreement with the buyer alone; the liability protects creditors, who are not party to the sale. Individual creditors may release the seller, and the buyer’s indemnity covers the seller economically, but the statutory joint liability runs for two years from the announcement in the Gazette, and does not begin until the announcement is made.
Related: SPA · APA · locked box · earnout · closing.
Sources. Turkish Commercial Code No. 6102 (Articles 11, 490, 499, 595); Turkish Code of Obligations No. 6098 (Articles 202–203); Labour Law No. 4857 (Article 6); Law No. 6183 (Article 35); Income Tax Law No. 193 (repeated Article 80); Corporate Tax Law No. 5520 (Articles 5(1)(e), 19–20, Provisional Article 16); Presidential Decision No. 9160 (Official Gazette 27 November 2024, No. 32735); Fees Law No. 492 (Article 123); Stamp Duty Law No. 488 (Table (2), IV/16). 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.
