Liabilities are a company’s present obligations to transfer economic value — the right side of the balance sheet, split into current liabilities (due within twelve months: trade payables, accrued salaries and taxes, short-term debt, the current slice of deferred revenue) and non-current liabilities (long-term debt, lease obligations, provisions). Together with equity they answer the financing question: of everything the company controls, how much is owed to others and how much belongs to shareholders.
Startup balance sheets have characteristic liability quirks. Deferred revenue — cash collected for services not yet delivered — is a liability, which surprises founders who read prepaid annual SaaS contracts as pure good news. Convertible instruments (notes and, under several accounting frameworks, SAFEs) often sit as liabilities until conversion, dragging accounting equity negative even at healthy companies. And the liabilities that decide deals are frequently the off-balance-sheet ones: tax exposures, undeclared employment costs, litigation risk, data-protection fines — none of which appear in the trial balance.
Where liabilities live in a transaction
Diligence in Turkish deals concentrates on the local classics: SGK (social security) exposure from misclassified contractors or unregistered overtime, withholding and VAT positions, stamp tax on undisclosed contracts, and severance (kıdem tazminatı) accruals that are systematically under-provisioned. The purchase agreement then allocates what diligence found and what it might have missed: representations and warranties on the accuracy of the financials and absence of undisclosed liabilities, indemnities for identified exposures, and price mechanics (locked box or completion accounts) fixing which date’s liabilities belong to the seller. In an asset deal the analysis inverts: the buyer’s lawyers work to leave the liabilities behind, within the limits mandatory law imposes on transfers of going concerns.