Liquidation of a Turkish company is the statutory process that follows dissolution: the business is wound down, creditors are called and paid, and any surplus is distributed before the name is struck from the registry. Turkish law separates voluntary liquidation (tasfiye), bankruptcy (iflas) and composition with creditors (konkordato). For the venture finance term “liquidation preference” see liquidation.
Dissolution and entry into liquidation
A joint-stock company dissolves on expiry of its term, on achievement or impossibility of its object, on a ground in the articles, by a general assembly resolution, by a bankruptcy order or by law (TCC Art. 529). A court may also dissolve it for lack of organs (Art. 530) or just cause (Art. 531). The company keeps its legal personality under the name suffix “in liquidation” (tasfiye hâlinde) (Art. 533). A limited company dissolves on the grounds in Art. 636 and follows the same procedure (Arts. 636(5), 643).
Liquidators, creditors and distribution
Unless liquidators are appointed, the board acts as liquidator; at least one liquidator with representation authority must be a Turkish citizen resident in Türkiye (Art. 536). Liquidators call creditors: known ones by registered letter, others by three announcements one week apart in the Trade Registry Gazette and on the company website (Art. 541). They realise assets and pay debts; if debts exceed assets they notify the commercial court, which opens bankruptcy (Art. 542). The remainder goes to shareholders in proportion to paid in capital and privileges, but not before three months have passed from the third call to creditors unless the court permits earlier distribution (Art. 543). Liquidators then request deletion from the registry (Art. 545); a company dissolved by expiry or resolution may revoke liquidation by sixty percent of the capital before distribution begins (Art. 548).
Minimum capital and deemed dissolution
Joint-stock and limited companies whose capital is below the statutory minimums must increase it or are deemed dissolved (TCC Provisional Art. 15). The statutory date of 31 December 2026 was extended by the Ministry of Trade to 31 December 2027 (communiqué of 17 October 2026); see minimum capital compliance.
Bankruptcy and composition under Turkish law
In bankruptcy, liquidation is carried out by the bankruptcy administration under the Enforcement and Bankruptcy Law No. 2004 (TCC Art. 534). On signs of over indebtedness the board prepares an interim balance sheet and, if assets do not cover debts, must request bankruptcy unless creditors subordinate enough claims (TCC Art. 376(3)); creditors may also seek direct bankruptcy, for example on suspension of payments (EBL Art. 177). Composition lets a debtor unable to pay debts as they fall due seek a court supervised plan: a provisional stay of up to three months extendable by two, then a definitive stay of one year extendable by six months, during which enforcement is suspended (EBL Arts. 285, 287, 289, 294).
Tax and personal liability during liquidation
For corporate tax the liquidation period replaces the accounting period, running from registration of the resolution to liquidate to registration of the closing resolution, and the final return is filed within thirty days of closing (Corporate Tax Law No. 5520, Art. 17). Liquidators who distribute without reserving for taxes are personally and jointly liable (Art. 17(7)). Public receivables that cannot be collected from the company are collected from its legal representatives, and entering liquidation does not remove liability for earlier periods (Law No. 6183, repeated Art. 35); limited company shareholders answer in proportion to their shares (Art. 35).
Frequently asked questions
How long does a voluntary liquidation take in Türkiye?
At least three announcements one week apart and three months from the third call before distribution (TCC Arts. 541, 543); disputes or tax audits extend it.
Can a foreign director be the sole liquidator?
No. At least one liquidator with representation authority must be a Turkish citizen resident in Türkiye (TCC Art. 536(4)); a foreign director can act alongside one.
Are founders personally liable for tax debts in liquidation?
Legal representatives are liable for public debts the company cannot pay, including pre liquidation periods (Law No. 6183, repeated Art. 35), and limited company shareholders in proportion to their shares (Art. 35); joint-stock shareholders bear no such liability.
Sources. Turkish Commercial Code No. 6102, Arts. 376, 529-548, 636-644, Provisional Art. 15; Enforcement and Bankruptcy Law No. 2004, Arts. 177, 285-294; Corporate Tax Law No. 5520, Art. 17; Law No. 6183, Art. 35 and repeated Art. 35; Ministry of Trade communiqué on the minimum capital deadline (Official Gazette 17 October 2026, No. 33403).