Transactions (procedures) in respect to restructuring of commercial companies conversion
Conversion of a joint stock company into a limited (liability) company
Pursuant to the 181st article, 1st clause, (a) sub-clause of the Turkish Commercial Code numbered 6102, a joint stock company may be converted into a limited (liability) company. Provisions with regard to the limited (liability) company to be established are implemented in this type of conversions. However, provisions regarding the investment of capital-in kind and minimum number of shareholders are not implemented. Amount of shares of the shareholders and shareholders’ rights are reserved during the conversion. Shareholders are given equal shares or shares entitled to vote for non-voting securities (shares).Equal shares are given or an appropriate amount of compensation is paid in return for the privileged shares. Equal shares (rights) are given or real (net) value is paid on the date of which the conversion plan has been prepared in return for (perpetual bonds) dividend right certificates.
Conversion of the company must be done through the authorized capital.
Conversion of a limited (liability) into a joint stock company:
Pursuant to the 181st article, 1st clause, (a) sub-clause of the Turkish Commercial Code numbered 6102, a limited (liability) company may be converted into a joint stock company. Provisions with regard to the joint stock company to be established are implemented in this type of conversions. However, provisions regarding the investment of capital-in kind and minimum number of shareholders of the equity companies are not implemented. Amount of shares of the shareholders and shareholders’ rights are reserved during the conversion. Shareholders are given equal shares or shares entitled to vote for non-voting securities (shares).Equal shares are given or an appropriate amount of compensation is paid in return for the privileged shares. Equal shares (rights) are given or real (net) value is paid on the date of which the conversion plan has been prepared in return for (perpetual bonds) dividend right certificates.
Conversion of the company must be done through the authorized capital.
Conversion of collective and commandite companies into joint stock and limited (liability) companies:
Pursuant to the 181st article, 1st clause, (b) and (c) sub-clauses of the Turkish Commercial Code numbered 6102, a collective or a commandite company may be converted into a joint stock company or a limited (liability) company. Provisions with regard to the joint stock company and limited (liability) company to be established are implemented in this type of conversions. However, provisions regarding the investment of capital-in kind and minimum number of shareholders are not implemented. Amount of shares of the shareholders and shareholders’ rights are reserved during the conversion.
Conversion of a sole proprietorship/merchant into an equity company
(1-) Pursuant to the 194/1 article of Turkish Commercial Code a commercial enterprise may convert to a commercial company. Thus, a commercial enterprise that has no legal personality may convert to commercial company that has a legal personality.
(2-) Turkish Commercial Code (TCC) regulates that provisions governing the conversion of type by commercial companies (Articles 182 to 193) shall apply by analogy to this transaction.
(3-) Accordingly, the provisions governing the establishment of the company to which the enterprise will convert will be applicable. Therefore, the necessary documentation for the establishment of the relevant company will be prepared and relevant transactions will be executed. The provisions governing the preservation of rights, preparing a balance sheet, a conversion of type plan and report will also apply by analogy. However, as the commercial enterprise has neither a legal personality nor organs, such as a general assembly, no decision for conversion will be adopted, and the relevant provisions will not be applicable.
(4-) Similarly, the principle of continuity of the converted company under the new type will also be applicable (TCC Art. 180). Thus, the commercial company established by conversion will be considered a continuation of the former commercial enterprise,
(5-) The Trade Registry Regulation specifies that in the event a commercial enterprise is converted to a commercial company, an asset valuation report on the former must be prepared by a sworn financial auditor or independent accountant and financial auditor and submitted to the Trade Registry. Furthermore, in the event the assets of the commercial enterprise comprise certain rights or goods registered to the land registry, the registry of ships, the intellectual property registry or to other registries, a statement providing information on such rights and goods as well as on the registries in which they are registered will also be submitted to the trade registry. The goal is that the commercial enterprise and its assets are transferred as a whole to the newly established commercial company and that its unity and continuity are ensured.
(related articles of TCC given as follows; 138,140,142,158,191,193,264,266 with regard to the aforementioned matters.)
Do you want to learn more?
Call us today. +90 212 291 04 45