Advantages of Establishing a Joint Stock Company in Turkey
In Turkey, around 130,000 companies are established per year. Both in Turkey and internationally, the most popular corporate types are joint stock and limited liability companies. Similarities exist between joint stock businesses and limited liability firms, although joint stock companies enjoy a greater number of benefits.
Is it better to establish Limited Şirket (LLC, Limited Liability Company) or Anonim Şirket (JSC, Joint Stock Company) in Turkey?
First, the responsibility of partners in a joint stock company is restricted compared to that of limited companies. In other words, participants in a joint stock corporation who are not members of the Board are simply liable to pay the committed capital. As long as the partner pays their debt of investing in capital, the partnership cannot be dissolved or ejected from the corporation.
Another benefit of forming a joint stock corporation is that the partners are not liable for the firm’s public debts. As a partner whose capital loan has been paid is not liable for the firm’s other debts, personal assets of joint stock company partners cannot be sought. Partners are assessed irrespective of the company’s losses and potential dangers.
A minimum capital investment of 50,000 Turkish Lira is needed to create a joint-stock corporation. It is not necessary to be in the presence of a notary public while creating a business, nor is it necessary to be present when transferring shares. For this reason, the joint stock firm has the quickest growth rate. It is possible to create joint stock firms with single or several partners. The transfer of shares in multiple-partner joint stock firms does not need registration, notification, or notarization, and partners may transfer shares as they see fit. In one-member joint stock firms, notarization is not needed; just notice to the Trade Registration Office is necessary.
It is simple to create a Joint Stock Corporation, and it also provides administration and transfer benefits. The transfer of shares is the first benefit. If the joint-stock company’s share certificates are bearer, they are transferred exclusively by delivery (transfer of possession); if they are registered, they are transferred by endorsement and delivery. In this regard, factors such as the presence of a public notary or approval by the general assembly, which are sought in limited liability firms, are not sought in corporations. Thus, there is no tax on share transactions.
Tax Advantages of Joint Stock Company
There are tax benefits associated with the transfer of shares of real persons. When selling shares held for more than two years, natural people are exempt from federal income tax. For this reason, you are exempt from paying capital gains tax on the sale of share certificates held for more than two years. Under the premise that certificates or share certificates are present, there is no duty to collect VAT on the sale of share certificates owned by legal entities.
In light of the simplicity of the method, speed, and effect of share transfers in Joint Stock Companies, the formation of a joint stock company has a significant position in terms of legal liability, taxation, and functioning.
Contact us for more information on the content and specifics of the benefits of forming a Joint Stock Corporation.
