Turkish Commercial Code ("TCC") sets out minimum capital requirement for joint-stock companies and limited liability companies.
Currently, under Article 332 of the TCC, minimum capital required for joint-stock companies adopting share capital system is TRY 50,000 (approximately USD 1,735), whereas the minimum capital required for joint-stock companies adopting registered capital system is TRY 100,000 (approximately USD 3,465).
With the Presidential Decision published in the Official Gazzette dated November 25, 2023 ("Decision"), these amounts are set as TRY 250,000 (approximately USD 8,665) and TRY 500,000 (approximately USD 17,325), respectively.
Further, minimum capital required for limited liability companies set out under Article 580 of the TCC (TRY 10,000 (approximately USD 350) is increased to TRY 50,000 (approximately USD 1,735).
The Decision will become effective on January 1, 2024.
Moreover, according to the Article 35/3 of the Attorneyship Act, joint stock companies whose capital is 5 times the minimum capital amount specified in the TCC must work with a lawyer. Therefore, with the entry into force of the Decision this threshold has been raised from TRY 250,000 (approximately USD 8,665) to TRY 1,250,000 (approximately USD 43,315).
How Will Existing Companies Comply with the New Minimum Capital Amounts?
According to announcement of the Ministry of Trade, there is no obligation for existing joint-stock and limited liability companies with capital below the specified amounts to undertake a capital increase. However, the Ministry of Trade suggests that companies may benefit from increasing their capital to meet the new minimums, thereby reinforcing their equity structures.
Conclusion
The Decision reflects updated minimum capital requirements, aligning them with the depreciation of the Turkish Lira.We will keep you informed of any further developments in this matter
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