Due to the remarkable rate of development in the Turkish markets
over the past 30 years, investors (especially foreign investors)
that wish to share their risks, costs, responsibilities and
liabilities prefer to form joint venture partnerships in relation
to their investments in Turkey. A joint venture may be formed as
a capital company (eg, a joint stock company or limited
company), as regulated under the Commercial Code1;
an ordinary partnership, as regulated under the Code of
The code defines 'joint ventures' as partnerships by
which two or more real persons or legal entities unite their work
power and assets in order to achieve a joint goal.
Joint ventures formed under the code are not deemed legal
entities, and accordingly their registration in the trade registry
is not required. However, in line with the Ministry of Industry and
Trade's Communiqué 2009/23, a joint venture
that has been formed by legal entities in order to carry out
commercial activities may be registered with the trade
Unless otherwise agreed in the joint venture agreement, each
partner's share in its losses and profit are equal. Partners of
a joint venture may appoint one or more of the partners or a third
party to act as the managing partner. In the absence of this
appointment, all partners are entitled to manage the joint
All the joint venture's partners are directly, unlimitedly
and severally liable against its creditors. Unlike the shareholders
of capital companies, where the shareholders' liability is
limited with the amount of capital it undertakes, a joint
venture's partners have unlimited liability with their personal
Termination and liquidation of the joint venture is regulated
under the Code of Obligations. If the joint venture is in a loss
during liquidation process, the loss is shared between the
partners. Under Article 645 of the code, liquidation does not
terminate the liabilities of the partners against third parties.
Partners of the joint venture cannot perform activities competing
with the activities of the joint venture. Furthermore, partners
have a duty of care while performing transactions for the joint
Under the Public Procurement Law4 'joint
ventures' are defined as partnerships or consortia established
by the mutual agreement of more than one natural or legal person in
order to participate in procurement. However, the law requires the
partners of a joint venture to have joint and several liability
while performing their undertakings. The consortium is treated
differently from a regular ordinary partnership, since each party
may be liable only for their contribution undertaken for the
purpose of the joint venture.
According to the Corporate Tax Law5, although joint
ventures do not possess a legal entity, they are subject to the
1 Law 6102, published in the Official Gazette on February
2 Law 6098, published in the Official Gazette on February
3 Published in the Official Gazette on April 1
4 Law 4734, published in the Official Gazette on January
5 Law 5520, published in the Official Gazette on June 21
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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