Turkey: The Transfer Of Commercial Enterprises Pursuant To The Turkish Commercial Code


Turkish Commercial Code No. 61021 ("TCC"), which entered into force on July 1, 2012, brings novelties on the transfer of a commercial enterprise. The Trade Registry Regulation2 ("TRR"), a complementary regulation, which entered into force on January 27, 2013, clarifies some matters not regulated under the TCC. The transfer of a commercial enterprise, formerly regulated within the abrogated Code of Obligations No. 818 ("Former CO"), is now regulated in a more comprehensive and detailed manner within the TCC.

This article shall briefly refer to the provisions under the abrogated Turkish Commercial Code No. 6762 ("Former TCC") and the Former CO. Subsequently, the basic principles of the new amendments and the novelties therein shall be explained.

Provisions of the Former TCC and the Former CO

The former TCC does not include a provision regarding the transfer of a commercial enterprise. Due to this lack under the TCC, art. 179 of the Former CO entitled "Acquisition of an Asset or Enterprise" was applied to the transfer of commercial enterprises. This provision was contained in the provisions regarding the assumption of obligation and in general regulated the buyer's responsibility towards creditors in the event of the transfer of a commercial enterprise with all the assets and liabilities thereof. The notification of the transfer to the creditors and publication thereof was required for the transfer of the liabilities of the commercial enterprise to the transferee under the art. 179 Former CO. The law-maker, in order to protect the creditors, stipulated under art. 179 Former CO that the transferor and the transferee shall be severally liable for the liabilities of the enterprise for two years.

New Provisions

As of July 1, 2012, the transfer of a commercial enterprise is regulated both under the TCC and the Turkish Code of Obligations No. 60983 ("TCO"), which entered into force on July 1, 2012. In addition, the TRR sets forth provisions regarding the elements included in the transfer agreement and the registry of this agreement with the trade registry and other related registries.

The Transfer Agreement

Art. 11/2 Former TCC, by stipulating the elements included in the commercial enterprise "unless otherwise provided in the agreement", was implicitly stating that the commercial enterprise may be subject to several agreements. On the other hand, art. 11/3 TCC explicitly refers to the transfer agreement and other agreements whose subject is the entire enterprise. Art. 11/3 TCC shall not only apply to transfer agreements but also to other agreements whose subject is the entire enterprise. Disposal acts such as pledge or usufructuary, promissory transactions such as loan or lease agreements, and innovative rights such as first option, pre-emption rights are some examples.

Written Form. The Former TCC and Former CO did not provide any requirements as to the form of the transfer agreement. Art. 11/3 TCC emphasizes the written form requirement by stipulating that: "The transfer agreement and other agreements whose subject is the entire enterprise shall be in written form and shall be registered and published with the trade registry". Moreover, art. 133/2 TRR explicitly sets forth the written form requirement. However, the law-maker does not indicate whether the written form is a condition for validity or not. The prevailing view in the doctrine states that this written form is a condition for validity.

In accordance with the Former CO, the assets of the enterprise were not transferred to the transferee merely with the transfer agreement or with a unique act of disposal. Each element included in the assets required a separate transfer transaction. On the other hand, art. 11/3 TCC provides a substantial change to the system explained above. Pursuant to the TCC, "commercial enterprise may be transferred entirely, without the need to conclude each act of disposal required for the transfer of each asset separately". In accordance with this amendment, the alienation of immovable properties from the title deed, transfer of possession of movable properties and registration of trademarks with the trademark registry will no longer be a required. A written transfer agreement shall be sufficient for the entire transfer of the commercial enterprise.

Registration and Publication.As per art. 11/3 TCC, the agreements whose subject is the entire commercial enterprise shall be registered and published with the trade registry.The nature of the registration and publication is regulated under art. 133 TRR entitled "[The] Transfer of Commercial Enterprise". Pursuant to art. 133/3 TRR, "The transfer of a commercial enterprise shall bear effect with the registry of the entire transfer agreement." This provision highlights two important points: all transfer agreements must be registered and registration has an institutive effect. In accordance with the novelty introduced by the TRR, registration will be institutive, publication will be explanatory and the publication will prevent the bona fide acquisition by third persons. The transfer of a commercial enterprise will be easier with these developments. However, the article does not stipulate the person required to carry out the registration. Even though this issue may be regarded as a shortcoming, it may be inferred from art. 22/2 TRR that the owner of the commercial enterprise is entitled to request registration.

Pursuant to Art. 134/4 TRR "Promises to transfer the commercial enterprise, transfers that shall bear effect after a certain time and conditional transfers may not be registered." Thereby, it is regulated that a preliminary agreement shall not constitute a legal basis for the request of registration, and deferred and conditional registrations may not be concluded.

Notification to Other Registries. In accordance with Art. 135/5 TRR "In the transfer of a commercial enterprise, in order to register the assets and rights registered with the land, ship and intellectual property and similar registries on behalf of the transferee without delay, the directorate shall notify the related registries simultaneously with the registration of the transfer of commercial enterprise." Thus, even though under the TRR, it is not obligatory to register with the related registries, the registration of assets that require registration with the related registries is simplified by the TRR. In compliance with the transfer of each asset without the necessity of registration with the related registries, the registration of the transfer with the related registries serves a publicity function. By notifying the land registry for immovable properties, the traffic registry for motor vehicles etc., which is executed simultaneously with the registration made by the trade registry, third persons deemed to have learnt of the transfer of these assets shall be protected more efficiently.

However, it is important to determine how the obligation to notify other registries, as stipulated under Art. 135/5 will be applied in practice. Two problems may arise within this framework.

The first problem is determining which registries to notify. Art. 133/2, b TRR, requires the indication of elements not included in the agreement, it does not require the delineation of elements included in the agreement. Therefore, it is impossible for the trade registrar to understand which registries to notify through examination of the transfer agreement.

The second problem is the issue of how the simultaneous notification will be served. The TRR stipulates that the trade registry records will be kept within the Central Registry Record System ("MERSİS"). Since notification to the other registries will be conducted simultaneously via electronic means, there will be no problem regarding publicity. However, since not all the registries have begun working with MERSİS, pursuant to Provisional art. 1 TRR, the records shall be kept in the books currently used in accordance with the Commercial Registry By-law in the registries which have not commenced working with MERSİS. In this case, where the notification by the Directorate is served in writing, the bona-fide third person may acquire ownership pursuant to art. 1023 of the Civil Code during the time elapsed.

Nature of the Transfer Agreement. The Former TCC did not regulate the transfer of the entire commercial enterprise with a unique transaction. While the Former TCC was in effect, the transfer agreement was qualified as a promissory transaction. However, in accordance with art. 11/3 TCC, since the commercial enterprise will be transferred in its entirety, it is not necessary to conduct the legally required transactions for the transfer of each asset separately; therefore, it may be asserted that the transfer agreement constitutes an act of disposal. On the other hand, since the registration of the transfer agreement is obligatory and, pursuant to art. 133/3 TRR, registration has an institutive function and the transfer agreement shall bear its effect with registration, we cannot qualify the transfer agreement as an act of disposal. The un-registered transfer agreement alone is not enough to validate the transfer, and will not cause any change in the assets of the transferor. Consequently, in my opinion, the transfer agreement must be considered a promissory transaction and the registration as an act of disposal.

Notification Obligation In Compliance With Competition Law

The validity of the transfer agreement is, in certain situations, dependent on the authorization of the Competition Board. Pursuant to art. 7/2 of Law No. 4054 on the Protection of Competition3, businesses exceeding the turnover thresholds foreseen in the Communique published by the Competition Board on the Mergers and Acquisitions which Require the Authorization of the Competition Board (Communique No: 2010/4) are obliged to obtain authorization with respect to the transfer of commercial enterprises in which they are a party4.

Scope of the Transfer Agreement

The Assets Included in the Commercial Enterprise. Art. 11/3 TCC defines the elements that form the subject of the transfer agreement as 'the fixed assets, enterprise value, right of tenancy, trade name and other intellectual property rights and other assets that are permanently attached to the commercial enterprise'. Apart from expressing the meaning of the words in Turkish, the TCC does not bring any novelty regarding the assets of a commercial enterprise.

Art. 133/2 TRR stipulates the elements to be included in the agreement as a) the names, surnames, business names and notification addresses of parties, b) the elements of commercial enterprise excluded from the agreement, c) unconditional statement ensuring that the commercial enterprise has been transferred entirely and it is maintaining its continuity, and d) the purchase price and payment conditions of the commercial enterprise. As is seen, the provision requires the stipulation of elements excluded from the agreement; it does not require the stipulation of elements included in the agreement. Certainly these requirements indicate the minimum content. In practice, agreements are much more detailed.

As a rule, assets permanently attached to the commercial enterprise are transferred to the transferee. However, the transfer of every element is not compulsory. While art. 11/3, c.2 TCC uses the phrase "...unless otherwise agreed..." regarding some elements that may be excluded from the transfer, the TRR goes a step further. Art. 2, c TRR seeks "an unconditional statement ensuring that the commercial enterprise has been transferred entirely and it is maintaining its continuity" and thus sets forth two requirements for the exclusion of an element from the transfer: (1) the integrity of the commercial enterprise shall not be affected and (2) the continuity of the commercial enterprise shall not be damaged as a consequence of this exclusion. Some of the elements may be excluded provided that the enterprise preserves its "operating capacity". If a commercial enterprise is active in multiple areas, it is enough and required that the transferred elements achieve operating capacity in only one area. The excluded elements must be specified clearly in the agreement (Art. 133/2, b TRR)

The TCC provides the indispensable elements for the transfer of a commercial enterprise. For example, according to art. 49 TCC the trade name cannot be transferred separately. Nevertheless, art. 11/3 is an exception to this rule. The preamble of art. 11/3 TCC states that art. 49 does not require the transferor of a commercial enterprise to include the trade name in the transfer.  The preamble argues in a more liberal approach that that owner of an enterprise can use the trade name for an enterprise to be established later if the transfer agreement allows it and there is no non-compete clause. Art. 135/4 TRR sets forth a detailed regulation for registration in cases where the trade name is subject to the transfer or not subject to the transfer; so it supports this argument too.

Pursuant to art. 11/3 TTC, the enterprise value is included in the transfer agreement unless otherwise agreed. The enterprise value is defined in the preamble as a value exceeding the sum of the individual elements of the enterprise including the customer portfolio. Therefore, because the enterprise value is transferred to the transferee, it should be acknowledged that the transferor is obliged not to compete with the transferee, even if the parties have agreed on the non-compete clause.   

The Problem with the Transfer of Liabilities. In accordance with the provision under the Former CO, the assets and liabilities of a commercial enterprise must be transferred together. Art. 202 TCO is a repetition of the abovementioned provision. Therefore, it may be assumed that the explanations given for the Former CO will also be valid for the TCO. The doctrine defends that a commercial enterprise demonstrates integrity and thus assets and liabilities must be transferred together; the law-maker thereby regards the assets as a natural guarantee of the debts of the enterprise and accordingly it brought an arrangement as such in order to protect the creditors. According to the dominant opinion, the entire transfer of assets and liabilities bears a mandatory nature. However, among the authors that defend the mandatory nature, there isn't a consensus on the consequence of the transfer agreement where the agreement has been established merely for the transfer of assets.

Within the scope of the TCC, it may be stated that the discussion on the transfer of assets of a commercial enterprise without including the liabilities, will continue. Although Art. 133/2, b TRR requires the stipulation of the elements of the commercial enterprise excluded from the transfer agreement, these elements must be understood as part of the assets of the enterprise. For instance, some machines, trademarks or immovable property may be excluded from the transfer agreement. Therefore the non-stipulation of any provision regarding the exclusion of liabilities under the TCC and TRR is a significant deficiency.


The TCC introduces important novelties regarding the agreement for the transfer of a commercial enterprise. The provision within the TCO regulates only one side of the transfer of a commercial enterprise, which is the protection of creditors as a result of the transfer, however it does not regulate the transfer of the entire commercial enterprise. In this sense, the regulation set forth by the TCC is favorable.

It is favorable that Art. 11/3 TCC allows for the transfer of the entire commercial enterprise with one unique transaction. Through this provision, the law-maker provides convenience and rapidity with respect to the transfer of a commercial enterprise. The resolution of issues such as the legal nature of the registration, issues to be included in the transfer agreement and registration with other related registries under Articles 133 and 135 TRR and the prevention of confusion and inconvenience with the complementary regulations is important and beneficial. However, it should be noted that the TCC does not solve the problem regarding the limitation of the transfer of liabilities and the TRR does not provide a regulation with respect to this issue either; and there is no consensus in the doctrine on this issue.

Finally, it should be emphasized that regulation of the transfer of a commercial enterprise both under the TCO and TCC is not appropriate. In addition to the compliance problem between the codes, the transfer of a commercial enterprise is a subject that has to be better dealt with the TCC.


1. Official Gazette, 14.02.2011, P. 27846.

2. Official Gazette, 27.01.2013, P. 28541.

3. Official Gazette, 04.02.2011, P. 27836.

4. Official Gazette, 13.12.1994, P. 22140.

5. The Communique on the Mergers and Acquisitions which Require the Authorization of the Competition Board (Communique No: 2010/4), http://www.rekabet.gov.tr/File/?path=ROOT%2fDocuments%2fTebli%c4%9f%2f2012_3.pdf (accessed on 12.07.2013).

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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