The new Turkish Commercial Code has provided new rules regarding
the corporate structure of limited liability and joint stock
companies. Pursuant to the repealed Commercial Code, the
establishment of a company was not possible with one
The single-shareholder company is based on the Twelfth Council
Company Law Directive 89/667/EEC of 21 December 1989 on
single-member private limited-liability companies. Within this
Directive, the single-shareholder company has been implemented in
laws of member states.
How is the single-shareholder company defined?
Single-shareholder company is a recent term in Turkish
Commercial Code, whereas this term has been regulated in other
jurisdictions for a long time. It may be defined as a company which
is incorporated with one shareholder or shareholders number of
which has been decreased to one shareholder later. This term has
been used in the Turkish Commercial Code since 2012. Accordingly, a
joint stock company or a limited liability company may be
established with at least one shareholder. Moreover, the Turkish
Commercial Code sets forth certain obligations and conditions for
Moreover, the New Turkish Commercial Code has been making it
possible for limited liability companies and joint stock companies
that their board of directors consists of one board member.
Why to prefer a single-shareholder company?
The single-shareholder companies are preferred especially by
foreign capital companies, public authorities, universities and
foundations. There are many factors for preference of
single-shareholder companies. Before the entering of the New
Turkish Commercial Code into force, permanence of a company in the
event of decrease of the shareholders' number to one
shareholder was not possible. The possibility of establishment of a
company with one shareholder contributes to the permanence of
companies. Moreover, due to the possibility of incorporation with
one shareholder, foreign capital companies will not have
difficulties by finding another shareholder during incorporation of
a company in Turkey. The most important facility of one-shareholder
limited company is that all company procedures will be accelerated
and since the company will have one board member and one
representative, the company resolutions will be passed and applied
According to the Commercial Code, it is possible for a joint
stock company to pass a resolution to go public. As is known, this
procedure is subject to certain conditions and certain quorum for
decision which may take long time. A one-shareholder company is
able to accelerate these procedures by way of passing such
resolutions by one board member. Also the procedure of transfer of
shares will be more accelerated and easier in single-shareholder
Family company is also common in Turkey, which are managed or
owned by a family. Also such companies may benefit from these
facilities. According to the Law's Preamble, such facilities
may make the establishment of foundations' enterprises with
one-shareholder possible which have not been defined and regulated
in Turkish Law.
Briefly, a single-shareholder company may
be holding company in group of companies,
contribute to the institutionalization of joint stock
accelerate the procedures in share transfers and public
accelerate the resolution mechanism in board of directors and
As mentioned above, a limited liability company or a joint stock
company may be established with one shareholder, it may be
transformed into a single-shareholder company and it may also have
one board member. Due to these facilities and regulations, the
conformity of the Turkish Commercial Code with directives of the
European Union has been provided to a large extent.
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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