Turkey: The Contribution Of Receivables As Capital In Commercial Companies

Last Updated: 26 February 2014
Article by Nilay Celebi


Before we step into the examination of the subject of contributing receivables as capital to corporations, which has been an issue in dispute since the entry into force of Turkish Commercial Code numbered 6102 ("TCC" or "Law"), it is important to briefly mention what may be contributed as capital to companies. Article 127 TCC sets forth the types of assets that may be contributed as capital to commercial companies. In accordance with paragraph 1 of article 127, the following may be contributed as capital to commercial companies:

"Unless otherwise provided by law, a) Cash, receivables, negotiable instruments and shares owned by corporations, b) intellectual property rights, c)movable and any kind of immovable property, d) usufruct rights with respect to movable and immovable property, e) personal effort, f) commercial reputation, g) commercial enterprises, h) transferrable electronic media, domain names and signs which are rightfully used, i) mining licenses and other rights having economic value, j)any other value which is appraisable and transferable."

As understood from the article, the items listed in the provision are not listed using the numerus clausus approach. The legislator provides that values other than the values listed in the above-mentioned article may be contributed as capital by stating that any such item is appraisable and transferrable1.

The capital contributed to a company may be in cash or in kind. Capital in cash must be in Turkish Liras and shall be fulfilled by payment. Capital in kind consists of certain elements. Assets without any encumbrances, attachment and measure on them, which are appraisable and transferable, including intellectual property rights and virtual environments, may be contributed as capital in kind.

Art. 127/1(a) TCC regulates that cash, receivables and negotiable instruments, as well as corporate shares may be contributed as capital to companies. However, the 2nd paragraph of Article 127 refers to Articles 324 and 581 of the TCC. These articles, in detailing the types of assets which may be contributed as capital to joint stock and limited liability companies, regulate that non-monetary assets with encumbrances, attachments and measures, as well as service performances, personal effort, commercial reputations and non-due receivables,which cannot be appraised or transferred, may not be contributed as capital.

Conditions Required for the Addition of Receivables to Capital

Through evaluating the reference to Article 342 in Article 127, and the qualities of being appraisable and transferable stipulated under Article 342 together, it may be concluded that receivables may be contributed as capital in kind to corporations. Moreover, this issue is explicitly regulated in the last sentence of Art. 342/1 and it is ruled that non-due receivables may not be contributed as capital. Accordingly, it may be assessed that there is no obstacle to contributing a due receivable of the shareholder from a third party, with no restricted real right, attachment and measure on it, as capital in kind to a corporation.

Moreover, Article 343 stipulates that enterprises and non-monetary assets to be acquired during incorporation with capital in kind shall be appraised by experts assigned by the commercial court of first instance at the location of the company's headquarters, and it regulates the method of appraisal and the items that the expert report shall cover in detail. The article also provides that the founders and stakeholders are entitled to object to the report prepared by the experts and that the expert report approved by the court is final. In this regard, the expert report must contain, in detail and with justifications, the selected appraisal method, the information with regards to the existence of the receivable and the ability to collect it2. Furthermore, pursuant to the references in Articles 459 and 590, for the capital increase of joint stock and limited liability companies, the rules explained above regarding capital contributions in kind shall be applicable.

Another issue which is discussed in this stage is that the report prepared by experts is expected to confirm the collectability of the receivable along with its existence. Opinions from experts regarding the collectability of a receivable may become cause for concern, since it may lead to the liability of the experts in terms of liability chain3.

In practice, especially certain difficulties are experienced in the court phase with regards to the shareholder's contribution of its receivables from the company to that company as capital in kind and the registration of such transaction; thus the Domestic Trade General Directorate of Ministry of Customs and Trade, ("Ministry") felt the need to develop new regulations in order to overcome those difficulties. In this respect, pursuant to the Ministry opinion in terms of procurement of reliable finalization with respect to the shareholder's contribution of its receivables from the company to the company as capital in kind and the capital increases concluded in this manner;

It is stipulated that if the shareholder contributes his receivable from the company as capital in kind to the establishment of another company or towards the capital increase of another company, in order to determine the existence of the receivable the report prepared by the experts assigned by the commercial court of first instance at the location of the company's headquarters pursuant to article 343 of the Law must be submitted in order to register the transaction.

Besides this, in case the shareholder contributes his receivable from the company as capital in kind to the capital increase of the company in which he is already a shareholder, for determining the existence of receivable, the report prepared by the experts assigned by the commercial court of first instance at the location of the company's headquarters pursuant to article 343 of the Law may be submitted. Additionally, the Ministry delivered an opinion stating that the reports of certified public accountants or independent accountants, financial advisors or auditors for the companies subject to auditing may also be submitted for registration. Consequently, transactions have begun to be applied in line with this opinion.

However, even though a convenience has been brought with respect to capital in kind contributions of the shareholder of its receivable from the company which he is a shareholder of to that same company for its capital increase transaction, the fact that this implementation is not set forth under the law raises the question whether the regulation of the Law may be extended with the Ministry opinion.

Where the receivables are subscribed as capital after all of these stages, pursuant to Article 130 TCC, if they are not collected by the company, the shareholder shall not be relieved of his capital contribution obligation. The receivable, unless otherwise determined, must be collected within one month as of the due date if it is not due and within one month as of the date of the registration of articles of association if it is due and payable. Also according to the same article, if the receivable is not collected within such period, the shareholder is obliged to pay the default interest with respect to the days lapsing as of the expiry of the period, without prejudice to the company's right to indemnity due to delay. In case the receivable is partially collected, the explanations above shall be valid for the outstanding amount. Moreover, the capital in kind may be guaranteed in accordance with Article 128/2 TCC4.


Even though the issue of contributing receivables or adding receivables as capital is one of the technical issues of commercial law, this issue is encountered and discussed greatly in practice. We are of the opinion that the institution of contribution or addition of receivables as capital, which has been commenced to be applied in a more reliable method either with the Ministry opinion or the practices of the Registry of Commerce, will be well grounded in time, with the increase of transactions and the precedents to be formed and the discussions regarding this issue will be unified around certain opinions.


1. GİRAY Eda (Prof. Dr. KARAHAN Sami), Şirketler Hukuku, 1nci Bası, p. 113

2. TEKİNALP Ünal, Sermaye Ortaklıklarının Yeni Hukuku, Değiştirilmiş ve Düzenlemelerle Güncelleştirilmiş 3. Bası, Vedat Kitapçılık 2013, p.157

3. KENDİGELEN Abuzer, Yeni Türk Ticaret Kanunu Değişiklikler, Yenilikler ve İlk Tespitler, XII Levha Yay., 2011, p. 198

4. TCC art. 128/2 The immovable The immovable property having the value determined by the experts in its articles of incorporation or articles of association with the annotation onto the title deed, the intellectual property and other values, if any, with the registration to their exclusive registry in accordance with this article and the movables with the entrustment to a trustee shall be accepted as capital in kind. The registration with the special registries shall remove the good faith.

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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