Turkey: Holding Company Structure Under Turkish Law


The term "holding," which is regarded as the framework that consists of more than one corporation, was legally defined as "companies with the sole purpose of joining with other companies" under Article 466(2) in the repealed Turkish Commercial Code numbered 6762 ("rTCC"). There is no definition for holding companies in the Turkish Commercial Code in force, numbered 6102 ("TCC"). A holding is a joint stock company1 as regards its activities, and is engaged, solely, with joining other companies in terms of its subject matter2.

Special Regulations Regarding Holding Companies

Holding companies are subject to special regulations of the Ministry of Customs and Trade. Under Article 5 of the Communique Regarding the Increase of the Share Capital of the Joint Stock and Limited Companies to the Newly Determined Minimum Values and Determination of Joint Stock Companies, the Incorporation and Amendment of Articles of Association of which are Subject to Permission published in the Official Gazette dated 5 November 2012 and numbered 28468 ("Communique"), holding companies are among those companies, the incorporation and the amendment of the articles of association of which are subject to permission of the Ministry of Customs and Trade ("Ministry").

Under Article 6 of the Communique, prior to the registration process before the trade registry directorate for the establishment of a holding company, permission must be obtained from the Internal Trade General Directorate of the Ministry ("General Directorate"), applying with (i) articles of association, including the signatures of the incorporators approved by the notary public and (ii) assent or permission letter for those companies requiring the assent or permission of the other official institutions for their incorporation.

As per the amendment of the articles of association, under Article 5 of the Communique, permission should be obtained from the General Directorate applying with (i) notarized board of directors resolution regarding the amendment of articles of association, (ii) amended article(s) of the articles of association, and (iii) assent or permission letter for those companies requiring the assent or permission of other official institutions for their amendment of the articles of association.

Also, if the amendment of the articles of association is regarding increase or decrease of the share capital, financial accountant and/or expert reports must also be presented along with the abovementioned required documents.

Ministry permission must be obtained prior to the registration process before the trade registry directorate for the establishment of the holding company and before the date of the general assembly. Incorporation and amendment of articles of association cannot be registered without the Ministry's permission at the trade registry directorate.

There is a special provision regarding the TCC requirements of legal reserve for holding companies.

In principle, under Art. 519(1) of the TCC, five percent of the annual profit of joint stock companies is set aside for the general legal reserve until twenty percent of the share capital is reached. Following the attainment of the limit of twenty percent of the share capital by the general legal reserve, under Art. 519(2)(c), after profit, corresponding to five percent, is paid to the shareholders, ten percent of the amount to be distributed to those persons entitled to shares in profit will be added to the general reserve. In addition, under Art. 519(3), provided that the general legal reserve does not exceed one-half of the share capital or the issued share capital, it can only be used for the recovery of losses, or for precautionary measures for the prevention of unemployment and its consequences.

The abovementioned provisions under Articles 519(2)(c) and 519(3) of the TCC are not applied to holding companies that have the sole purpose of joining other companies. Consequently, legal reserves turn into a voluntary reserve for holding companies not bound by these requirements3.

Exceptions withheld, holding companies are restricted in terms of purpose and subject matter in joining other companies.

As mentioned, above, a holding company is engaged in joining one or more other companies providing the opportunity for management and control. Therefore, a holding company is not a direct establishment, but, instead, is a joint stock company established for the aim of benefiting from the advantages of the presence of more than one corporation under one single organizational framework, and holding the management of the companies within this framework4.

In summary, a holding company is a joint stock company5 in terms of its activities, and is engaged, solely, in joining other companies in terms of its subject matter6. Thus, it cannot be engaged in other activities, such as the sales of products, transfer, or acquisition of licenses.

Liability of Board Members of Holding Companies and Differentiated Joint and Several Liability

It is especially significant with regard to the holding company structure what the liabilities of the board members will be. As a consequence of the nature of the holding companies, and since the board members of holding companies are the board members of companies established only for the purpose of joining other companies, their liability for activities of the subsidiaries is restricted. This restriction of liability is based on the differentiated joint and several liability under Article 557(1) regulating the internal relations of the liable parties. Pursuant to this article, "if there are more than one parties liable for the compensation of the same damages, each of the liable parties will be jointly and severally liable to the extent that liability can be attributed to that party according to fault / negligence and the circumstances of the case." Provided that the actual commercial activity is carried out by the subsidiary, without taking instructions from the holding board of directors, liability of the board members of such holding company is less for the subsidiary activities than for the subsidiary board members.

In light of the concept of "attribution of damages," as regulated under Article 557(1) of the TCC, a reasonable link of causation should be established between the damages and the actions of the damaging party for such damages to be attributed to that party7. Therefore, in order for the liability of the holding board members to be limited in respect of the damages arising out of the actions of the subsidiary, such board members should not have given any instructions to cause any damaging actions.

Potential Liability arising out of the Provisions Regarding Groups of Companies

Dominance of holding companies on the subsidiaries is perpetual, and subsidiaries within the framework of the holding work in accordance with a main policy. However, such circumstances do not prevent the freedom of subsidiaries as required by their field of work. Subsidiaries within the framework of holdings possess separate legal personalities, and the union that we see does not allow for mergers8.

On the other hand, there might be a structure that a holding is also conceived of as a group of companies under the TCC. In order to conclude that such a group of companies exists, and which is a different concept than for a holding company, there must be (i) two subsidiaries and one parent company, as provided for under Art. 105 of the Trade Registry Regulation, published in the Official Gazette dated 27 January 2013, and dated 28541, and (ii) such parent company should have exerted dominance over the subsidiaries by means of majority in share capital, majority in voting or majority in the number of board members. Therefore, group of companies is not a type of a joint stock company9. However, if these two conditions are fulfilled, a holding company as a parent company and two subsidiaries under its dominance would be able to constitute a group of companies.

If a holding company also constitutes a part of a group of companies, special provisions applied to the group of companies would also affect the holding company, which qualifies as the parent company. At this point, it is required to consider the circumstances, wherein especially the parent company might be liable.

Unlawful Use of Dominance and Its Consequences

The practice of dominance of a parent company over the subsidiaries is not illegal on its own. Art. 202 of the TCC regulates two different circumstances of unlawfulness as a consequence of actions of the board of directors, and as a result of significant resolutions of the general assembly. These give rise to liability of the parent company.

The first category under Art. 202/1 of the TCC includes certain operations and actions within the authority of the board of directors, and which may constitute violation of the care obligation of the board of directors and cause loss to the subsidiary.

In accordance therewith, a parent company cannot use its dominance in a way that would cause loss of the subsidiaries. In this instance, the concept of loss includes both the loss and exposing to risk the company's assets and profitability. Some operations and decisions that may result in such damage under Art. 202/1 of the TCC have been listed, inconclusively, and it has been accepted that if the damages of the subsidiary, arising out of such actions, is not recovered in that year, or if those cases where a right of demand, corresponding to the amount of this value is not granted to the subsidiary, such cases would be accepted as unlawful.

The second category under Art. 202/2 of the TCC includes the subsidiary's general assembly resolutions of structural quality and significance. In these cases, unlawfulness is a result of the use of dominance in the significant resolutions such as merger, demerger, change of type, issuance of securities, and important amendments of articles of association, and of the lack of clear, reasonable grounds of such resolution of the subsidiary.

Trust Liability

Under Art. 209, a parent or holding company has a trust liability in those cases where the public reputation of such company has reached a level that generates trust in the public or consumers. In this case, such liability is towards those parties that are engaged in commercial relations with the subsidiaries.


A holding company is a joint stock company where a company joins one or more than one company in a way that would provide the opportunity with management and control, and a company that is solely engaged in joining other companies in terms of its subject matter. Such types of joint stock companies are subject to the permission of the Ministry for their establishment and amendment of articles of association, and are granted some relief with regard to legal reserve requirements. Holding companies, which are different from groups of companies, can also be bound by the liability provisions of the parent company, which has a dominant position, if the conditions for the presence of a group of companies are fulfilled.


[1] Pulaşlı Hasan, Şirketler Hukuku Genel Esaslar, Güncellenmiş 2. Baskı, Ankara 2013, p. 151-152

[2] Pulaşlı Hasan, Şirketler Hukuku Şerhi, Cilt I, Ankara 2011, p. 275-277.

[3] Çakır Rasim Can, 6102 sayılı Türk Ticaret Kanunu'nda holding şirketler, Dünya Gazetesi, 24 Ocak 2014, http://www.dunya.com/gundem/6102-sayili-turk-ticaret-kanununda-holding-sirketler-haberi-235659 .

[4] Üçışık Güzin, Çelik Aydın, Anonim Ortaklıklar Hukuku, I. Cilt, 2013, p.88-91.

[5] Pulaşlı Hasan, Şirketler Hukuku Genel Esaslar, Güncellenmiş 2. Baskı, Ankara 2013, p. 151-152.

[6] Pulaşlı Hasan, Şirketler Hukuku Şerhi, Cilt I, Ankara 2011, p. 275-277.

[7] Tekinalp Ünal, Sermaye Ortaklıklarının Yeni Hukuku, 4. Bası, İstanbul, 2015, p.464.

[8] Üçışık Güzin, Çelik Aydın, Anonim Ortaklıklar Hukuku, I. Cilt, 2013, p.89.

[9] Pulaşlı Hasan, Şirketler Hukuku Şerhi, Cilt I, Ankara, 2011, p. 276.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.