Turkey: Article Relating To Transfer Of Commercial Enterprises

Last Updated: 30 May 2019
Article by Onur Kordel


Various legislation has relevance to the transfer of commercial enterprises (ticari işletme devri). This article discusses essential parts of the legislation including Turkish Commercial Code, Code of Obligations, Competition Law, Labor Law and Enforcement and Bankruptcy Law.


Provisions of Turkish Commercial Code re. Transfer of Commercial Enterprises

The definition of a commercial enterprise was not stated in the previous Turkish Commercial Code numbered 6762 ("Former TCC"), rather it was defined in the Trade Registry By-Laws ("By-Laws").

Under the new Turkish Commercial Code numbered 6102 ("TCC"), this deficiency has been eliminated with Article 11. According to Article 11 of TCC:

"A commercial enterprise is an enterprise, where the transactions are carried out continuously and independently, that aims to generate income which exceeds the limit that any tradesman enterprise is subject to."

According to this definition, there are four interdependent elements of a commercial enterprise:

(i) generating income that exceeds the limit that any merchant enterprise is subject to;

(ii) continuity;

(iii) independency; and

(iv) targeting generation of gross proceeds.

These elements are also the features that distinguish commercial enterprises from other types of enterprises and "ventures" as stated in the Law on the Protection of Competition numbered 4054 ("LPC").

During the period before the TCC, Article 179 of the previous Turkish Code of Obligations ("Former TCO") was primarily applied to commercial enterprise transfers. With TCC entering into force, provisions of TCC and Trade Registry Regulation ("TRR") started to apply to commercial enterprise transfers.

According to Article 11/3 of TCC, for a transfer of commercial enterprise to be valid, a transfer agreement has to be duly executed and signed between the transferor (commercial enterprise owner) and the transferee. Other agreements regarding the commercial enterprise in question as a whole[1] are also accepted within the scope of Article 11/3 of TCC and therefore are subject to the requirements as to form the as per the transfer agreements. Pursuant to Article 11/3 of TCC and Article 133/2 of TRR, all transfer agreements and other agreements within the scope of Article 11/3 have to be in written form. It is debatable whether the written form requirement is a requirement for validity. The majority opinion of academicians is that the requirement as to written form is indeed a requirement for validity.

Furthermore, another requirement to comply with is the registration and announcement of the transfer agreement to the relevant trade registry office pursuant to Article 11/3 of TCC and Article 133 of TRR. Transfer of a commercial enterprise will occur on the condition that all of the transfer agreements are duly registered at the relevant trade registry while the announcement has an informative effect and eliminates the goodwill of third parties. As per Article 133/4 of TRR, registration of a preliminary contractual agreement, forward and contingent agreements is not possible. Notifying other registries is not an obligation under Article 135/5 of TRR; however, to simplify the registration process of the obligatory registry of assets to relevant registries, the director of the trade registry notifies transfer to the relevant registries. The commercial enterprise constitutes the subject of the transfer agreement executed according to Article 11/3 of TCC. The commercial enterprise may be transferred as a whole without it being necessary to make the obligatory acts of disposal separately for the transfer of the assets it possesses.

The transfer of commercial enterprises that form assets of joint-stock companies is de-facto restricted in the registry practice and their approach is different.

Turkish Code of Obligations

Transfer of debts as a whole during the transfer of the commercial enterprise is regulated under Article 202 of Turkish Code of Obligations numbered 6098 ("TCO").

Since debts are transferred without obtaining consent of the creditors as per Article 202 of TCO, the provision sets forth a joint liability mechanism in order to protect the creditors of the enterprise. The joint liability of the transferor and the transferee is a requirement under TCO. Accordingly, it is not possible to revoke or amend the joint liability period; the transferee remains jointly liable with the transferor for a period of two (2) years against the creditors. As per Article 202/4 of TCO, two years liability time period begins only after the notice and/or announcement at the Trade Registry Gazette is made. After the expiry of two (2) years, the transferor's liability for such commercial enterprise expires. That said, the transferee remains liable for each debt until its statute of limitation with all of its properties, meaning that the transferee's liability does not only involve the transferred assets. In this regard, for due debts of the commercial enterprise, the two year period begins as of the notice or the announcement date and with respect to the deferred debts, the two year period begins as of the date when such debts become due. Since the two year period is a period of prescription, it does not stop nor reset. The notice and announcement made by the transferee cannot be considered as an offer to the creditors; therefore, acceptance of the creditors is not a requirement. Fulfillment of the notice and/or announcement obligation is required in order for the transferee to validly undertake debts of the commercial enterprise. If this obligation is not fulfilled, the liability period of the transferee does not commence.

Under Turkish law, there are two (2) approaches that are taken with respect to the interpretation of Article 202 of the TCO. According to the generally accepted interpretation, Article 202 of the TCO is mandatory and taking over a commercial enterprise includes taking over the assets and liabilities of that enterprise and the parties cannot agree to transfer the assets without also transferring the liabilities attached to them. Therefore, if there is a transfer of a commercial enterprise, the transferee is considered to have undertaken all aspects of the commercial enterprise, including the debts. Pursuant to the newly introduced approach however, parties can make a separation and leave the liabilities of the commercial enterprise with the transferor while the transferee only undertakes the assets of the commercial enterprise.

Although this approach has very few supporters in Turkey, the understanding in Switzerland (considering the fact that TCO is largely based on the Swiss Code of Obligations) is in line with this second approach. However, as stated, the first approach is largely supported amongst legal scholars in Turkey[2]

Based on the foregoing, in accordance with Article 202 of the TCO, creditors of the transferor can apply to transferees to collect receivables on condition that:

(i) the commercial enterprise has been duly transferred

(ii) the announcement obligation of the transferee which is specified under Article 202/1 of TCO is fulfilled

(iii) the debt is transferable. A debt may not be transferred if it is accepted as a strictly personal obligation. In order to determine if such debt is strictly personal or not, it should be evaluated whether the debt is linked to the organization of the commercial enterprise in a functional way. Moreover, if the above-mentioned newly introduced approach is accepted, in order for the transferee to be responsible for the debt, this debt should not be excluded from the scope of the transfer.

Turkish Execution and Bankruptcy Law

Pursuant to Article 280 of the Turkish Execution and Bankruptcy Law ("TEBL"), transfer of commercial enterprise is to be notified in writing to the addresses of the creditors by the transferor or to be announced three months in advance to prevent third parties claims. For purposes of clarification, the announcement to creditors under the TEBL is not compulsory, but is advisable as it serves the purpose of avoiding cancellation lawsuits.

The rules specific to cancellation of transactions done with the intention to harm creditors are set forth under Article 280 of TEBL, stipulated under the part that governs cancellation lawsuits (filed by creditors under specific conditions or by certain authorities listed in the article).

Article 280 primarily aims to protect creditors' rights from being harmed by the debtor. Thus, the legislator not only allows cancellation of transactions made with the intention to harm creditors but also makes presumptions on two accounts of the counterparty's knowledge of the debtor's intent to harm by entering into such transactions. The second presumption states that any party who (i) acquires all or a substantial part of the commercial enterprise or the existing commodities in the enterprise or (ii) who occupies the business place after partial transfer will be deemed to have known the debtor's intent to harm the creditors and the debtor will be deemed to have acted with the intention to harm creditors. As per Article 280, the second presumption can be disproved by notification or an announcement made three months prior to the closing of the transaction, by placing notices visibly in the place of business as well as in the Trade Registry Gazette or via appropriate means that would enable all creditors to become aware of the intended transaction. Proclamation through such announcements would also show that the transferee was not acting with an intention to harm any creditors.

In order to file a cancellation lawsuit as per Article 280, an execution process by means of confiscation or bankruptcy is required to be initiated against the debtor within five years following the transfer. In the doctrine, it is accepted that, cancellation lawsuits and collusion lawsuits are two different concepts. Subjects of the cancellation lawsuits, set forth under Article 278-280 of TEBL, are in fact legally valid transactions. Therefore, upon the transaction which is subject to the cancellation lawsuit, properties or rights are transferred to third parties. The claim of a cancellation lawsuit is not the return of the ownership of the properties and rights. Via this type of lawsuit, creditors only have the opportunity to obtain their rights by means of enforcement, as if creditors still have the property or the right.[3]

Competition Law

According to Article 7/1 of LPC, some acquisitions are considered to be illegal and prohibited. These are acquisitions that create a dominant position in relevant goods and service markets or reinforce the dominant position. In addition, as per Article 7/II of LPC, the authorization of the Competition Board is obligatory for acquisitions stated in Article 5 of Communiqué on Mergers and Acquisitions Requiring the Approval of the Competition Board numbered 2010/4 ("Communiqué no. 2010/4") and it is obligatory for enterprises exceeding the threshold stated under Article 7/1 of Communiqué no 2010/4. The relevant commercial enterprise has to apply for the authorization of the Competition Board following execution of the transfer agreement in the event that the legally stated thresholds are exceeded. In the event that the application for authorization is not submitted to the Competition Board within the stipulated time period, the transfer transaction will be deemed invalid until the Competition Board's relevant resolution regarding such transfer and as per Article 10 of Communiqué no 2010/4, administrative fines may also apply.

Labor Law

Employment agreements within the scope of a commercial enterprise transfer will be subject to Turkish Labor Law No. 4827. When the commercial enterprise is transferred to another employer partially or fully as per a legal transaction (business sale, merger etc.), existing employment agreements at the commercial enterprise/workplace or a part thereof (at the date of the transfer) are automatically transferred to the transferee together with all of their rights and obligations. Employees do not have the right to object to such transfer. In case of transfer, the transferor and transferee are jointly liable for debts regarding entitlements of employees working for and at the workplace that have arisen before the transfer and that are due at the date of transfer. However, the transferor's liability for said obligations is limited to two years as of the transfer date. For severance payments, the transferor will continue to be liable following the transfer but its liability will be limited by (i) employee's employment duration with the transferor and (ii) employee's latest salary received from the transferor. Neither the transferee nor transferor can terminate employment agreements solely based on transfer of the commercial enterprise.


  1. Akçaal, Mehmet. İşletmenin Devri. Ankara: Yetkin Yayınları, 2014
  2. Güncan, Atahan. Ticari İşletme Devrinde Alacaklıların Korunması. İstanbul: On İki Levha Yayıncılık, 2018
  3. Pekcanıtez, Hakan / Atalay, Oğuz / Sungurtekin Özkan, Meral / Özekes Muhammet. İcra ve İflas Hukuku. İstanbul: Vedat Kitapçılık, 2017


[1] Such as acts of disposal regarding pledge and usufruct, debtor relationships regarding loan and lease agreements, formative rights i.e. pre-emption.

[2] Arkan, Sabih s. 42 "Ticari İşletme Hukuku" Son Değişikliklere Göre Hazırlanmış ve Genişletilmiş 23. Baskı, Ankara, Banka ve Ticaret Hukuku Araştırma Enstitüsü Yayınları, 2017

Poroy, Reha; Yasaman, Hamdi s. 42 "Ticari İşletme Hukuku" Genişletilmiş ve Güncellenmiş 16. Bası, İstanbul, Vedat Kitapçılık 2017

Bahtiyar, Mehmet s. 29 "Ticari İşletme Hukuku" İstanbul, Beta Yayınları 2003

[3] In this direction, please see the ruling of General Assembly of Civil Chambers of Supreme Court with Decision No. 2000/851 dated May 3, 2000.

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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