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Liquidation of Companies and Branches in Turkey
Closing a Turkish company or branch involves much more than simply ceasing business activities or having the director leave the country. As long as the entity remains registered with the Trade Registry, it continues to have legal and tax obligations, including filing returns, maintaining accounting records and potentially accruing penalties.
RT-Union Russian-Turkish Law Firm assists clients from Russia and other CIS countries with the liquidation of Ltd. Şti., A.Ş. and branches of foreign companies in Turkey — from the shareholders’ resolution to final deregistration from the Trade Registry.
RT-Union Russian-Turkish Law Firm assists clients from Russia and other CIS countries with the liquidation of Ltd. Şti., A.Ş. and branches of foreign companies in Turkey — from the shareholders’ resolution to final deregistration from the Trade Registry.
When Is Liquidation Required?
- A project in Turkey has been completed, but the company or branch is still registered.
- The business structure has changed, for example, a branch needs to be replaced with a Ltd. Şti., or vice versa.
- There is a corporate dispute and withdrawing from the company is not possible without terminating the legal entity.
- The company has no active operations, but tax and SGK obligations continue to arise.
- A business sale is being planned and an inactive corporate entity needs to be closed before the transaction.
A Company and a Branch Follow Different Closure Procedures
Once the liquidation decision is registered, the company's name is supplemented with the indication “in liquidation” (tasfiye halinde). A liquidator is appointed, creditors are notified, outstanding liabilities are settled and a final balance sheet is prepared.
Only after these procedures have been completed can the company be removed from the Trade Registry (terkin).
Until deregistration, the company retains its legal capacity, although solely for purposes related to the liquidation process.
Closure is carried out on the basis of a resolution adopted by the competent corporate body of the parent company. The process generally includes deregistration from the Trade Registry, closure of the tax file and SGK accounts, and notifications to the relevant chamber and bank.
There is no separate “company liquidation” procedure for a branch, but all tax, employment and administrative matters related to its activities in Turkey must be fully closed.
A liaison office (irtibat bürosu) follows a different procedure. Its closure involves matters relating to the Ministry of Trade authorization and tax deregistration, as a liaison office is not permitted to conduct commercial activities.
- Ltd. Şti. и A.Ş.
Once the liquidation decision is registered, the company's name is supplemented with the indication “in liquidation” (tasfiye halinde). A liquidator is appointed, creditors are notified, outstanding liabilities are settled and a final balance sheet is prepared.
Only after these procedures have been completed can the company be removed from the Trade Registry (terkin).
Until deregistration, the company retains its legal capacity, although solely for purposes related to the liquidation process.
- Branch of a Foreign Company
Closure is carried out on the basis of a resolution adopted by the competent corporate body of the parent company. The process generally includes deregistration from the Trade Registry, closure of the tax file and SGK accounts, and notifications to the relevant chamber and bank.
There is no separate “company liquidation” procedure for a branch, but all tax, employment and administrative matters related to its activities in Turkey must be fully closed.
A liaison office (irtibat bürosu) follows a different procedure. Its closure involves matters relating to the Ministry of Trade authorization and tax deregistration, as a liaison office is not permitted to conduct commercial activities.
Legal Framework
- Turkish Commercial Code No. 6102: liquidation of an A.Ş. is governed by Articles 529–548; liquidation of a Ltd. Şti. is governed by Articles 636–644, with Article 643 referring to the relevant provisions applicable to joint-stock companies.
- Voting requirements: for an A.Ş., Article 421/3 applies; for a Ltd. Şti., Article 621 applies. As a general rule, at least two-thirds of the represented share capital may be required unless the articles of association establish a higher threshold.
- Notification of creditors: under Article 541, known creditors are notified by registered letter and creditors are invited to submit their claims through three announcements made at one-week intervals in the Turkish Trade Registry Gazette and on the company's website where applicable.
- Distribution of remaining assets: under Article 543, as amended by Law No. 6728, remaining assets are generally not distributed earlier than three months after the third notice to creditors, unless a court permits earlier distribution because there is no risk to creditors.
- Deregistration: Article 545 regulates removal of the company from the Trade Registry. Even after deregistration, additional liquidation proceedings or restoration of the company (ihya) may be required if previously undiscovered assets or creditors are identified.
- Branches: branch closure is governed by the Trade Registry regulations and requires a resolution of the parent company together with closure procedures before the tax authorities and SGK.
How Company Liquidation Works
- Review of debts, litigation, tax liabilities, SGK obligations, employment agreements, leases and bank accounts.
- Adoption of a shareholders’ or general assembly resolution on liquidation and appointment of a liquidator. If a shareholder is located abroad, an apostille and sworn translation of the relevant power of attorney may be required.
- Registration of the liquidation resolution and publication of the relevant announcement. The company's registered name acquires the “in liquidation” status.
- Preparation of the opening inventory and balance sheet and their approval by the shareholders.
- Three creditor announcements and individual notification of known creditors.
- Collection of receivables, disposal of assets and repayment of liabilities. If the company's assets are insufficient to cover its debts, the liquidator must notify the court.
- Completion of the statutory waiting period under Article 543, preparation and approval of the final balance sheet, and release of the liquidator from liability where applicable.
- Closure of tax and SGK files, deregistration from the Trade Registry and proper retention of the company's statutory books and records.
Timeframes and the Cost of Keeping an Inactive Company Open
Claims that an Ltd. Şti. or A.Ş. can be “closed within a week” do not reflect the statutory liquidation procedure.
Three creditor announcements at one-week intervals, followed by the statutory period after the third notice, mean that even a straightforward liquidation requires a minimum period of approximately four months.
This assumes that there are no disputes, tax audits or unresolved VAT matters.
In practice, an uncomplicated liquidation often takes from six months to approximately eighteen months.
A branch with no litigation or employees may usually be closed more quickly. However, the tax authorities will generally not close its tax file until all outstanding declarations have been submitted.
Keeping an inactive entity registered also involves continuing costs and risks, including accounting fees, tax filings, penalties for late or missing reports and the cost of maintaining a registered address.
For a foreign beneficial owner, unresolved obligations may also lead to additional scrutiny of the director or liquidator by the Turkish authorities.
Claims that an Ltd. Şti. or A.Ş. can be “closed within a week” do not reflect the statutory liquidation procedure.
Three creditor announcements at one-week intervals, followed by the statutory period after the third notice, mean that even a straightforward liquidation requires a minimum period of approximately four months.
This assumes that there are no disputes, tax audits or unresolved VAT matters.
In practice, an uncomplicated liquidation often takes from six months to approximately eighteen months.
A branch with no litigation or employees may usually be closed more quickly. However, the tax authorities will generally not close its tax file until all outstanding declarations have been submitted.
Keeping an inactive entity registered also involves continuing costs and risks, including accounting fees, tax filings, penalties for late or missing reports and the cost of maintaining a registered address.
For a foreign beneficial owner, unresolved obligations may also lead to additional scrutiny of the director or liquidator by the Turkish authorities.
How RT-Union Can Assist
- Determine whether liquidation can begin immediately or whether outstanding litigation, employment disputes or tax liabilities need to be resolved first.
- Prepare shareholders’ resolutions, documents relating to the liquidator and the Trade Registry filing package in Turkish.
- Handle creditor publications and correspondence, as well as closure procedures with the tax authorities, SGK and banks.
- Coordinate the closure of a foreign company's branch, including the parent company's corporate resolution, apostille, translation and deregistration procedures.
- If a company has already been deregistered but assets or liabilities remain, prepare proceedings for restoration of the company (ihya) or assist with the legal protection of the liquidator.
What Should Be Avoided?
- Abandoning the company and leaving Turkey without formally closing it. Corporate and tax obligations do not automatically cease.
- Distributing remaining assets to shareholders before expiry of the statutory creditor protection period.
- Filing a liquidation resolution without first checking the required voting threshold and translation requirements.
- Treating the closure of a foreign company's branch as if it were the liquidation of a Turkish Ltd. Şti.
Frequently Asked Questions
Yes, if the company remains registered. The absence of business transactions does not automatically eliminate filing requirements or the responsibilities of the company's management.
The liquidation process may be initiated, but if the company's assets are insufficient to cover its liabilities, the liquidator must notify the court.
Tax liabilities, employee claims and other outstanding debts are not automatically written off as a result of liquidation.
Tax liabilities, employee claims and other outstanding debts are not automatically written off as a result of liquidation.
Deregistration terminates the company's ongoing corporate obligations. However, potential liability relating to periods before liquidation — including tax liabilities, employment matters or personal guarantees — must be assessed separately.
No.
A branch is closed on the basis of a resolution of the parent company and through deregistration with the relevant local authorities.
A Turkish Ltd. Şti., on the other hand, must undergo the full liquidation procedure prescribed by the Turkish Commercial Code.
A branch is closed on the basis of a resolution of the parent company and through deregistration with the relevant local authorities.
A Turkish Ltd. Şti., on the other hand, must undergo the full liquidation procedure prescribed by the Turkish Commercial Code.
Consultation
If your Turkish company or branch is no longer required, the first step should normally be to obtain an up-to-date Trade Registry extract and identify all outstanding obligations rather than simply filing a general “closure application.”
RT-Union assists with company and branch liquidation in Antalya, Istanbul, Ankara, Izmir and Alanya.
Book a consultation:
+7 (812) 210-00-77
+90 (552) 647-07-17
If your Turkish company or branch is no longer required, the first step should normally be to obtain an up-to-date Trade Registry extract and identify all outstanding obligations rather than simply filing a general “closure application.”
RT-Union assists with company and branch liquidation in Antalya, Istanbul, Ankara, Izmir and Alanya.
Book a consultation:
+7 (812) 210-00-77
+90 (552) 647-07-17
