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LIMITED COMPANY ESTABLISHMENT
LIMITED COMPANY ESTABLISHMENT: A SAFE AND EFFICIENT START
Turkey offers a highly attractive market for foreign investors due to its strategic location, strong economic structure, and the incentives it provides to entrepreneurs. Therefore, entrepreneurs planning to start a business must make the right choice among company types and create the most efficient structure. The limited company is one of the most commonly preferred company types and is suitable for both small-scale businesses and large investments. With its flexible structure and limited liability advantages, it offers significant opportunities for entrepreneurs.
A limited company has a structure where shareholders are only liable for their share in the company’s capital. This ensures that personal assets are not affected by the business debts, allowing entrepreneurs to operate their businesses more securely. Additionally, its tax advantages and more flexible management structure make this company type attractive. Limited companies provide long-term sustainability for investors, with the clarity of the establishment process and growth opportunities they offer.
However, establishing and managing a limited company requires certain procedures and documents. Capital and legal regulations may be more complex compared to sole proprietorships. With the right management and professional support, limited companies offer high efficiency and growth potential. As Özay Accounting and Consultancy, we provide professional support for limited company establishment. We inform you about important steps such as legal processes, required documents, and tax regulations and guide you through every stage.
DOCUMENTS REQUIRED FOR LIMITED COMPANY ESTABLISHMENT
When establishing a limited company, it is very important to prepare the correct documents. In Turkey, these documents can be listed as follows:
IDENTITY DOCUMENT
A photocopy of the identification of the company partners is required. For Turkish citizens, a national ID card or passport is sufficient, while foreign partners only need a passport photocopy.
RESIDENCY DOCUMENT
Partners residing in Turkey need a residency document. This document is an official document that proves the residential address.
SIGNATURE DECLARATIONS
A document containing the signatures of the company’s board members or authorized representatives. Signature declarations are mandatory for the company’s registration in the trade registry and require notarization.
ACTIVITY DOCUMENT
This document indicates the sector and business field in which the company will operate. The business type must be specified in the trade registry entry.
COMPANY AGREEMENT
The agreement signed between the partners, which determines the company’s operation, lays the foundation for the establishment. This agreement includes the company’s management structure, capital, profit distribution, and other critical matters.
These documents are the essential documents to be prepared before the company’s establishment, and gathering them correctly is very important for the smooth progress of the procedures.
STEPS FOR LIMITED COMPANY ESTABLISHMENT
The establishment of a limited company consists of several basic steps. These steps can be detailed as follows:
PREPARATION OF THE COMPANY AGREEMENT
The company’s establishment agreement is signed by all partners and notarized. This agreement includes the company’s field of activity, capital, management style, and other legal regulations.
TRADE REGISTRY ENTRY
After the notary certification of the company agreement, an application is made to the trade registry office for company registration. This process ensures the company can operate legally, and the company name, address, and field of activity are registered in the trade registry.
TAX REGISTRATION
In order for the company to become a taxpayer, a tax identification number must be obtained from the tax office. Tax registration is mandatory for the company to begin its activities. Additionally, tax declarations such as VAT and other tax types will need to be filed.
OPENING A BANK ACCOUNT
An important step in the company establishment process is opening a bank account in the company’s name. This account will be used for depositing the company’s capital, conducting financial transactions, and carrying out all financial activities. The bank will provide a document showing that the capital amount has been deposited.
EMPLOYEE AND SOCIAL SECURITY REGISTRATION
If the company employs staff, it must register them with SGK (Social Security Institution). Each employee must be reported to SGK, and employment contracts must be drawn up.
ADVANTAGES OF ESTABLISHING A LIMITED COMPANY
There are several advantages to establishing a limited company. These advantages can be detailed as follows:
LIMITED LIABILITY
The liability of limited company owners is limited to their shares in the company. This ensures that personal assets are not affected by the company’s debts. In other words, the company’s debts do not impact the personal assets of the shareholders.
FLEXIBLE MANAGEMENT STRUCTURE
Since management in limited companies is smaller, it provides flexibility. Partners can create a management board or grant management rights to one person. Decision-making processes are faster, and the company’s operations can be more efficient.
TAX ADVANTAGES
Limited companies are subject to corporate tax rather than individual income tax. This tax structure is generally more advantageous because a certain percentage of the company’s income is taxed, and financial obligations are more predictable.
GROWTH POTENTIAL
A limited company allows shareholders to transfer shares, which helps the company attract external investments and grow. Additionally, company partners can attract new investors by increasing the company’s capital.
EASE OF ESTABLISHMENT
Establishing a limited company offers more advantages and opportunities, especially compared to sole proprietorships. Furthermore, the ability to transfer shares easily ensures the continuity of the company.
DISADVANTAGES OF LIMITED COMPANY ESTABLISHMENT
As with every advantage, there are some disadvantages to establishing a limited company:
ESTABLISHMENT COSTS
The establishment costs of limited companies can be higher compared to sole proprietorships. Notarizations, trade registry registration, and other legal procedures can increase establishment costs. Additionally, annual declarations and reporting requirements can incur additional costs.
ANNUAL DECLARATION AND FINANCIAL REPORTING
Limited companies are required to submit annual financial reports and declarations. The financial status of the company must be reported regularly, and the necessary tax declarations must be prepared. This can be time-consuming and costly, especially for small businesses.
MORE COMPLEX STRUCTURE
Limited companies can be more complex in terms of management. Disagreements may arise between partners, and the management structure may need more regulation over time. This situation can make the company’s operations more difficult.
CAPITAL REQUIREMENTS
Limited companies require a minimum capital to be established. This capital must be invested in the company’s initial phase. The amount of capital varies depending on the company’s size and field of activity.
A limited company is an important alternative for entrepreneurs planning to start a business in Turkey. Suitable for both small-scale and growing businesses, this structure offers various advantages and disadvantages and should be considered carefully. As Özay Accounting and Consultancy, we are here to manage your limited company establishment process as quickly and accurately as possible.
Phone: 0 532 261 18 19
Özay Accounting - Istanbul Limited Company Establishment