What Are Articles of Association?
The articles of association (ana sözleşme) are the fundamental constitutional document of a Turkish company. They define the company’s identity, structure, governance, and operating rules. The articles bind the company, its shareholders, and its managers.
For a Turkish LLC, articles are governed by TCC Articles 576–644. For a JSC, by TCC Articles 339–563. Both types must be prepared in Turkish, signed before a notary, and filed with the Trade Registry.
Under Turkish law, MERSIS generates a template articles of association that satisfies minimum legal requirements. Many companies use this template with customizations for their specific needs.
Mandatory Clauses for an LLC
Under TCC Article 576, an LLC’s articles of association must contain:
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Trade name and registered address: The full company name (including “Limited Şirketi” suffix) and the city/district of the registered office
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Business purpose (faaliyet konusu): A description of the company’s business activities. This does not need to be exhaustive but should cover all intended activities — subsequent additions require a formal amendment
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Share capital: The total amount (minimum 50,000 TRY) and the nominal value of each share (minimum 25 TRY per share)
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Shareholders and contributions: Names, nationalities, addresses, and capital contributions of each shareholder
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Management and representation: Who manages the company, their authority (individually or jointly), and whether managers are also shareholders
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General assembly provisions: How meetings are called, quorum requirements, and voting rules
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Duration: Whether the company is formed for a definite or indefinite period (most companies are indefinite)
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Profit distribution: Policy and priority of profit allocation
Mandatory Clauses for a JSC
Under TCC Article 339, a JSC’s articles of association must contain:
- Trade name and registered address
- Business purpose
- Share capital and structure: Total capital (minimum 250,000 TRY), number of shares, nominal value per share (minimum 1 TRY), and any different share classes
- Shares: Whether shares are registered (nama yazılı) or bearer (hamiline yazılı), transfer restrictions if any
- Board of directors: Number of members, selection procedures, term of office
- General assembly: Calling procedures, quorum, voting rights
- Fiscal year: Standard is January 1 – December 31
- Profit distribution policy
- Liquidation provisions
Customizable Clauses
Beyond the mandatory minimums, companies can include:
Shareholder Rights
- Pre-emption rights (ön alım hakkı): Existing shareholders’ right to purchase shares before they are offered to third parties
- Drag-along rights: Majority can require minority to sell alongside them
- Tag-along rights: Minority can join a majority’s sale
- Consent requirements: Shareholder approval required for specific transactions
Capital Structure
- Share classes (JSC only): Preferred shares with priority dividends, limited voting, or enhanced voting rights
- Share transfer restrictions: Conditions under which shares can be transferred (particularly important for LLC where all partner transfers must be approved by 75% of capital under TCC)
Management Provisions
- Scope of manager/director authority: Define which actions require partner/board approval beyond the legal minimums
- Representation limits: Require co-signatures for transactions above a specified amount
- Non-compete obligations of managers/directors
Profit Distribution
- Dividend policy: Define minimum distribution percentages or conditions
- Reserve fund requirements: Specify reserve accumulations before distribution
Drafting Process
Standard Template Approach
For most LLC and JSC formations, the MERSIS-generated template is suitable. The template pre-fills based on company details entered in MERSIS and includes all mandatory clauses. The formation agent reviews and customizes the template before notarization.
This approach is appropriate for:
- Standard commercial operations
- Single-shareholder companies
- Foreign-owned companies without complex governance needs
Custom Drafting
For companies with:
- Multiple shareholders with different rights
- Complex profit-sharing arrangements
- Anticipated fundraising or share transactions
- Specific industry-driven governance requirements
Custom drafting by a qualified Turkish commercial lawyer is strongly recommended. Custom articles add legal fees but provide better protection and clarity.
Language Requirements
Articles of association must be in Turkish. If shareholders are foreign nationals, they may request a translation for their understanding, but the Turkish version governs.
Foreign shareholders reviewing the Turkish articles should have them reviewed by an independent Turkish-speaking attorney before signing.
Notarization Requirements
The articles of association must be signed before a Turkish notary public:
- For LLCs: TCC Article 585 requires notarization
- For JSCs: TCC Article 339 requires notarization or registration directly at the Trade Registry in the presence of a registrar
The notary verifies the identity of signatories, witnesses the signatures, and attaches a notarial certificate. The notarized document is then submitted to the Trade Registry.
Foreign shareholders who cannot appear personally may sign through an attorney-in-fact holding a notarized and apostilled power of attorney. The attorney-in-fact signs the articles at the Turkish notary on behalf of the foreign shareholder.
Amendments to the Articles
Amending the articles of association requires:
For LLC
- Resolution by partners representing at least 75% of the share capital (unless a higher threshold is specified in the articles themselves)
- Certain amendments (adding partner obligations, increasing capital contribution requirements) require unanimous consent
- Notarized amended articles filed with the Trade Registry
For JSC
- Extraordinary general assembly with the quorum and majority required by law (typically 75% of capital present, majority vote for many amendments)
- Specific amendments (changing share classes, restricting transfer) require higher majorities
- Trade Registry filing of the amended articles
Cost of amendment: Trade Registry fees (500–2,000 TRY) plus notary fees. Professional services add to the cost.
Common Mistakes in Articles of Association
- Too-narrow business purpose: Listing only current activities and omitting planned future activities; requires amendment when business expands
- Missing transfer restriction clauses: For LLCs with multiple shareholders, well-drafted pre-emption rights prevent unwanted third-party entry
- Vague management authority: Unclear authority clauses lead to ambiguity about who can bind the company
- Generic duration clause: For companies with specific project timelines, a definite term may be appropriate
- No dividend policy: Omitting dividend provisions can lead to disputes between majority and minority shareholders
Frequently Asked Questions
Can the articles of association be in both Turkish and English? The governing version must be in Turkish. A bilingual document with parallel Turkish and English text is permissible, but the Turkish text is the legally binding version. Most companies opt for Turkish only to avoid interpretation conflicts.
Do I need a Turkish lawyer to draft articles of association? For simple, single-shareholder structures, the MERSIS template with a formation agent’s guidance is usually sufficient. For multi-shareholder structures with complex rights, a qualified Turkish commercial lawyer should draft or review the articles.
How much do articles of association cost to notarize? Notary fees for articles of association are regulated and based on the capital amount. For an LLC with 50,000 TRY capital, notary fees are approximately 1,500–3,500 TRY. Fees increase for higher capital amounts.
Can I add provisions restricting the manager’s authority? Yes. The articles can specify that certain transactions (above a threshold value, certain asset acquisitions, hiring above certain salary levels, etc.) require shareholder approval. These internal restrictions bind the company and the manager but may not be enforceable against third parties who transact in good faith without knowledge of the restriction.