Dissolving and Liquidating a Company in Turkey

Overview: Closing a Turkish Company

Dissolving and liquidating a Turkish company is a multi-step process governed by the Turkish Commercial Code. A company is not closed simply by ceasing operations — a formal liquidation process must be completed, debts satisfied, assets distributed to shareholders, and the company deregistered from the Trade Registry.

For an LLC, the dissolution rules are in TCC Articles 636–643. For a JSC, TCC Articles 529–548 apply.

The full process typically takes 6–18 months from the dissolution resolution to final deregistration.

Grounds for Dissolution

A company can be dissolved on several grounds:

Voluntary Dissolution

• Shareholder resolution: Partners/shareholders vote to dissolve the company (majority or unanimous consent depending on articles and company type)
• Expiry of term: If the company was formed for a fixed period
• Completion of purpose: If the company was formed for a specific project that is complete

Involuntary Dissolution

• Court order: At the request of shareholders (for just cause), creditors, or the trade registry
• Bankruptcy: Liquidation ordered by the bankruptcy court
• Regulatory revocation: License revocation for regulated businesses
• Failure to meet legal requirements: E.g., share capital falling below legal minimum without restoration within the required period

This guide focuses on voluntary dissolution by shareholder resolution.

Step 1: Shareholder Dissolution Resolution

The first formal step is a shareholders’ resolution to dissolve the company:

For LLC

• A resolution by partners holding at least 75% of share capital is required (higher threshold may apply if the articles specify it)
• The resolution must state the decision to dissolve and appoint a liquidator

For JSC

• An extraordinary general assembly must be convened
• Dissolution requires approval by shareholders representing 75% of the total share capital in the assembly

The resolution must be notarized and filed with the Trade Registry. The company’s status in the Trade Registry changes to “in liquidation” (tasfiye halinde).

From this point, the company’s trade name must include “Tasfiye Halinde” (In Liquidation) in all official documents.

Step 2: Appointment of Liquidator

The dissolution resolution appoints a liquidator (tasfiye memuru). The liquidator:

• Can be a shareholder, manager, or external professional
• Has exclusive authority to manage the company’s affairs during liquidation
• Must be registered with the Trade Registry as the liquidator

The manager(s) lose their regular management authority when the liquidator is appointed.

Step 3: Publish Creditor Notices (Three-Call Procedure)

The liquidator must publish three creditor notices in the Turkish Trade Registry Gazette (TTSG), inviting all creditors to submit their claims:

• Notices must be published with at least 1-month intervals between them
• After the third notice, creditors have an additional grace period to submit claims

This procedure typically takes a minimum of 3–4 months to complete. Creditors who do not submit claims within the notice period lose the right to claim against the company’s assets (but may still pursue shareholders directly if assets are insufficient).

Step 4: Settle All Debts and Obligations

During and after the creditor notice period, the liquidator must:

• Pay all outstanding debts to creditors (using company assets)
• Settle all tax obligations (corporate tax, VAT, withholding taxes, SGK contributions)
• Terminate all employment contracts (with proper notice, severance, and final pay)
• Cancel all leases, utilities, and service contracts
• Collect all outstanding receivables

Step 5: Tax Clearance

The company must obtain tax clearance (vergi borcu yoktur yazısı) from the Revenue Administration (GİB):

• File all outstanding tax returns (including the final period’s corporate tax return, VAT returns, and withholding tax returns)
• Pay all outstanding taxes, interest, and penalties
• Request a tax clearance letter confirming no outstanding obligations

The tax office may conduct a final audit before issuing clearance. Allow 2–6 months for this process.

Step 6: SGK Clearance

Obtain SGK clearance (SGK borcu yoktur belgesi) from the Social Security Institution:

• Terminate all employee SGK registrations
• File final SGK declarations
• Pay all outstanding SGK contributions and penalties
• Request the SGK clearance certificate

SGK clearance is required for final Trade Registry deregistration.

Step 7: Final Liquidation Balance Sheet

After all debts are settled and clearances obtained, the liquidator prepares a final liquidation balance sheet (tasfiye sonu bilançosu) showing:

• All assets remaining after debt settlement
• Final distribution entitlements for each shareholder

The final balance sheet must be approved by the shareholders.

Step 8: Distribute Remaining Assets

Any assets remaining after all debts are paid are distributed to shareholders in proportion to their share capital:

• Cash is transferred to shareholders’ accounts
• Non-cash assets can be distributed in kind or sold and proceeds distributed
• Tax implications of asset distribution may apply (capital gains considerations)

Step 9: Deregistration from Trade Registry

After the final balance sheet is approved and assets are distributed, the liquidator files for deregistration from the Trade Registry:

Documents required:

• Final liquidation balance sheet (approved by shareholders)
• Shareholders’ resolution approving final balance sheet and distribution
• Tax clearance certificate
• SGK clearance certificate
• Liquidator’s declaration of completion

The Trade Registry deregisters the company and publishes the deletion in the Turkish Trade Registry Gazette. The company legally ceases to exist upon deregistration.

Record-Keeping After Dissolution

Even after deregistration, a dissolved company’s books and records must be preserved. Under Turkish law:

• Commercial records must be retained for 10 years after deregistration
• A designated shareholder or third party is responsible for record custody
• Records may be needed for tax audits that can cover the 5-year limitation period

Simplified Dissolution (Kolaylaştırılmış Tasfiye)

For companies with no assets, no liabilities, no employees, and no pending obligations, Turkish law provides a simplified dissolution procedure that can be completed more quickly. This requires:

• Written declaration by all shareholders and the manager that the company has no debts, assets, or employees
• Notarized declaration filed with the Trade Registry
• Trade Registry confirmation of simplified dissolution

This can reduce the timeline to 1–3 months for completely “clean” companies.

Costs of Liquidation

Frequently Asked Questions

Can I simply abandon a Turkish company and stop operating? No. Ceasing operations without completing the formal dissolution and deregistration process leaves the company legally active with ongoing tax filing obligations. Tax authorities will impose penalties for unfiled returns. All directors and managers may face personal liability for ongoing non-compliance.

How long does voluntary liquidation take in Turkey? For a company with employees, debts, and ongoing contracts, expect 9–18 months. For a newly formed company with minimal activity, the simplified procedure can be completed in 1–3 months.

What happens to tax obligations during the liquidation period? The company remains a taxpayer throughout liquidation. Monthly VAT and payroll tax declarations continue until the company ceases activities. A final corporate tax return must be filed for the liquidation period.

Can shareholders be personally liable for the company’s debts in dissolution? If assets are insufficient to pay creditors, shareholders are generally protected by limited liability. However, shareholders who receive distributions before all creditors are paid face liability to those creditors up to the amount they received. Managers/liquidators who improperly pay out assets before settling debts face personal liability.