“Company and Commercial Law” is a branch of law that regulates activities in the business world, covering a range of legal issues from the establishment, management, mergers and acquisitions, bankruptcies, and general commercial transactions of businesses. This branch of law aims to regulate the operations of commercial enterprises and determines the rights, responsibilities, and obligations of businesses and business people.
Some key topics in Company and Commercial Law include:
Types of Companies: Commercial law regulates various types of companies, including joint-stock companies, limited liability companies, cooperatives, sole proprietorships, and more.
Company Formation: Commercial law outlines how a business can be established and the necessary steps involved, such as company registration and drafting articles of association.
Company Management: It regulates the management bodies of companies (e.g., the board of directors) and their responsibilities. It also defines the duties and powers of directors and managers.
Partnerships and Share Transfers: Commercial law governs the transfer of company shares, changes in partnerships, and the relationships between shareholders.
Mergers and Acquisitions: It covers the legal aspects of mergers, acquisitions, and corporate restructuring.
Bankruptcy and Liquidation: Commercial law outlines bankruptcy procedures and the process of liquidating assets when companies face financial difficulties.
Competition Law: It regulates competition among companies and aims to prevent unfair competition, monopolies, and market manipulation.
Commercial Contracts: It governs commercial agreements between businesses and establishes the rights and obligations of the parties involved.
Regulation of Trade: Commercial law includes general regulations related to trade, such as advertising, consumer rights, and product safety.
Intellectual Property and Commercial Law: It also encompasses issues related to intellectual property rights, such as trademarks, patents, and copyright.
Company and Commercial Law is a constantly evolving field, adapting to the changing needs of the business world. Businesses must operate in compliance with commercial law to ensure legal adherence.
Types of Companies in Turkey and Their Characteristics:
Under Turkish commercial law, various types of companies exist, each with its unique characteristics, advantages, and limitations. The Turkish Commercial Code regulates these types of companies.
There are five main types of commercial companies in Turkey:
Joint-Stock Company (A.Ş.): A joint-stock company can be established by at least 5 individuals or legal entities. Capital shares are represented by shares and have a nominal value. Shareholders have limited liability for the company’s debts. Joint-stock companies are often preferred for large-scale investments due to their flexibility and professional management options.
Limited Liability Company (Ltd. Ş.): A limited liability company can be established by at least 1 natural or legal person. Capital shares are called “shares” and have no specific nominal value. Shareholders have limited liability for company debts. Limited liability companies are suitable for smaller businesses and those with fewer complex ownership structures.
Collective Company: A collective company can be established by at least 2 natural persons. Partners have unlimited and joint liability for company debts. Trust and cooperation among partners are crucial in this type of company.
Commandite Company: A commandite company is established by at least 1 commandite partner (with unlimited liability) and 1 commanditer partner (with limited liability). Commanditer partners have limited liability, while commandite partners have unlimited liability.
Cooperative: Cooperatives are formed by individuals or legal entities with economic or social interests. They operate based on the principles of member participation and cooperation.
General Partnership: A general partnership can be established by at least 2 natural or legal persons. Partners have unlimited liability for company debts.
Professional Partnership: Professional partnerships are formed by professionals, such as lawyers, doctors, and engineers, who provide specialized services. Partners operate based on their professional expertise.
When choosing the type of company, factors such as business size, industry, number of partners, and capital should be considered.
Tax Rates for Companies:
Taxation for businesses in Turkey varies depending on the type of business entity and the specific tax regulations. Here are some general tax-related details for companies in Turkey:
Sole Proprietorships (Small and Medium-Sized Enterprises):
Income Tax: In sole proprietorships, the income of the business owner is considered the income of the company, subject to individual income tax rates that vary based on income levels and tax brackets.
Withholding Tax Return: Employers are required to deduct income tax from their employees’ salaries and report and remit these deductions to the relevant authorities.
Joint-Stock Companies and Limited Liability Companies (Corporations);
Corporate Income Tax: Joint-stock companies, limited liability companies, cooperatives, and other corporations are subject to corporate income tax, calculated on annual profits, with a general rate of around 20%. However, there may be exemptions and incentives available.
Advance Corporate Tax: Corporations are also required to pay advance corporate tax on a quarterly basis, which is later offset against the annual corporate income tax liability.
Value Added Tax (VAT): Companies in Turkey charge VAT on the sale of goods and services. The VAT rates vary based on the type of goods or services and generally range from 1% to 20%.
Stamp Duty: Companies are required to pay stamp duty on documents related to commercial transactions or contracts, and the amount depends on the transaction’s value.
Please note that tax laws and rates can change over time, and specific situations may have different rules and regulations. It’s important for businesses to stay informed about the latest tax laws and consult with tax professionals for accurate and up-to-date guidance.
