Choosing the Right Business Structure in Türkiye: JSC vs. LLC

A Guide for Investors

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When considering business ventures in Türkiye, understanding the key differences between Joint Stock Companies (JSCs) and Limited Liability Companies (LLCs) is paramount. This guide will help you make an informed decision based on your specific business needs and objectives.

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Joint Stock Companies (JSCs): A Framework for Growth

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JSCs are ideal for larger enterprises, particularly those seeking to go public or attract significant external investment. Key features of JSCs include:

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• Share Issuance: JSCs can issue shares, offering flexibility in ownership transfer and capital raising.
• Scalability: No restrictions on the number of shareholders, making JSCs suitable for businesses aiming to expand rapidly.
• Formal Governance: JSCs require a board of directors and regular shareholder meetings, ensuring transparency and accountability.
• Minimum Capital: A minimum capital of TRY 250,000 is required for JSC formation.

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Limited Liability Companies (LLCs): A Simpler Approach

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LLCs are well-suited for smaller businesses or family-owned enterprises. They offer a more streamlined structure with fewer compliance requirements. Key characteristics of LLCs include:

• Limited Shareholders: The number of shareholders is capped at 50, providing a more intimate and manageable environment.
• Simplified Management: LLCs have a less formal governance structure, making them easier to manage.
• Lower Capital Requirement: A minimum capital of TRY 50,000 is sufficient for LLC formation.
• No Share Issuance: LLCs cannot issue shares, limiting their ability to raise capital through public offerings.

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Key Considerations for Choosing a Structure

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The decision between a JSC and LLC depends on various factors, including:

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• Business Size: Larger enterprises often opt for JSCs to accommodate growth and attract external investment.
• Ownership Structure: JSCs offer more flexibility in ownership transfer, while LLCs provide a more controlled environment.
• Future Plans: If you anticipate going public or seeking significant venture capital, a JSC might be more suitable.
• Compliance Requirements: JSCs generally have more complex compliance obligations compared to LLCs.

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Conclusion

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Both JSCs and LLCs offer limited liability protection, but their unique characteristics make them suitable for different types of businesses. By carefully considering your specific needs and goals, you can select the most appropriate structure to support your entrepreneurial endeavours in Türkiye.

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