In Turkey's dynamic commercial life, the limited liability company (LLC), or Limited Şirket in Turkish, is undoubtedly the most frequently preferred company type by entrepreneurs and investors. The widespread adoption of LLCs stems from their flexible structure, simpler management mechanisms compared to joint-stock companies, and more accessible entry points, especially for small and medium-sized enterprises (SMEs). This model, which combines the corporate seriousness of capital companies with the ability to avoid the complex liability structures of sole proprietorships, is seen as a safe haven for those embarking on commercial activities.

The most crucial legal safeguard that forms the core appeal of a limited liability company is the principle of "limited liability," regulated under Article 602 of the Turkish Commercial Code (Law No. 6102, "TCC"). According to this principle, the company is liable for its debts and obligations only with its own assets. Therefore, the partners' liability is generally limited to paying their committed capital contributions, and their personal assets cannot be resorted to for debts arising from the company's commercial activities. This allows entrepreneurs to manage commercial risks within a more predictable framework and is one of the most fundamental factors encouraging participation in economic life. However, it should not be forgotten that this protective shield is not absolute, and there is a significant exception, especially concerning public debts. This matter will be discussed in detail in the later sections of this article.

1. The DNA of a Limited Liability Company (TCC Art. 573)

Article 573 of the TCC defines a limited liability company as a capital company established under a trade name by one or more real or legal persons, with a determined principal capital composed of the sum of principal capital shares. A limited liability company can be established for any economic purpose and subject not prohibited by law. It acquires its legal existence, i.e., its legal personality, upon registration in the trade registry (TCC Art. 588). With this registration, the company becomes an independent legal entity with its own rights and obligations, separate from its founding partners.

• 1.1. Partnership Structure and Number

One of the most significant innovations brought by the TCC No. 6102 is allowing the establishment of a limited liability company with a single person. This regulation has paved the way for individual entrepreneurs to benefit from advantages such as limited liability offered by capital companies. Partners can be real persons or other companies (legal entities). While the minimum number of partners is one, this number cannot exceed fifty (TCC Art. 574).

• 1.2. Capital Structure

Minimum Capital Requirement: With Presidential Decree No. 7887 published in the Official Gazette on November 25, 2023, the minimum capital amount for limited liability companies has been increased from 10,000 TL to 50,000 TL, effective from January 1, 2024. This increase is not merely a numerical change but aims to encourage the participation of stronger and financially more robust actors in commercial life. Higher capital positively affects the company's initial creditworthiness and market reputation, while also somewhat increasing the financial barrier for entrepreneurship. Therefore, it is critical for entrepreneurs to plan their business considering this new capital requirement.

Principal Capital Shares: The company's capital is divided into principal capital shares, each with a nominal value of at least 25 TL or multiples thereof (TCC Art. 583). The transfer of these shares is subject to more formalities compared to joint-stock companies; it requires a notarized contract and general assembly approval.

Capital Commitment and Payment: In the establishment of a limited liability company, unlike joint-stock companies, there is no obligation to pay a certain percentage of the committed capital in advance. The entire committed capital can be paid within 24 months following the company's registration. This flexibility provides significant financing ease, especially for entrepreneurs in the initial stages.

• 1.3. Partners' Liability

Rule: Single Debt Principle: The fundamental rule in limited liability companies is that the partners' liability is limited to their committed capital contributions. The company is liable for its debts with its own legal personality and assets (TCC Art. 602). This principle protects the partners' personal assets from commercial risks.

Exception: Public Debts: However, this limited liability shield loses its validity against public receivables. Pursuant to Article 35 of Law No. 6183 on the Procedure for the Collection of Public Receivables (AATUHK), partners are personally liable for public debts such as taxes and SSI premiums that cannot be collected, either wholly or partially, from the company, or are determined to be uncollectible, in proportion to their capital shares. This constitutes the most important practical exception to the "limited liability" principle and is a legal detail that entrepreneurs must pay close attention to. This responsibility obliges partners to meticulously follow the company's tax and insurance payments as if they were personal debts, making financial discipline vital within the company.

Other Obligations: Partners' liability is not limited to capital debt and public receivables. Additional payment and ancillary performance obligations can also be imposed on partners through the company's articles of association. Furthermore, pursuant to TCC Art. 613, all partners also have loyalty obligations to the company, such as maintaining confidentiality and not competing.

• 1.4. Activity Area Restrictions

Limited liability companies can operate in any economic field not prohibited by law. However, they cannot operate in fields such as banking, insurance, financial leasing, and factoring, where establishment as a joint-stock company is mandatory under special laws.

2. Strategic Planning Before Establishment

• 2.1. Role of a Financial Advisor and Legal Counsel

Establishing a limited liability company is a legal process that requires strategic decisions rather than a mechanical procedure. Therefore, seeking professional support from a financial advisor and a lawyer from the very beginning of the process is critically important to minimize future risks. The financial advisor guides on matters such as cost analysis, choosing the right company type, tax planning, and MERSİS registration procedures. In contrast, the lawyer plays a vital role in ensuring the solid legal foundation of the articles of association, clearly regulating partner relationships, correctly structuring sensitive issues like non-compete clauses and share transfers, and foreseeing potential legal risks.

• 2.2. Limited Liability Company vs. Joint-Stock Company

Factors such as the entrepreneur's vision, growth targets, potential for attracting investment, and partnership structure are decisive in choosing the company type. To facilitate this decision, a comparison table outlining the main differences between the two capital companies is presented below.

Criterion	Limited Liability Company (LTD)	Joint-Stock Company (A.Ş.)
Minimum Capital	50,000 TL	250,000 TL
Number of Partners	Minimum 1, maximum 50	Minimum 1, no upper limit
Partners' Liability	Not liable for company debts, but personally liable for public debts in proportion to capital shares.	Not liable for company debts.
Share Transfer	Notarized transfer agreement and general assembly approval are mandatory. The procedure is cumbersome.	If share certificates are issued, can be easily transferred by endorsement and delivery. Notary approval is not required.
Public Offering / Bonds	Cannot go public, cannot issue bonds.	Can go public, can issue bonds and other capital market instruments.
Management Body	Manager or Board of Managers. At least one partner must be a manager.	Board of Directors. Members are not required to be partners.
Mandatory Lawyer	Not mandatory.	Mandatory to have a contracted lawyer if capital is 1,250,000 TL or more.

This table shows that a joint-stock company (A.Ş.) structure, offering ease of share transfer, might be more suitable for a technology startup aiming to attract investors and grow rapidly. In contrast, for a more stable and fewer-partner family business or service company, the simplicity of management and lower costs of an LLC (LTD) might be advantageous.

• 2.3. Choosing Trade Name, Business Subject (NACE Code), and Company Headquarters

Trade Name: The chosen name must not be used by another company nationwide in Turkey. The core part of the name must contain an expression indicating the company's field of activity, and it must end with "Limited Şirket" or its abbreviation "Ltd. Şti." Before establishment, a name inquiry should be conducted via the MERSİS portal[](https://mersis.ticaret.gov.tr/) and a suitable name should be reserved.

Business Subject and NACE Code: The company's articles of association must include the subjects the company will engage in, specified and defined in "essential points." The NACE code (Statistical Classification of Economic Activities) determined according to these business subjects will determine the company's hazard class for SSI purposes and affect some legal obligations (e.g., mandatory employment of an occupational safety specialist). The NACE code can be queried from the tax certificate or chamber of commerce records.

Company Headquarters: It is a legal obligation to determine an official address where all legal notifications to the company will be made. This address can be a physical office, or modern solutions such as a virtual office or home office can also be used.

• 2.4. Legal and Tax Analysis of Using a Virtual Office or Home Office

Legality: There is no obstacle, either under the TCC or the Tax Procedure Law, to indicating a virtual office address as the company's legal notification address. This service is completely legal and offers a cost-effective solution, especially for digital entrepreneurs, consultants, and freelancers who do not need a physical office.

Tax Office Inspection: After the company's establishment is registered, tax office officials conduct an inspection visit to the declared address. In virtual offices, this process is professionally managed by office staff, and the inspection is completed even if the entrepreneur is not present.

Home Office and Withholding Tax (Rental Tax): While using a home office may seem like a cost-free solution, it brings up a significant "hidden cost" for tenant entrepreneurs: rental withholding tax (stopaj).

• Being a Tenant: If the entrepreneur is a tenant in the house declared as the business address, they must calculate the gross amount over the net rent paid to the landlord and declare and pay 20% of this gross amount as income tax withholding to the tax office every month. For example, for an entrepreneur paying a net rent of 10,000 TL, the withholding tax is calculated as follows: Gross Rent = 10,000 TL / 0.80 = 12,500 TL. Withholding Amount = 12,500 TL - 10,000 TL = 2,500 TL. This translates to an additional cost of 2,500 TL per month, or 30,000 TL annually, which is often much higher than the annual virtual office rent.
• Being the Property Owner: If the ownership of the house belongs to the entrepreneur, there will be no rental payment, thus no withholding tax obligation arises. This scenario is the most advantageous home office model.
• Property Belonging to a Relative: If the house belongs to a relative of the entrepreneur, even if no rent is paid, the Tax Administration risks imposing withholding tax based on the "comparable rent amount" (emsal kira bedeli). To eliminate this risk, it is best practice to draw up a formal rental agreement, even for a symbolic amount, and pay withholding tax on this amount.

3. Step-by-Step Establishment Procedure

The establishment process proceeds within a certain systematic, also influenced by digitalization.

• 3.1. Stage 1: MERSİS (Central Registry System) Procedures:

The entire establishment process is initiated through the Ministry of Trade's MERSİS portal. Through this system, the company's articles of association are prepared; basic information such as trade name, partner details, capital, address, and NACE code are entered into the system. Once the draft articles are created and approved, the system assigns a unique potential tax identification number to the company.

• 3.2. Stage 2: Preparation of Required Documents and Notary Procedures:

For establishment, identity photocopies, residence documents obtained from e-devlet, and passport-sized photos of the partners are prepared. A signature declaration (imza beyannamesi) is prepared at a notary for the manager(s) authorized to represent and bind the company. If a financial advisor or lawyer will handle the establishment procedures, a special power of attorney must be obtained from a notary on behalf of the founders.

• 3.3. Stage 3: Fulfillment of Financial Obligations:

A Competition Authority fee (Rekabet Kurumu payı) of four per ten thousand (0.04%) of the committed capital must be paid. This payment can be made online via the Fee Tracking System (HTS) through MERSİS or directly deposited into the Competition Authority's account at Halkbank. The payment receipt must be attached to the registration documents.

• 3.4. Stage 4: Trade Chamber Registration and Announcement:

With an appointment obtained through MERSİS, an application is made to the Trade Registry Directorate in the location of the company's headquarters. The application file includes documents such as the chamber registration petition, chamber registration declaration, articles of association obtained from MERSİS, Competition Authority receipt, and managers' signature declarations. Once the registration process is completed, the company officially acquires legal personality, and the establishment decision is published in the Turkish Trade Registry Gazette (TTSG).

• 3.5. Stage 5: Tax Office Registration and Other Post-Registration Procedures:

Following registration, a "business commencement notification" is made to the relevant tax office. Along with this notification, documents such as the signature circular, lease contract (and the receipt for paid stamp duty), registry certificate (sicil tasdiknamesi) are submitted. Upon completion of these procedures, the company's tax certificate (vergi levhası) is created, and its e-notification address becomes active. Additionally, legal books such as the journal, general ledger, inventory book, share register, and general assembly meeting and discussion book, which were certified by the Chamber of Commerce during establishment, are received.

4. Cost Analysis: 2025 Limited Liability Company Establishment Costs

The cost of establishing a limited liability company varies depending on the company's capital, number of partners, length of the articles of association, and the city of establishment. The table below shows the estimated establishment costs for a single-partner, minimum-capital (50,000 TL) limited liability company in Istanbul for 2025, broken down by main expense categories.

5. Post-Registration Life: Ongoing Legal and Financial Obligations

The registration of the company is not the end of the process but the beginning of the main responsibilities.

• 5.1. Tax Responsibilities

After registration, the company regularly undertakes declaration and payment obligations:

• Monthly: Value Added Tax (VAT) Declaration and, if there are employees, Withholding and Premium Service Declaration.
• Quarterly: Corporate Provisional Tax Declaration.
• Annually: Annual Corporate Tax Declaration.
• 5.2. Social Security Responsibilities
• If personnel are employed, employment entry declarations must be made, and SSI premiums must be paid every month.
• Company partners are considered 4/b (BAĞ-KUR) insured under Law No. 6183 and are obliged to pay their premiums regularly.
• 5.3. Commercial Law Responsibilities
• Maintenance of Legal Books: It is mandatory to keep commercial books (journal, ledger, inventory, etc.) in accordance with the TCC and to have them certified by a notary at the end of the operating period.
• Ordinary General Assembly Meeting: Every company is obliged to hold its ordinary general assembly meeting within three months from the end of the operating period (for those with a calendar year accounting period, no later than the end of March) (TCC Art. 617). The agenda of this meeting includes important items such as approving the managers' activity report and financial statements, absolving the managers, and determining the distribution of profit.
• 5.4. Preserving Financial Health: TCC Art. 376 Warning

A regulation often overlooked by many entrepreneurs but vital for the company's legal continuity is Article 376 of the TCC. This article regulates the measures to be taken in cases of capital loss or insolvency in capital companies and is applied mutatis mutandis to limited liability companies. This article transforms financial statements from merely a tax declaration tool into a health report for the continuation of the company's legal existence.

• Loss of Half of the Capital (50%): If it is understood from the last annual balance sheet that half of the total of the capital and legal reserves has been lost due to losses, the managers must immediately call a general assembly meeting and present appropriate remedial measures (capital increase, closing certain units, etc.) to this assembly.
• Loss of Two-Thirds of the Capital (Technical Bankruptcy): If two-thirds of the total of the capital and legal reserves have been lost, the situation becomes even more serious. In this case, if the general assembly called for the meeting does not decide to either replenish the capital, increase the capital, or continue with the remaining one-third capital, the company is considered to be automatically dissolved. This creates an obligation for the managers to notify the court of the company's insolvency. Ignoring these alarms can lead to the personal liability of the managers and cause the entrepreneur to risk not only their company but also their personal assets.

6. Conclusion

The limited liability company stands out in Turkey for entrepreneurs who want to engage in commercial activities, offering advantages such as the principle of limited liability, a flexible management structure, and lower establishment costs compared to joint-stock companies. Especially the permission for single-partner establishment under TCC No. 6102 has made this company type even more attractive. However, alongside these advantages, it also carries important responsibilities and disadvantages, such as partners' personal liability for public debts and share transfer processes being subject to formalities like notary and general assembly approval. While the digitalization of the establishment process through platforms like MERSİS speeds up operations, the entire process, from drafting the articles of association to post-registration obligations, is a complex structure requiring legal and financial attention and expertise.

As detailed throughout this guide, the establishment and administration of a limited liability company involve many critical decisions and legal obligations. Preparing the articles of association to fairly balance the rights and obligations of the partners and prevent future disputes; conducting tax planning in the most appropriate way for the company's field of activity; and regularly monitoring situations that could threaten the company's legal existence, such as those under TCC Art. 376, are only possible with a professional perspective. Therefore, at every stage of the process, consulting with a specialized financial advisor and a lawyer should not be seen as a cost item but as the most important investment to secure the company's future.