The continued use of the business by one partner after a simple partnership (adi ortaklık) has ended does not mean that all revenues from that period automatically belong only to the partner who uses it. First, the date on which the partnership actually ended, the actual handover of the common assets and the legal basis of the activities are determined. The collection of the former partnership’s receivables, the use of common inventory and the new business activities should be tracked in separate accounts; the same value should not be counted twice in the liquidation.
In practice, one partner may leave the premises while the other keeps working at the same address, with the same equipment and the same customers. The POS device may change, the tax registration may pass to another person or a new company may be established. These changes alone do not prove that all the rights and obligations of the former partnership have ended. In particular, the period between termination and the actual handover of the goods, records and accounts requires a separate review.
Are Termination, Leaving the Business and the End of Liquidation the Same?
A partner not going to the premises, leaving the key behind or having a broken relationship with the other partner does not in every case mean that the partnership has legally ended. The grounds for termination in Article 639 et seq. of the Turkish Code of Obligations (TBK), the continuation provisions of the contract and the parties’ conduct are assessed together. If the partnership continues to exist, the account of the ongoing activities is set up accordingly.
Even if termination has occurred, the partnership relationship continues to the extent necessary for liquidation. Receivables must be collected, debts paid, assets realized and the final balance shared. For this reason, the date of termination and the date on which the last payment is distributed or the last item is delivered may differ.
The scope of the actual handover must also be made concrete. Handing over the key to the premises does not mean that the inventory, bank access, customer receivables, digital records and contracts have all been transferred. If there was a partial handover, it must be shown separately which element was handed over and when. A single sentence such as “the business was transferred” may not be enough to resolve an account dispute that arises later.
Why Are Three Dates Determined Separately for the Review?
The first date is the legal termination. This date matters for determining which assets existed at the start of the liquidation. The second date is the actual departure, or the date on which use became concentrated in a single partner. The third date is the handover of the relevant goods, records and business elements. These dates may fall on the same day, or months may lie between them.
Suppose, for example, that the partners agreed on March 1 that the partnership had ended, that the premises remained in one partner’s use on March 15, and that the inventory count was carried out on April 30. An inventory shortfall seen at the end of April cannot be recorded directly as personal use; March and April sales, returns, spoilage and new purchases are also examined. By contrast, if no opening inventory has been determined at all, the reliability of the later account is weakened.
The dates in this example do not belong to a real file. The aim is to show that a single cutoff date does not resolve all the questions. When the legal termination, the economic activity and the transfer of possession are documented as separate facts, revenues and expenses can be placed in the correct period.
Where Does the Authority of the Partner Who Continues to Use the Business Come From?
Actions Taken to Complete the Liquidation
Article 644 TBK provides that liquidation is, as a rule, carried out jointly by all the partners. If the contract provides that a partner is to carry out certain transactions in their own name and for the account of the partnership, the duty to carry out those transactions and to render accounts continues after termination as well. The collection of an existing receivable or the completion of work already undertaken may be assessed within this framework.
However, this provision does not give unlimited permission for every new order, loan or investment to be made for the account of the former partnership. Whether the transaction is necessary for the liquidation, the consent of the other partners, the authority of representation and the position of the third party are examined separately. The consequence in the external relationship of a transaction regarded as unauthorized in the internal relationship may also differ according to the provisions on representation.
Moving to a New Business Activity
The parties may have agreed that the business will belong to one partner from a certain date. In that case, the transferred assets, the assumed debts, the price, the lease and license relationships and the accounting for the transition period must be expressly regulated. A change in the tax registration alone does not mean that the former partners have waived all of their rights against one another.
If the new activity uses the inventory, equipment or customer contracts of the former partnership, their legal and economic counter-value must be determined. The transfer of ownership of an asset is not the same as merely leaving its use. Transferring assets in the partnership account to personal assets without consideration may give rise to a separate dispute over rendering accounts or compensation.
Under Which Headings Should Revenues Be Separated?
| Type of revenue or collection | Key question to ask | Approach to the account |
|---|---|---|
| Collection of a customer receivable from before termination | Is the receivable already in the opening balance sheet? | The decrease in the receivable and the cash inflow are matched |
| Sale of former inventory | Which inventory did the sold product come from? | Inventory cost, sale and related expense are tracked together |
| New sale with newly purchased inventory | On whose account were the financing and the transaction made? | The relationship of the new activity to the former partnership is determined separately |
| Leasing or sale of equipment | What is the power of disposition, and to whom does the asset belong? | The price and the related movement of goods are shown in the liquidation account |
| Return of security or tax refund | From which former transaction did the refund arise? | Whether it should be taken into the partnership account is assessed according to its source |
This classification is not merely an accounting label. Under each heading, on whose account the transaction was made and what right it relied on are investigated. It cannot be said that all money that entered the same account is partnership revenue, just as partnership collections transferred to a personal account do not remain outside the partnership account merely because of the account holder’s name.
How Are POS and Bank Records Compared?
The POS sales report, the amount transferred to the bank and the accounting record of gross receipts often do not show the same day and the same amount. Commissions, installments, holds, refunds and chargeback (ters ibraz) transactions can create differences. For this reason, a conclusion should not be drawn from a single screen total; the transaction date and the bank value date should be tracked in separate columns.
First, the former and new POS merchant numbers, the linked bank accounts and the periods of use are determined. The payment provider’s records are compared with the daily sales and refund lists. If the same sale appears both in the POS report and in the bank statement, two separate revenues should not be recorded. An old sales amount that reaches the bank account later should likewise not be treated as a new sale.
The description of a transfer received into the account is not by itself conclusive. The customer contract, invoice, delivery and payment information are assessed together. If records are kept in the names of different persons or businesses, it is sorted out which group of transactions belongs to the simple partnership. A request that the necessary bank and payment institution records be obtained through the court should be made by specifying the account and the date range.
How Are Inventory, Fixed Assets and Operating Expenses Taken into Account?
Inventory Consumption and Use of Fixed Assets
The inventory list at the date of termination should be compared with the actual count and the later movements. The use of the goods in a new sale affects the account in which their price will appear. However, keeping the inventory value unchanged in the opening assets and also adding the sales revenue without deducting cost can lead to a duplicated result.
In the use of fixed assets, ownership, economic wear, maintenance and handover conditions are determined. An automatic rent or compensation for unjust occupation (ecrimisil) cannot be derived for every use. It is examined whether the claim rests on the contract, the partnership account, unjust use or another legal ground. For the same economic loss, the double recovery of both a usage fee and the entire earnings of the same period should not be requested.
Necessary Expenses and Expenses of the New Activity
Expenses incurred to protect perishable inventory, pay an old debt or complete an existing job safely are not the same as an investment made to win new customers. The period, purpose, document and benefit of each expenditure must be shown. Not every payment made after termination can automatically be treated as a personal expense; nor can every payment be charged to the former partnership.
The partner who uses the business alone cannot deduct from the results account whatever amount they like for their own labor. Remuneration or a management fee must have a contractual or other legal basis. On the other hand, necessary and useful expenses may be asserted with their documents. Labor should not be confused with a share of earnings, remuneration with an expense, or an advance with capital.
How Is a Simple Period Account Set Up?
In a hypothetical example, suppose that the balance sheet at termination shows 100,000 Turkish lira (TL) of inventory and 60,000 TL of customer receivables. Suppose that in the following period 60,000 TL of the receivable is collected, the part of the opening inventory with a cost of 40,000 TL is sold for 70,000 TL, and 10,000 TL of expenses directly related to the sale are incurred. Assuming there is no other movement, the remaining inventory is 60,000 TL and the net cash from these transactions is 120,000 TL.
In this example, the 60,000 TL collected is not a new gain added to the initial receivable; it is the conversion of the receivable into cash. When the related 10,000 TL expense is deducted from the 30,000 TL difference in the inventory sale, a result of 20,000 TL for the period emerges. Without evaluating tax, other debts, partner advances and the sharing ratio in the contract, it cannot be said that half of this amount should be paid immediately to the other partner.
The value of the example lies in separating the movement of assets from earnings. In a real file, the inventory cost, to whom the sale belongs, the necessity of the expense and the existence of the collection must be proven. If it is disputed on whose account the activity was carried out, the same data can be calculated comparatively under different legal assumptions.
How Can the Other Partner Request Information and an Accounting?
Under Articles 630 and 631 TBK, the rights of management, rendering of accounts and inspection are important. The request should be directed at a specific period and group of transactions. Bank statements, POS reports, inventory counts, invoices for new purchases, collections from former customers and equipment handover records may be requested under separate headings.
If there is a risk that records will be deleted or assets disposed of, appropriate interim legal protection is considered. Preservation of evidence and an interim injunction are not the same thing. Preservation of evidence aims at protecting an existing fact; an injunction, within its statutory conditions, aims at preventing the obtaining of the right from becoming difficult. Stopping the business entirely may not be a proportionate or suitable solution for every dispute.
A request for access to electronic records does not create authority to enter someone else’s account without permission. Securely preserving the records that are accessible and, where necessary, asking the court for production or determination should be preferred. When employee and customer data are reviewed, personal information unrelated to the purpose should be filtered out or access should be restricted.
What Changes When the Business Is Continued Through a New Company?
In its decision of December 4, 2017, E. 2016/4117, K. 2017/6841, the 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi) assessed the later continuation of the business within a limited liability company and the continuation of the payments under the contract. In the concrete case, where the simple partnership was accepted as not having been liquidated, it was held that the rights arising from the contract could be directed against the partner who was a party to the contract. Registration of the other person as a shareholder of the new limited liability company automatically, however, was not accepted.
This decision is not a general rule that, in every partnership that has truly ended, all the earnings of the new company are to be shared among the former partners. The distinguishing aspect of the decision is its acceptance that the partnership relationship continued without having been liquidated. The separate legal personality of the new company, the conditions of any transfer of assets and debts and the parties to the contract must be examined separately in the concrete file.
What Should Be Written in the Handover and Transition Protocol?
The protocol should show the cutoff date, the inventory and fixed-asset lists, the authority to collect former receivables, POS refunds, employee and supplier debts, the ownership of new orders and the form in which documents are delivered. It should be explained whether the transfer price and the liquidation share are the same amount; whether an interim payment is regarded as a final release should be stated clearly.
Where possible, the handover annexes should include the count record, the device list, period-end account statements and the open order list. For electronic records, the file format and date range can be stated; handing over only a user password does not show that all records have been handed over completely. It is important for later review that items on which there is disagreement at handover are not written as though accepted without reservation.
A system of notification and document sharing can be set up for invoices, customer refunds or tax procedures that arrive later. The parties’ internal agreement does not automatically end the rights of third parties. Moreover, a partner’s release from a lease, suretyship or bank obligation is not regarded as having taken place without the required steps being carried out with the third party concerned.
Related articles: Liquidator in a Simple Partnership and Their Powers; Objecting to the Expert Report in a Simple Partnership; Debts and Recourse After Liquidation of a Simple Partnership; Liquidation Agreement in a Simple Partnership: Payment, Security and Release.
Conclusion
In a dispute over use after termination, the correct account depends first on determining the legal status of the relationship and the periods. The collection of the former receivable, the sale of common property and the revenue of the new activity should be separated. A document-based period account prevents double counting and makes visible the limit of the claims that can be asserted on account of the use. A protocol explaining the scope of the actual handover, in turn, considerably facilitates the later settlement of accounts.
Frequently Asked Questions
Does a Partner Leaving the Premises End the Partnership?
Not always. The contract, the ground for termination, notifications and the parties’ conduct are assessed. Actual departure and legal termination can occur on different dates.
Can the Partner Who Collects a Former Customer Debt Take the Money for Themselves?
It is determined which receivable the collection belongs to and on whose account. The collection of a partnership receivable cannot be accepted as the personal earnings of the one who collected it; it must be shown in the liquidation account.
If the Business Operates Under a Different Tax Number, Are the Former Rights Lost?
A change in the tax registration alone does not end the rights of the former partners. The conditions of transfer, liquidation, release and continuation of the activity are examined separately.
Can Both a Revenue Share and a Usage Fee Be Requested for Common Property That Was Used?
The legal basis of the claim and the loss or benefit it covers must be determined. The double recovery of the same economic value under two different names cannot be permitted.
Does One Automatically Become a Shareholder of a Limited Liability Company Founded Later?
No. A simple partnership relationship alone does not create share ownership in a limited liability company. The acquisition of company membership and any transfer procedures are subject to their own conditions.
Sources and legal bases
- Law No. 6098, Turkish Code of Obligations (Türk Borçlar Kanunu), in particular Articles 623, 627–631, 637–645.
- Law No. 6100, Code of Civil Procedure (Hukuk Muhakemeleri Kanunu), provisions on the production of documents, court-appointed experts, interim injunctions and preservation of evidence.
- Court of Cassation, 11th Civil Chamber, December 4, 2017, E. 2016/4117, K. 2017/6841, full text of the decision; an access account may be required in the database.
- Court of Cassation, 3rd Civil Chamber (Yargıtay 3. Hukuk Dairesi), September 26, 2024, E. 2023/4233, K. 2024/2600, decision concerning the review of intermingled business accounts.