A limited company can be converted into a joint-stock company without being liquidated. However, it is not enough merely to change the “Ltd.” designation in the trade name. The conversion plan, the new articles of association, the financial documents, the shareholders’ right of inspection, the required majority and registration with the trade registry must all be completed together. A resolution in a limited company requires at least three-quarters of both the number of shareholders and the share capital. The thirty days allowed for the shareholders’ inspection differ from the two-month period that applies to some of the available actions. The conversion does not automatically erase past debts or the personal liabilities attached to them.
This article is based on the conversion of a limited company established in Türkiye into a joint-stock company. The differences in the conversion of a joint-stock company into a limited company are noted separately. Mergers, demergers and the incorporation of a sole proprietorship are separate transactions.
Does the same company continue after a change of type?
Under TTK Article 180, the company in its new form is the continuation of the former company. Its legal personality continues; its assets, debts and contractual relationships do not disappear merely because of the change of type. Because there is no transfer of assets between two separate companies, this result should not be explained through the concept of universal succession that applies in a merger.
The practical meaning of this distinction matters: The company’s receivable can be pursued under the joint-stock company’s name; in a pending case, the current name and representation details are notified to the court. A debtor company cannot escape a debt by saying “the limited company signed the contract.” On the other hand, notification obligations in contracts, powers of representation and sector-specific permits must not be neglected. The continuation of the legal entity does not mean that all administrative records are updated automatically.
The Court of Cassation’s approach to the continuation of legal personality
In the decision of the Civil General Assembly of the Court of Cassation (Yargıtay Hukuk Genel Kurulu) dated February 14, 2018, E.2017/15-247, K.2018/229, the company had been converted from a limited company to a joint-stock company before the contracts were made. The fact that the former limited company name was written on the invoice in dispute was not regarded as an obstacle to examining the merits of the receivable. The Assembly explained that a company that changes its type continues as the same legal entity and that universal succession cannot be spoken of. The decision relies on Article 152 of Law No. 6762, which was in force on the date of the events; the principle of continuity is now found in TTK Article 180. This decision cannot be generalized to mean that every invoice or party-designation error will be inconsequential; the identity, representation and transaction documents of the case are evaluated together.
Which conditions are examined before converting from a limited company to a joint-stock company?
TTK Article 181 permits capital companies to be converted into another type of capital company. Under TTK Article 184, the formation provisions of the new type apply; the exceptions regarding the minimum number of shareholders, contributions in kind, and the founders’ signing of the company agreement in capital companies are reserved. These facilitations do not remove the requirements for the articles of association and the capital.
The minimum share capital for a joint-stock company is 250,000 TL. In a joint-stock company that is not publicly held and that adopts the registered capital system, the initial capital must be at least 500,000 TL. These amounts have applied since January 1, 2024 under Presidential Decision No. 7887. For example, a limited company with 50,000 TL of capital cannot convert to a joint-stock company, which requires a minimum capital of 250,000 TL, without changing its capital. If a capital increase is needed, its source, payment status and documents are prepared separately.
Loss of capital or over-indebtedness is likewise not cured by the conversion. The existence of registered capital and whether the company’s equity covers that capital are different matters; the obligations under TTK Article 376 are evaluated separately. If an activity requiring a permit is carried out for the new type, the permit or favorable opinion of the relevant authority is obtained. Converting to a joint-stock company does not grant a public offering permit or the right to engage in all activities.
How are the conversion plan, report and financial documents prepared?
The plan and the report serve different functions
Under TTK Article 185, the manager or managers of the limited company prepare a written conversion plan. The plan states the former and new trade names, the registered office, information about the new type, the joint-stock company’s articles of association, and the number, class and amount of the shares the shareholders will hold after the conversion. The general assembly decides on the basis of this plan.
The conversion report under TTK Article 186, by contrast, explains the reasons for the conversion. The purpose and consequences, compliance with the formation provisions, the new articles of association, the exchange ratio of the shares and the new obligations imposed on the shareholders are described in their legal and economic aspects. Merely writing “The company will convert to a joint-stock company for growth purposes” does not satisfy the duty to explain the changes to shares and obligations.
What conditions apply to waiving the report in SMEs?
Small and medium-sized enterprises may waive the preparation of the conversion report with the approval of all shareholders. SME status and unanimity are required together. SME status alone is not sufficient, and neither is the three-quarters majority for the conversion resolution sufficient for waiving the report.
The Istanbul Chamber of Commerce registration guide provides that SME status is documented by a report from a certified public accountant (SMMM) or a sworn-in certified public accountant (YMM). The waiver does not by itself remove the plan, the new articles of association, the financial determinations or the right of inspection. The provision on the audit of former transactions in TTK Article 187 has been repealed; nevertheless, the reports on capital, equity and registered assets required in the registry application remain important. Mistaking these different reports for one another may leave the application incomplete.
How is the six-month balance sheet rule applied?
TTK Article 184/2 contains two separate situations: If more than six months have passed between the balance sheet date and the date on which the conversion report is prepared, an interim balance sheet is drawn up. If significant changes have occurred in the company’s assets after the last balance sheet, an interim balance sheet is required even before six months have passed. The effect of a large loss, a significant sale of assets or new borrowing is examined under this second condition.
For example, more than six months lie between a December 31 balance sheet and a report dated July 10. Even if the report is to be prepared on March 15, a significant change in assets that occurred in February may give rise to the need for an interim balance sheet. That an exception exists to the physical inventory requirement when preparing an interim balance sheet does not mean that depreciation, value adjustments and significant changes can be ignored.
Three documents, three separate functions. The plan shows the change to be made, the report its reasons, and the financial determinations its financial basis. The SME exception for the report does not remove the other documents.
Why are the right of inspection and the general assembly majority decisive?
Under TTK Article 188, the plan, the report, the financial statements of the last three years and, if necessary, the interim balance sheet are made available for inspection by the shareholders at the company’s registered office thirty days before the general assembly resolution. The shareholders are informed in an appropriate manner; copies are provided free of charge to those who request them. That the preparation of a report has been validly waived does not make it unnecessary to make the other documents available for inspection.
A document merely being on the manager’s computer is not the same as making it accessible to the shareholders. The date on which the documents were made available, the method of notification, copy requests and the replies given must be retained. A sentence in the general assembly minutes does not replace an inspection right that was not actually afforded.
Two separate three-quarters calculations are made in a limited company
TTK Article 189/1-c requires a resolution of three-quarters of the shareholders, provided they hold at least three-quarters of the capital. The calculation is not made only on the basis of those attending the meeting. A shareholder holding a large part of the capital cannot satisfy the headcount condition alone.
| Affirmative votes in a company with four shareholders | Capital held by those voting in favor | Statutory double threshold |
|---|---|---|
| Two shareholders | 90% | The shareholder-count condition is not met |
| Three shareholders | 70% | The capital condition is not met |
| Three shareholders | 80% | Both conditions are met |
The table assumes that the other procedural requirements have also been met. In a company with two shareholders, the affirmative votes of both shareholders are required; in a company with three shareholders, those of all three. The majority cannot be lowered by rounding a fractional headcount down. In a company with a sole shareholder, the resolution is adopted by the sole shareholder, and the resolution documents are still prepared.
The same quorum does not apply when a joint-stock company converts to a limited company
TTK Article 189/1-a requires two-thirds of the votes present at the general assembly, provided that they represent two-thirds of the articles-of-association or issued capital. The special case in TTK Article 421/5-b is reserved. If the conversion to a limited company will give rise to an obligation of additional payments or personal performance, the approval of all shareholders is required. A single “75 percent” rule therefore cannot be stated for conversions in both directions.
The Bursa Regional Court of Appeal decision: Why was 89 percent of the capital not considered sufficient?
The company in the decision of the 5th Civil Chamber of the Bursa Regional Court of Appeal (Bursa Bölge Adliye Mahkemesi 5. Hukuk Dairesi) dated April 9, 2025, E.2022/485, K.2025/523, had four shareholders. Two shareholders holding 76 percent and 13 percent of the capital had approved the conversion. Despite a total of 89 percent of the capital, the affirmative votes of three-quarters of the four shareholders were lacking. In addition, there was no approval of all shareholders for waiving the conversion report, which had not been prepared. The chamber rejected the appeal against the annulment judgment on the merits. It is stated that the decision is open to appeal on points of law; it has not been verified whether it has become final. The decision is a concrete example of the fact that the capital majority and the headcount majority are calculated separately.
Two conditions apply together in a conversion from a limited company to a joint-stock company. For approval of the conversion, three-quarters of both the number of shareholders and the capital must be reached at the same time. A high capital percentage does not make up for a shortfall in the number of shareholders.
How are the shareholders’ shares and privileges protected?
Under TTK Article 183, shareholders’ shares and rights are protected. Writing the former nominal amount unchanged is not always sufficient. The new shares’ proportion of capital, voting power, participation in profit, privileges and economic value must be compared together. The articles of association, the plan and the share distribution table must be consistent with one another.
For privileged shares, shares of equal value or appropriate compensation come into question; for shares without voting rights, shares of equal value or shares carrying voting rights; for usufruct certificates (intifa senedi), rights of equal value or real-value compensation based on the valuation date set out in the statute. Which protection is required depends on the nature of the existing right. The mere change of company type does not justify the removal of privileges without reason.
A conversion is not a method of automatically removing a dissenting shareholder from the company. If a new investor will be admitted or shares will be transferred at the same time as the transaction, a separate legal basis and documents for this must be shown. In particular, the form and approval requirements for a limited company share transfer made before the conversion cannot be skipped on the ground that the company will later convert to a joint-stock company. If share rights have not been protected, the review and appropriate equalization route in TTK Article 191 is considered.
How are registration, notifications and the cost of the transaction planned?
Under TTK Article 189/2, a change of type becomes legally valid upon registration with the trade registry. The general assembly resolution alone does not complete the conversion. The management body has the conversion and the new articles of association registered; the resolution is announced in the Turkish Trade Registry Gazette (TTSG). TTK Article 190, in turn, regulates not registration but the provisions applicable to personal liability and debts arising from employment contracts.
In Istanbul Chamber of Commerce practice, in addition to the application through the central registration system (MERSİS), the plan, the resolution, the new articles of association, the report or valid waiver documents, and the financial determinations are prepared. The report of the SMMM/YMM or, where applicable, the auditor contains determinations on the payment and coverage of the capital, equity and assets recorded in special registries. Records of real property, vessels and intellectual property rights, branches and necessary permits are notified separately. If there is a simultaneous capital increase, the increase documents are also attached.
The presence of a foreign shareholder does not prevent a Turkish company from using this procedure. Foreign shareholder notifications and representation documents are prepared appropriately for the application file. The relocation to Türkiye of a company established in a foreign country is not the same transaction; it cannot be concluded on the basis of this guide alone.
The cost does not consist of a single “conversion fee.” Professional reports, the announcement, registry services, necessary notary and translation work, and any capital increase are budgeted together. The amount of capital is not a transaction expense; it is a separate obligation relating to the company’s capital structure. The existence of a fee or tax exemption does not show that all services will be free of charge. The exact total can be calculated on the basis of the tariff on the date of the transaction and the specific file.
Track the time limits from their different starting points. Six months runs between the balance sheet and the report; thirty days before the general assembly; and two months, in the relevant actions, as a rule from the TTSG announcement. Two months is not sixty days.
How are creditors, old tax debts and employees affected?
The company’s debt and the shareholder’s personal liability must be distinguished
The company’s debt continues within the same legal entity. A limited company shareholder is not personally liable for all private-law debts merely because of being a shareholder; personal suretyship, a guarantee or another liability arising by law may exist separately. Converting to a joint-stock company does not automatically terminate an existing suretyship or guarantee. The scope, duration and contract of the security are examined separately.
The reference in TTK Article 190 to Article 158 concerns the preservation of existing personal liability. For debts within its scope, the debt must have arisen, or the event giving rise to the debt must have occurred, before the announcement. A three-year limitation period is provided for the relevant personal liability claims; if the claim falls due later, the starting point changes accordingly. This provision is not a general rule that extinguishes every company claim in three years or makes every limited company shareholder liable for all debts.
| Debt or right | Effect of the conversion | Document to examine |
|---|---|---|
| The company’s contractual debt | Continues against the same company | Contract, invoices, payment records |
| The shareholder’s suretyship or guarantee | Is not erased automatically by the change of type | Security agreement and its scope |
| Tax and other public receivables | Special liability and collection rules apply | Period, office held, share and collection documents |
| Employee receivables | Prior service history is not reset | Employment contract, payroll, service records |
The joint-stock company shield for public debts cannot be applied retroactively
For public debts of the limited company period, the joint liability of shareholders under Article 35 of Law No. 6183 is considered; for legal representatives, repeated Article 35 under its relevant conditions, and for tax duties, VUK Article 10. For premium debts, the special provisions of Article 88 of Law No. 5510 are also important. Being a shareholder, a manager, a board member and a legal representative are not the same capacity.
A correct assessment takes together the period of the debt, its date of accrual and due date, the person’s office or share on those dates, the conditions for collection from the company and the payment order process. The conclusion “We are now a joint-stock company, so nobody can be held liable for the former limited company period” cannot be drawn. Conversely, it is also incorrect to impose automatic liability for every debt on a former shareholder or manager. The three years in TTK Article 158 cannot replace the special collection and limitation regime for public receivables.
The tax facilitation for transfers does not eliminate all taxes
KVK Article 19/2 treats a change of type that takes place under the conditions required in that article as a transfer for tax purposes. The Revenue Administration’s (GİB) Corporate Tax General Communiqué explains this framework together with registered balance sheet values and other conditions. The continuation of the same company under the TTK and the characterization as a “transfer” in tax legislation are on different planes.
Under the conditions of KVK Article 20, the fact that the gain arising from the conversion is not separately taxed does not mean that the profit from ordinary activity up to the conversion is exempt from tax. Declaration and undertaking obligations must be fulfilled. The Communiqué provides thirty days from the announcement in the Trade Registry Gazette for the transfer declaration. VAT, stamp tax, fees and the taxation of a subsequent sale of shares are examined separately under their own provisions; a conversion alone gives no guarantee of a “tax-free sale.”
Does employees’ seniority start again?
Because the employer continues as the same legal entity, the employment history is not reset merely because of the change of type. The reference in TTK Article 190 to Article 178 is taken into account with respect to debts and protections arising from employment contracts. No automatic termination or severance pay (kıdem tazminatı) outcome can be built solely on the change in the type designation in the company name. If there is a change in working conditions, an objection or an allegation of termination, a concrete assessment together with the applicable labor law provisions is required. The SGK workplace records and the necessary notifications are also followed up separately.
Which action is brought against a change of type?
Not every unlawfulness gives rise to the same claim. A shareholder seeking the economic equivalent of his or her share and a shareholder seeking to eliminate the conversion resolution use different legal routes.
| Route | Purpose and claimant | Basic time limit |
|---|---|---|
| TTK Article 191 | Request for appropriate equalization by a shareholder whose shares or rights have not been duly protected | Two months from the TTSG announcement of the resolution |
| TTK Article 192 | A dissenting shareholder’s request, under the statutory conditions, for annulment of an unlawful resolution | As a rule two months from the announcement; from registration if no announcement is required |
| TTK Article 193 | Claim for damages by the company, shareholder or creditor harmed by the faulty acts of those involved in the transaction | Not to be confused with the special two-month action period; the relevant limitation period for liability is examined |
The difference between a share review and an annulment action
Under TTK Article 191, every shareholder may request appropriate equalization from the commercial court of first instance at the company’s registered office on the ground that the protection of shares and rights is inadequate. For this route, the requirements in Article 192 of voting against and having it entered in the minutes are not carried over as such. The action does not affect the validity of the conversion; there are special provisions on the effect of the decision for shareholders in the same legal position and on the costs being imposed on the company.
TTK Article 192, by contrast, is based on the violation of Articles 134–190. The right of action is regulated for shareholders who did not vote in favor of the resolution and had this entered in the minutes. In cases such as not being invited to the meeting or being prevented from voting, the relationship of the specific case to other rights of action and to the provisions on invalidity is assessed separately. A dissenting shareholder who attends the meeting should therefore have the negative vote and the objection entered in the minutes.
If the deficiency can be remedied, the court may grant time; if it is not or cannot be remedied, annulment comes into question. This possibility does not mean that every resolution adopted with an inadequate majority can be corrected afterwards. It should not be assumed that the date on which the announcement was learned replaces the statutory starting point; nor should two months be calculated directly as sixty days.
Fault, damage, evidence and interim protection
TTK Article 193 concerns the damage caused by those involved in the transaction through their fault. In an allegation of incorrect valuation or concealment of information, the duty, breach, fault, damage and causation must be made concrete. The two- and five-year limitation periods under TTK Article 560, together with any longer criminal limitation period, are evaluated separately; a claim for damages is not reduced to the two-month period of the annulment action.
These actions are handled within commercial jurisdiction; the special jurisdiction provisions and the nature of the claim are checked. For money receivable and damages actions within TTK Article 5/A, mediation before filing is a condition. A mere annulment of a resolution is not evaluated within the same scope. For a claim under Article 191, how the determination of the equalization and the collection of money are requested is also important; a single answer should not be given for all structural-transaction actions. Preserving the time limit, the correct claim and the mediation assessment must be carried out together.
The plan, the report, the former and new agreements, the share table, the balance sheets, the records of making documents available for inspection, the invitation documents, the list of attendees, the minutes and the registry announcement are the basic evidence. The company side can defend proper access, the quorum and the protection of shares with these documents. Filing an action does not stop the transaction automatically; if interim protection is needed, the danger, the prima facie showing and proportionality must be demonstrated under HMK Article 389 and the following articles.
The right claim for each problem. TTK Article 191 is considered for the protection of shares, TTK Article 192 for the unlawfulness of the resolution, and TTK Article 193 for damage caused by fault. The conditions and time limit of each route are checked separately.
Conclusion
Converting from a limited company to a joint-stock company means changing the company’s legal structure while it continues to exist. A reliable file addresses together the financial determinations, the thirty-day inspection, the separate majority calculations for the number of shareholders and the capital, the protection of share rights, and the obligations after registration. The position of old debts is examined separately. In a dispute, share equalization, annulment of the resolution and fault-based damages should be distinguished from one another and claimed within the appropriate time limit and procedure.
Related articles: Shareholders’ Rights in Mergers and Demergers; Privileged Shares and the Protection of the Special Board; Capital Reduction in Companies and the Protection of Creditors; Contribution of Capital in Kind to a Company; Annulment of a Company General Meeting Resolution: Deadlines, Nullity and Stay of Execution; Loss of Capital and Over-Indebtedness: TTK 376 Measures.
Frequently Asked Questions
Is a new legal entity established in a conversion from a limited company to a joint-stock company?
No. Under TTK Article 180, the same legal personality continues in the new type. The application of the formation provisions of the new type does not change this continuity.
Can a shareholder holding 90 percent decide alone?
In a limited company with more than one shareholder, a capital majority alone is not sufficient. The affirmative vote of at least three-quarters of the number of shareholders is also required. In a company with a sole shareholder, the resolution is adopted by the existing sole shareholder.
Can a company that is an SME convert without preparing a report?
If all shareholders approve, the conversion report can be waived. The plan, the financial determinations and the inspection obligations do not lapse automatically for this reason.
If the last balance sheet is three months old, is an interim balance sheet unnecessary?
Not always. Even if the six-month period has not been exceeded, an interim balance sheet is required if there has been a significant change in assets. The statutory comparison is made between the balance sheet date and the date of the conversion report.
Does a change of type erase old tax and SGK debts?
No. The company’s debts continue. The personal liability of a shareholder, manager or representative is determined separately according to the period of the debt, the person’s capacity and the provisions on the relevant public receivable.
When does the two-month action period for a change of type begin?
For TTK Articles 191 and 192, the rule is the announcement of the resolution in the Turkish Trade Registry Gazette. For cases in which no announcement is required under Article 192, registration is provided as the starting point. The basis of the claim and the calculation of the time limit must be checked separately.
Is the absence of a conversion report always a ground for annulment?
If there is a valid SME exception and the approval of all shareholders, a report may not be required. If these conditions are absent, the lack of a report constitutes unlawfulness; the conditions for the action, other deficiencies and whether they can be remedied are assessed separately.
How many days does the transaction take?
There is no fixed total period valid for everyone. The thirty-day inspection, the preparation of the financial reports, necessary permits, any capital increase and the registry application are scheduled together.
Sources and legal bases
- Turkish Commercial Code No. 6102, in particular Art. 180–193, 332, 376 and 560 — official text from the Ministry of Trade. Current practice and subsequently changed amounts have been evaluated together with the sources below.
- Istanbul Chamber of Commerce, Change of Type — registration procedures from limited to joint-stock company and from joint-stock to limited company.
- Ministry of Trade, Minimum Capital Amounts for Joint-Stock and Limited Companies Have Been Increased — Presidential Decision No. 7887.
- Revenue Administration (GİB), Corporate Tax General Communiqué, Series No. 1 — current text of July 27, 2026, in particular sections 19.1 and 20.1.
- Revenue Administration (GİB), Collection General Communiqué — provisions on the liability of limited company shareholders and legal representatives.
- SGK, Workplace, Employer and Notification of the Workplace.
- Ministry of Justice, Mediation Refresher Training — mediation as a condition for commercial actions and the amendment by Law No. 7445.
- Court of Cassation Civil General Assembly, 14.02.2018, E.2017/15-247, K.2018/229 — full text of the decision.
- Bursa Regional Court of Appeal 5th Civil Chamber, 09.04.2025, E.2022/485, K.2025/523 — decision record.