A shareholder who fails to pay the capital debt on time faces collection of the claim, default interest and, where the conditions are met, damages and a contractual penalty. Forfeiture (ıskat), meaning the loss of the rights arising from the share, does not occur automatically. It requires the correct determination of the debt and its due date, a proper notice, a one-month payment period and a decision of the competent body. In a limited liability company, the joint-stock company provisions apply by analogy under TTK Article 585; the non-payment of the capital debt cannot be turned into a ground for directly removing the shareholder from the company by bypassing the special forfeiture procedure.
This review concerns the non-payment of subscribed capital in joint-stock and limited liability companies. The validity of a new capital increase resolution, the restriction of pre-emptive rights and the recovery of loans made by shareholders are separate disputes. Without a commitment to contribute capital, a new capital debt cannot be created for every financing need solely on the basis of being a shareholder.
To Whom Is the Capital Debt Owed, and How Does It Differ from Other Payments?
Under TTK Article 128, a shareholder is indebted to the company for the capital undertaken in a duly executed articles of association. The fact that one shareholder has paid in his or her capital does not entitle that shareholder to claim the other shareholder’s missing capital amount for his or her own account. The company’s capital claim and the shareholders’ claims against one another are separate property relationships. [1]
Money a shareholder lends to the company, an advance drawn from the company, the sale price paid to the previous shareholder when taking over the share, and the capital commitment are not the same debt. In particular, a payment made to the seller in a share transfer does not by itself extinguish the company’s unpaid capital claim. Nor does a single balance in the shareholders’ current account alone show which share’s capital has been paid.
In a limited liability company, the additional payment obligation based on the articles of association is also examined separately. TTK Article 603 provides for a provision in the articles, statutory conditions of need and a ceiling of twice the nominal value of the share. The arising of an additional payment obligation differs from the payment of capital that was committed in advance. A company’s loss does not automatically create an unlimited additional financing debt for all shareholders. [1]
In capital contributed in kind, the cash payment schedule does not apply directly. Registration of real estate, delivery of movable property or assignment of a right is assessed within the framework of TTK Article 128 and the special provisions for the type of company. Resolving the non-delivery of real estate by running interest, without distinction, as if it were a cash capital debt changes its legal nature.
When Is Capital Paid in Joint-Stock and Limited Companies?
One-quarter payment and the twenty-four-month ceiling in a joint-stock company
Under TTK Article 344, in a joint-stock company at least twenty-five percent of the nominal value of shares subscribed in cash is paid before registration, and the remainder within twenty-four months following registration. Issuance premiums are paid in full before registration. Cash payments at incorporation are made to a special bank account opened in the name of the company in formation; the payment is documented by a bank letter. [1]
The twenty-four months is not an unconditional due date that every shareholder may await until the last day. The articles of association may provide for earlier payment. If the date on which the remaining amount is requested is left to the board of directors’ call, a call is required under TTK Article 481. Special payment provisions apply separately to issuances subject to capital markets legislation; the general schedule in this article cannot be carried over unchanged to all publicly offered company transactions.
A limited liability company has no twenty-five percent pre-registration requirement
TTK Article 585 removed, for limited liability companies, the condition that at least twenty-five percent of the cash share price be paid before registration. This exception does not remove the obligation to pay the capital. The twenty-four-month payment framework, earlier due dates in the articles of association and duly made payment calls are taken into account. Because of TTK Article 590, a connection with the incorporation rules must also be made in a capital increase. [1]
| Issue to examine | Joint-stock company | Limited liability company |
|---|---|---|
| Cash share price at incorporation | At least twenty-five percent before registration | The statutory twenty-five percent up-front payment requirement does not apply |
| Remaining payment schedule | Within twenty-four months following registration; earlier due date possible | The same ceiling by analogy; the articles and the call are examined |
| Body that manages the payment call | Board of directors | The manager or managers, as appropriate to the company structure |
| Special route for non-payment of the debt | TTK Articles 482–483 | Application by analogy through the reference in TTK Article 585 |
| Relationship to general removal from the company | Forfeiture is directed at specific shares | Not to be confused with removal under TTK Article 640 |
The company’s obligation to increase its minimum capital is also different from the due date of a shareholder’s existing capital installment. Adopting an increase resolution, subscribing to a share, registration and a payment call are not interchangeable acts.
Why Are the Payment Call, Default and the Forfeiture Notice Examined Separately?
First the amount of the debt and its maturity are determined
Maturity (muacceliyet) is the point at which performance of the claim can be demanded. Default (temerrüt), by contrast, is the failure to perform a matured debt on time despite the required conditions being met. If the payment date is fixed with certainty in the articles of association, the passing of that date may, under TTK Article 482/1, give rise to interest without a separate default notice being required. If the date must be set by the competent body, a valid call must first be made. [1, 2]
The call under TTK Article 481 must clearly state the requested proportion or amount, the payment date and the place of payment. Unless the articles of association provide another method, the call is made by announcement. A balance e-mail sent by the accounting department is not treated as a statutory call without examining the resolution of the competent body and the required announcement procedure. If all shareholders are in the same position, the consistency of the call and of the choice of sanction with the principle of equal treatment is also assessed.
A forfeiture notice cannot be sent directly to a shareholder who has not been placed in default
In the decision of the Istanbul Regional Court of Appeal (BAM) 43rd Civil Chamber dated June 15, 2023, E.2020/1334, K.2023/656, establishing that the capital debt had not been paid was not considered sufficient on its own. The ruling that the board of directors’ resolution was void was upheld, because the forfeiture announcement was made without it being proved that the necessary payment call had been made and that default had occurred. [6]
This decision does not mean that two notarial notices with the same content must be sent in every case. A fixed due date, the method agreed in the articles of association and the type of the share affect the outcome. The key distinction is that the act that places the shareholder in default and the forfeiture notice that follows default serve different functions. In a case where there is no earlier proof of default, the statement alone that “the shareholder already knew” is not sufficient.
Interest, Damages and Contractual Penalty on the Capital Debt
Start of interest and its calculation
Where cash capital is not paid on time, TTK Article 482/1 provides for default interest. Without examining the special payment schedule in joint-stock and limited liability companies, interest should not be run on the entire debt from the date of incorporation by relying on the general provision, TTK Article 129. First the installment that can be demanded, the due date and the valid call are determined. [1]
In calculating interest, the applicable contractual provision, the commercial nature of the transaction and Law No. 3095 are assessed together. In commercial matters, the possibility of requesting advance interest (avans faizi) under the conditions in Article 2 of the same Law may arise. It is not correct to apply a single current rate to all past years. For each period the calculation should be built on the unpaid principal × the applicable annual rate × the period of delay; interim payments and rate changes should be shown on separate lines. [4]
Interest is not a gain the shareholder would claim on paid-in capital; it is the consequence of the delay in the capital debt. Moreover, the mere fact that the claim is a “commercial claim” does not justify adding interest to the principal at period end and charging interest on it again.
For damages, loss and notice also matter separately
TTK Article 128/7 allows the company to claim its loss caused by the delay; it separately regulates the notice requirement for the damages claim. TTK Article 482/4 also reserves the company’s rights to damages. That interest may arise without notice does not mean all conditions for damages are met. [1]
The company must show the connection between the loss it claims and the late payment of the capital. Where financing expense, additional credit cost or a missed transaction is alleged, the contracts, bank records and transaction dates are important. The same loss cannot be collected twice, once as interest and once as damages. For loss exceeding interest, the fault and burden-of-proof regime in TBK Article 122 is assessed separately. [2]
A contractual penalty does not arise automatically
Under TTK Article 482/3, a contractual penalty requires a provision in the articles of association. In a limited liability company, the application by analogy and the articles of association are examined. A notice sent later does not by itself create a penalty that did not exist before. The notification and one-month period conditions in TTK Article 483 are also important for this sanction. [1]
Conditions and Consequences of Forfeiture in a Joint-Stock Company
The notice must grant one month and state the loss of rights clearly
Forfeiture means depriving the shareholder of the rights arising from the shares in default. Under TTK Article 483, the board of directors must notify that the amount in default is to be paid within one month, that otherwise the relevant share rights will be lost and, where the conditions are met, that a contractual penalty will be demanded. One should not rely solely on the expression “legal action will be taken.” [1]
The statutory general method is the Turkish Trade Registry Gazette (Türkiye Ticaret Sicili Gazetesi) and the form of announcement provided in the articles of association. For holders of registered share certificates, a registered letter with return receipt is provided instead of an announcement; the one-month period starts from receipt of the letter. This distinction does not justify placing every share for which no certificate has been printed automatically under the same notification regime. Whether an interim certificate (ilmühaber) exists is also examined separately.
TTK Article 483 also regulates a message on the website. However, Article 1524/6 states that the statutory provisions on websites do not apply to capital companies that are not subject to audit. It is wrong both to impose an unconditional obligation to set up a website on every small company, and to skip the website announcement in a company that is subject to audit. Whether the company falls within the audit scope must be determined as of the date of the act. [1]
A valid bearer share certificate cannot be issued for a share whose price has not been fully paid; TTK Article 484/2 expressly prevents this. Therefore the approach “the bearer certificate has not been paid for, let us forfeit it by announcement alone” should first be questioned with respect to the validity of the certificate.
Expiry of the period alone does not end the shareholding
After the notice has gone unanswered, the competent body must additionally express its will to forfeit. The payment call, the threat of forfeiture and the completed forfeiture are not the same act. The resolution must clearly identify the person, the relevant shares and the debt; the resolution must be delivered to the addressee and the records must be arranged accordingly. The literature emphasizes that a forfeiture resolution takes effect when it reaches the addressee. [9]
Forfeiture is directed only at the relevant shares whose price is unpaid. If the same person has other shares whose price has been fully paid, these cannot be forfeited merely because they belong to the same person. By contrast, an earlier partial payment on the share in default does not by itself prevent the rights arising from that share from being lost through forfeiture. Which share or installment the payments for several shares were set off against is therefore decisive.
Partial payment and liability after a later sale
In assessing payments, TBK Article 100 on the set-off of accrued interest and expenses is also taken into account. The fact that a transfer has been made only in the amount of the principal does not show that, in every case, the capital debt has been closed with all its accessories. The independent existence of an interest or penalty claim must be distinguished from whether a capital balance continues; an unrelated debt should not be collected under the threat of forfeiture. [2]
TTK Article 482/2 provides for the loss of the rights arising from the subscription commitment and from partial payments. The sale of a share to another person is not an ordinary exit that requires the amount paid to the former shareholder to be returned as a withdrawal payment (ayrılma akçesi). Even so, the former shareholder is not fully released from the debt in every case: The former shareholder is liable to the company for the amount that remains open from the payments of the new shareholder (TTK Article 483/3). [1]
The sale of a forfeited share is not a capital reduction. Acts relating to cancellation of the share or the certificate do not by themselves carry out the statutory capital reduction procedure. The company cannot collect the same claim twice from the former shareholder and the new buyer; the sale price, the costs and the open amount must be calculated.
Distinguishing Forfeiture from Removal for Just Cause in a Limited Liability Company
TTK Article 585 expressly provides for recourse by analogy to the joint-stock company provisions with respect to payment, the consequences of non-performance and the transfer of shares whose price has not been paid. It is therefore not correct to reject the possibility of forfeiture categorically in a limited liability company. However, transferring the organ names and the share certificate method belonging to a joint-stock company to a limited liability company without modification is also not sufficient. The managers’ authority, the share structure, the articles of association and the form of notification are assessed together. [1]
In the decision of the 11th Civil Chamber of the Court of Cassation (Yargıtay) dated September 18, 2017, E.2016/1728, K.2017/4475, a removal decision rendered under TTK Article 640 on the basis of the non-payment of the capital debt and of another debt taken from the company was reversed. The Chamber explained that for the capital debt the special procedure in Article 483 should be applied through the reference in Article 585, and that the other debt taken from the company could also be pursued through collection routes. [5]
The decision does not mean that a shareholder who does not pay can under no circumstances be removed. It prevents the special procedure from being bypassed by using the fact of non-payment of capital. If there are other just causes independent of the capital debt, their concreteness, the removal resolution and the conditions of the action are assessed separately. The three-month period for setting aside a contractual removal resolution under TTK Article 640/2 is not the same as the one-month payment period granted in the forfeiture notice.
Collection Action, Mediation and Limitation
The company pursues the claim
Under TTK Article 128/7, the company may bring an action for performance or resort to an appropriate enforcement route. Forfeiture is not a mandatory first option. Another shareholder’s request, solely in the capacity of shareholder, to collect the capital claim in his or her own name should not be confused with the company’s authority to claim its receivable. The additional standing to sue that TTK Article 128/7 expressly gives to shareholders is for partnerships of persons. Where a manager’s failure to collect capital causes loss to the company, the liability route under TTK Articles 553 and 555, and Article 644 for limited liability companies, may also arise separately. [1]
These disputes are commercial actions under TTK Articles 4–5. For an action the company brings against its shareholder on the basis of the shareholding relationship, the court of the place where the company’s registered seat is located has exclusive jurisdiction under HMK Article 14/2. The competent court is, as a rule, the commercial court of first instance (asliye ticaret mahkemesi). [1, 3]
On mediation, the nature of the claim is decisive
The condition precedent to suit that TTK Article 5/A introduced for commercial actions concerning monetary claims must be read together with the requirement of free disposability in HUAK Article 1/2. [10] There is an academic view that, because a capital claim cannot be waived, claims for cash capital and the interest attached to it are not suitable for mediation. Kaya and Tatlı justify this view on the basis of the protection of capital and the interests of third parties. [8]
By contrast, in the decision of the Istanbul 12th Commercial Court of First Instance (Asliye Ticaret Mahkemesi) dated February 25, 2025, E.2024/273, K.2025/148, the court stated that the mediation requirement had been fulfilled in a capital claim action and proceeded to the merits. [7] This first-instance decision is not a binding general rule that resolves all disputes; it shows a differing approach in practice. Before filing suit, the claims for the principal capital, interest, damages and nullity of the resolution should be characterized separately. One should not assume that a reduction from the capital is possible merely because money is claimed, or that all preliminary procedures can be skipped merely because the subject is capital.
The five-year calculation and the debate on continuation of the partnership
TBK Article 147/4 provides a five-year limitation period for claims arising from a partnership relationship; Article 149 ties the start to maturity. For a claim that falls due upon notice, the date on which the notice could have been given is also important. Nevertheless, regarding the capital contribution obligation, there is a debate between the approach that limitation does not run while the partnership continues and the view that the general five-year period applies. [2, 9]
In the Istanbul 12th Commercial Court of First Instance decision mentioned, the approach of continuation of the partnership was adopted; the effect of an acknowledgment of the debt on limitation was also discussed in the file. [7] For this reason it cannot be said that “five years have passed, the debt has definitely been erased.” A company seeking collection should also not remain inactive by relying on this debate. The due date, acknowledgment of the debt, partial payment, enforcement proceedings and filing dates should be used to build the calculation of interruption and the new period under TBK Articles 154–156.
How Are Payment and Procedural Errors Proved?
| Dispute | Documents to examine | Issue the document must resolve |
|---|---|---|
| Is there a capital debt? | Articles, subscription undertaking, increase and registration records | Who undertook which share, in what amount |
| Was the debt paid? | Bank slip, company account, accounting records | Whether the money was transferred to the company and to the correct debt |
| Has the due date passed? | Articles, body resolution, call announcement | Existence of a fixed due date or a valid call |
| Was one month correctly given? | Announcements, letter, delivery record, required website publication | The correct start of the period and its full grant |
| Did forfeiture occur? | Body resolution, notification to the addressee, share records | Separating the threat stage from the final resolution |
| Is an open debt left? | Share sale record, collections, interest and expense calculation | The remaining amount, without duplicate collection |
Under HMK Article 190, the parties prove the facts from which they derive favorable consequences. The company must establish the arising of the debt, its amount and the required calls; the shareholder raising a payment defense must establish that the payment was made. The evidentiary value of commercial books is assessed under the conditions of HMK Article 222. A one-sided correction in the company’s ledger does not by itself justify disregarding a payment proved by a bank record. [3]
If it is alleged that the forfeiture resolution is unlawful, a nullity review may arise in a joint-stock company under TTK Article 391 and, in a limited liability company, within the scope of the relevant reference in Article 644. Filing an action does not by itself stop the act. Where there is a risk that the shares will be transferred to a third party or that the exercise of rights will be prevented, an interim injunction of appropriate scope may be requested under the conditions of HMK Article 389. The periods for requesting enforcement of the injunction and, for a pre-suit injunction, for filing the main action must also be monitored. [1, 3]
Do Liquidation, Bankruptcy and Share Transfer End the Capital Debt?
Entering liquidation does not erase the capital claim. TTK Article 542/1-a regulates the liquidators’ collection of unpaid share prices when necessary; in the liquidation of a limited liability company, the reference in Article 643 is taken into account. In bankruptcy as well, the company’s claim against its shareholder is part of the company’s assets; the authority to pursue and collect it is exercised under the rules of bankruptcy liquidation. It cannot be concluded from this that a company creditor may go directly against all of the shareholder’s personal assets merely because of the company’s debt. [1]
In a joint-stock company, a person who acquires a registered share whose price has not been fully paid assumes the obligation to pay the remaining price upon registration in the share ledger under TTK Article 501. For the special liability of a transferor who made a commitment at incorporation or at an increase, bankruptcy within two years from the date of incorporation or of the increase and the transferee’s being deprived of the share rights are important together. This is not a general rule of joint and several liability for two years from the transfer date in every share transfer. [1]
Conclusion
In an unpaid-capital file, the first step is not to prepare a resolution to remove the shareholder but to document which share must be paid, in what amount and on what date. The company’s right to collect and its power of forfeiture depend on separate conditions. In particular, a valid call, the one-month notice, the correct body and the protection of paid-up shares determine the lawfulness of a severe loss of rights. In a limited liability company too, the special forfeiture procedure cannot be neutralized by the general removal provisions.
Related articles: Shareholder’s Loan to the Company: Proof and Recovery; Capital Increase and Pre-emptive Rights: Protecting the Shareholder; Share Transfer in a Limited Liability Company: Notary, Approval and Registration; Dividend Claim Against the Company and Shareholder Rights.
Frequently Asked Questions
Is a shareholder who does not pay his or her capital automatically removed from the company?
No. Default, a valid notice, a payment period and a decision of the competent body are each required. Non-payment of the debt and the end of the shareholding are not consequences that occur at the same moment.
Must one-quarter of the capital be paid in at incorporation in a limited liability company?
The statutory twenty-five percent up-front payment requirement does not apply to limited liability companies. The articles of association, an earlier due date and the twenty-four-month payment framework must still be examined.
When does the one-month forfeiture period start?
It is determined according to the notification method. In the case of a registered letter with return receipt sent to the holder of a registered share certificate, the period starts from the date the letter is received. The date of posting cannot be taken as the basis.
Does having paid part of the capital prevent forfeiture?
Not always. The existence of a partial payment on the share in default does not keep that share outside forfeiture. However, separate shares whose price has been fully paid cannot be included in the same sanction.
Can another shareholder claim the unpaid capital for his or her own account?
The owner of the capital claim is the company. A shareholder’s claim in his or her own name and a liability action aimed at having the company’s loss paid to the company are different legal routes.
Is the person whose share is forfeited released from the remaining debt?
Under TTK Article 483/3, liability may continue for the amount that remains open from the payments of the new shareholder. Partial payments, the sale price and accessories are calculated separately.
Once five years have passed on a capital debt, can it no longer be pursued?
This result is not automatic. Whether limitation runs while the partnership continues is debated, and an acknowledgment of the debt, a partial payment, an action and enforcement proceedings can change the calculation of the period.
Does filing an action against a forfeiture resolution stop the sale of the share?
Not by itself. If the conditions are met, an interim injunction should be requested separately; the scope of the decision and the periods for its enforcement should be monitored.
Sources
- Law No. 6102 on the Turkish Commercial Code (6102 sayılı Türk Ticaret Kanunu), in particular Arts. 4–5/A, 128–129, 344–345, 357, 391, 480–484, 501, 542, 553–555, 573, 585, 590, 603, 640, 643–644 and 1524. Ministry of Justice legislation record.
- Law No. 6098 on the Code of Obligations (6098 sayılı Türk Borçlar Kanunu), in particular Arts. 100, 117, 122, 147, 149, 154 and 156. Current text of the law.
- Law No. 6100 on Civil Procedure (6100 sayılı Hukuk Muhakemeleri Kanunu), in particular Arts. 14, 190, 199, 222 and 389–397. Current text of the law.
- Law No. 3095 on Statutory Interest and Default Interest (3095 sayılı Kanuni Faiz ve Temerrüt Faizine İlişkin Kanun), Arts. 1–3. Text of the law.
- Court of Cassation (Yargıtay) 11th Civil Chamber, September 18, 2017, E.2016/1728, K.2017/4475. Capital debt and the special forfeiture procedure in a limited liability company. Full text of the decision, De Jure database — an account may be required for access.
- Istanbul Regional Court of Appeal (Bölge Adliye Mahkemesi) 43rd Civil Chamber, June 15, 2023, E.2020/1334, K.2023/656. Separating the payment call, default and the forfeiture notice. Full text of the decision, De Jure database — an account may be required for access.
- Istanbul 12th Commercial Court of First Instance (Asliye Ticaret Mahkemesi), February 25, 2025, E.2024/273, K.2025/148. Capital claim, limitation and payment call. Full text of the decision, De Jure database — an account may be required for access.
- Kaya, Mustafa İsmail / Tatlı, Burçak, “Evaluation of Actions Seeking Performance of the Capital Debt in Commercial Companies from the Perspective of Mediation as a Condition of Suit” (“Ticaret Şirketlerinde Sermaye Borcunun İfası Talepli Davaların Dava Şartı Arabuluculuk Açısından Değerlendirilmesi”), Hacettepe Hukuk Fakültesi Dergisi, Special Issue, 2022, pp. 36–76, in particular pp. 59–69. DOI:10.32957/hacettepehdf.1086165.
- Erdoğan, Abdullah, “Non-Payment of the Share Price and Forfeiture under Law No. 6102 (TTK)” (“6102 Sayılı TTK'ya Göre Pay Bedelinin Ödenmemesi ve Iskat”), in Tayfun Ercan (ed.), Hukuk Alanında Güncel Meseleler, Özgür Yayınları, 2023, pp. 1–56, in particular pp. 25–28 and 41–47. DOI:10.58830/ozgur.pub78.c419.
- Law No. 6325 on Mediation in Legal Disputes (6325 sayılı Hukuk Uyuşmazlıklarında Arabuluculuk Kanunu), Arts. 1 and 18/A. Current text of the law.