Joint Stock (JSC) vs Limited Liability (LLC) in Türkiye

Informative note: This post is for general information only and does not constitute legal advice.

1. JSC vs LLC in Turkey — What Actually Differs?

Choosing between Joint Stock Company (Anonim Sirket) and Limited Liability Company (Limited Sirket) comes down to growth plans, governance style, and how easily you want ownership to move.

2. Quick Comparison

Topic	JSC (Anonim Şirket)	LLC (Limited Şirket)
Minimum capital	TRY 250,000 minimum. If a non-public JSC adopts the registered capital system: TRY 500,000 initial.	TRY 50,000 minimum.
Shareholders	Can be formed by one shareholder; no statutory maximum.	Can be formed by one shareholder; (practically) up to 50 is common.
Management	Board of Directors.	Manager/Managers.
Share transfer	Generally freer transfer of registered shares (AoA may restrict). Bearer shares require MKK registry notification. No notary requirement by default in typical registered-share transfers.	Notarized written agreement + often general assembly approval; then registry/ledger updates (TCC Art. 595 practice).
Public markets	IPO/Capital markets possible (subject to Capital Markets rules).	No IPO as an LLC.
MERSIS & registry	Online filing via MERSIS; finalized at Trade Registry Directorate; announcements in Turkish Trade Registry Gazette.	Same rails: MERSIS → Registry → Gazette.
Tax & e-systems	After registration: tax activation; e-Invoice/e-Archive/e-Ledger via GİB portals.	Same.

Why investors pick JSC: easier future share liquidity, structured board governance, and potential capital markets path. Why teams pick LLC: simpler day-to-day governance and tighter control on share transfers (by design).

3. How To Choose

• Need share mobility or future fundraising/IPO? → JSC. More flexible share mechanics; capital markets path exists (subject to SPK rules).

• Prefer close control on ownership changes? → LLC. Notarization and approvals make transfers more controlled.

• Either way: you’ll run on the same rails — MERSIS online filing, registry, and Gazette publication.

4. FAQ

• We’ll raise VC later—should we start as an LLC and switch to JSC?You can convert an LLC to a JSC later, but it adds time, filings, and costs. If share mobility and investor rounds are likely, starting as JSC avoids a future conversion.

• Can employees get equity more easily in a JSC?Usually yes. JSC structures (share classes, vesting via share/option mechanics) tend to be more flexible than LLC quotas, which often require notary/approvals on transfer.

• We want tight control over who becomes a shareholder—LLC or JSC?LLC by design: transfers typically require notarization and often general assembly approval. JSC transfers are generally easier (AoA can still add restrictions).

• Is a “single-shareholder” company okay in Türkiye?Yes—both JSC and LLC can be formed by one shareholder. The governance bodies differ (board vs managers), but single-owner setups are allowed.

• We might pursue an IPO—does that force JSC?Practically yes. Public offerings and capital-markets routes run through JSC structures, subject to capital markets regulations.

• Will a foreign owner face different rules choosing JSC vs LLC?Core company-law rails are the same (national treatment). The choice is still about capital, governance, and share transfer—not nationality.

• Which form is faster to transfer ownership in?Typically JSC. Registered shares move with fewer formalities; LLC transfers go through notary and often approvals.

• We hate paperwork—what’s the “lighter” governance?Day-to-day, LLC can feel lighter (managers vs board). But if you expect many shareholder changes, JSC may be “lighter” at transfer time.

• What’s the catch with bearer shares in a JSC?They’re not anonymous in practice: beneficial ownership reporting/registry obligations apply (e.g., MKK notifications). Don’t pick bearer shares for secrecy.

• Can we have different rights for different investors (vetoes, preferences)?Easier in a JSC using share classes/AoA provisions. In an LLC, protections exist but are less market-standard for complex cap tables.

• We’ll distribute profits every year—any difference?Both can distribute dividends per law/AoA. JSC practice around reserves and decision flow is more standardized; LLC is simpler but transfers are tighter.

• Who carries more personal risk—board in JSC or managers in LLC?Both have duties; LLC managers can face specific exposures on public law debts in some cases. Pick governance with responsibilities in mind—not just titles.

• Can we run with a very small capital and add later?Legally you must meet minimum capital (JSC/LLC). You can increase later, but banks, counterparties, and regulators may judge adequacy by your activity, not the legal minimum.

• We’ll bring in strategic partners from time to time—what fits better?If partners rotate or invest frequently, JSC typically fits better. If you want a closed club with deliberate gates, LLC fits.

• What if founders deadlock? Which form handles it better?Deadlock is a drafting problem more than a form problem. JSC lets you engineer board/share mechanics; LLC can too, but tools are narrower—solve it in the AoA/shareholders’ agreement.

• Can we convert between forms later without starting over?Yes, type conversion is possible (LLC↔JSC) via statutory procedures, but expect time, filings, and advisor fees. It’s not a one-click switch.

• Bank account + KYC: does the form matter?Not usually—the bank’s KYC policy matters more (local signatory / in-person visit often speeds things up). Choose form for governance, not for KYC.

• We plan ESOP/VSOP—any preference?JSC generally plays nicer with option-style incentives. You can mimic incentives in LLC, but it’s less standard and more formal at transfer.

• Any tax difference just because it’s JSC or LLC?Both are capital companies taxed at corporate level; differences typically come from specific transactions and withholding mechanics, not the label alone. Get tax advice on your flows.

• We want to stay private forever—still okay to choose JSC?Absolutely. Many non-public JSCs exist. You don’t need public status to enjoy JSC transfer flexibility and governance structure.

5. Closing Note

   
   

Pick the form that matches your governance style and capital plan. If you expect ownership changes or a capital-markets horizon, JSC tends to fit. For close-held, operational setups with deliberate transfer control, LLC is often enough — and simpler to run.

Written by Merih Okuyaz (Istanbul Bar Association).

Informational only; not constitutes legal advice.

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