In Turkey, two significant legal amendments have been made that profoundly affect the financial and legal structures of companies. The first is the increase in the minimum capital requirements for joint-stock and limited liability companies, and the second is the mandatory requirement for certain joint-stock companies to employ a lawyer. These changes introduce new obligations and opportunities for the business world.
New Minimum Capital Requirements
As per the Presidential Decree (Decision Number: 7887) effective from November 24, 2023, the minimum capital for joint-stock companies has been raised from 50,000 TL to 250,000 TL, and for limited liability companies from 10,000 TL to 50,000 TL. This amendment, in line with Articles 332 and 580 of the Turkish Commercial Code (Law No. 6102), will apply to companies established from January 1, 2024, onwards.
Mandatory Legal Counsel Requirement
Under Article 35, paragraph 3 of the Attorneyship Law and Article 272 of the Turkish Commercial Code, joint-stock companies with a capital of 250,000 TL and above are now required to employ a contractual lawyer. Additionally, companies with a capital exceeding five times this limit, i.e., 1,250,000 TL, are also subject to this requirement.
Impact on Existing Companies
These regulations not only affect newly established companies but also have significant implications for existing ones. Companies need to review and possibly update their capital structures and legal advisory services in light of these new limits. Strengthening capital structures and ensuring effective legal support are now essential parts of strategic planning for companies.
The Importance of Capital Increase and Legal Support
Increasing capital enhances a company’s potential for growth and development, while the obligation to employ a lawyer ensures stronger positioning in legal processes and advisory services. Therefore, it is imperative for existing companies to comply with these new regulations, as doing so will enhance their competitive edge and minimize legal risks.
Conclusion
These two amendments mark a significant turning point for the business landscape in Turkey.
Companies need to adjust both their financial structures and legal advisory services according to these new regulations. Utilizing financial and legal consulting services for accurate planning is crucial for companies.
These strategic decisions will pave the way for long-term success in the ever-evolving corporate world.
