The first and most important decision for every entrepreneur stepping into the commercial world is to correctly determine the type of company to establish. The two most commonly preferred capital company types in Turkey are the Limited Liability Company (LTD) and the Joint Stock Company (A.Ş.). Although the establishment processes for both consist of similar steps, there are critical differences between them regarding shareholder liability, capital structure, and ease of share transfer. This decision directly affects your business’s future growth potential, flexibility, and legal obligations. In this article, we summarize the basic steps of company formation and compare the differences between LTD and A.Ş. to help you make the right decision.

General Company Formation Steps

 

Regardless of the company type, the establishment process is initiated via the Ministry of Trade’s MERSIS (Central Registry System) platform and includes the following basic steps:

  1. Preparation of Articles of Association: In this document, which is the “constitution” of the company; basic information such as the company’s title, headquarters, field of activity, capital amount, shareholders’ shares, and management bodies are included.

  2. Application via MERSIS: The prepared articles of association are entered into MERSIS, a potential tax number is obtained via the system, and sent for approval.

  3. Notarization of Documents: Documents such as the articles of association and signature circulars approved from MERSIS are certified by a notary.

  4. Depositing Capital to the Bank: At least 25% of the committed capital must be blocked in a bank account opened in the name of the company to be established.

  5. Registration with Trade Registry: An application for registration is made to the Trade Registry Directorate where the company’s headquarters is located with all documents. With registration, the company is legally established.

  6. Tax Office Registration and Other Legal Procedures: Following registration, the tax plate is obtained, legal books are certified, and registration with relevant chambers (Chamber of Commerce, Chamber of Industry, etc.) is performed.

Key Differences Between Limited Company (LTD) and Joint Stock Company (A.Ş.)

 

Knowing these differences is crucial for choosing the right company type.

Feature Limited Company (LTD) Joint Stock Company (A.Ş.)
Number of Shareholders Minimum 1, maximum 50 shareholders. Minimum 1 shareholder, no upper limit.
Minimum Capital 50,000 TL. (Check the current amount for 2025) 250,000 TL. (Check the current amount for 2025)
Shareholder Liability Most Critical Difference: Shareholders are liable for the company’s public debts (Tax and SSI) with all their personal assets in proportion to their capital share. Shareholders’ liability is limited only to the capital amount they committed. They are not liable with their personal assets for the company’s debts.
Share Transfer Difficult. It must be done in the presence of a notary, requires general assembly approval, and must be registered in the trade registry. This is costly and time-consuming. Easy. If share certificates are printed, they can be transferred simply by endorsement and delivery. No notary or registration obligation. This flexibility makes it easier to find investors.
Management Managed by a “Manager” or “Board of Managers.” One of the partners can be the manager. It has more corporate and rigid bodies like the “Board of Directors” and “General Assembly.”
Going Public (IPO) Cannot be offered to the public and its shares cannot be traded on the stock exchange. Can be offered to the public. Growth and capital finding potential is higher.

Which Company Type is More Suitable for You?

 

  • Limited Company (LTD): More suitable for small and medium-sized enterprises (SMEs), family businesses, or structures with few partners. Establishment cost is lower, but the partners’ personal liability for public debts is the most significant disadvantage.

  • Joint Stock Company (A.Ş.): Ideal for businesses with big goals, planning to take investors in the future or to go public, and high-capital businesses. Its biggest advantage is providing full debt protection for partners and offering a more prestigious image.

Conclusion

Choosing a company type is directly related to your business vision, partnership structure, and risk appetite. Since the establishment process involves many technical and legal details, getting professional support from a financial advisor (CPA) and a commercial law lawyer before taking this important step will ensure you prevent potential problems from the very beginning.

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