Limited liability companies are one of the most preferred types of companies in Turkey. However, in the dynamic structure of commercial life, disputes may arise between the partners over time or a partner may want to leave the company by transferring his/her shares. In such cases, shareholder exit and share transfer transactions are subject to certain rules and procedures under the Turkish Commercial Code.
Termination of Partnership Relationship in Limited Liability Companies
In limited liability companies, it is possible for a partner to request to leave the company or to be removed by other partners. The partnership relationship can be terminated in the following ways:
Separation by Share Transfer
A shareholder may exit the company by transferring his/her shares to another person or to an existing shareholder. This is the most common and practical exit method.
Dismissal or Removal by Court Order
An exit or dismissal lawsuit may be filed for justified reasons stipulated in the articles of association. This method may be preferred for reasons such as severe incompatibility, failure to fulfill partnership obligations.
Dissolution of the Company
A partner can terminate the partnership relationship by filing a lawsuit for dissolution of the company. However, this is only applicable in exceptional cases because it requires the dissolution of the entire company.
How to Transfer Shares in Limited Liability Companies?
According to the Turkish Commercial Code, the transfer of shares in limited liability companies is subject to certain rules and is subject to stricter control compared to joint stock companies. The main purpose of this situation is to protect the trust relationship between the shareholders of the company. Therefore, share transfer transactions are not only a sales process based on an agreement between the parties, but also a structure that reflects the will of the company. Detailed steps of this process are provided below:
Preparation of Share Transfer Agreement
In order for a share transfer to be valid, a written agreement must be concluded between the parties and this agreement must be drawn up before a notary public. This agreement must contain the following basic elements:
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Clear identity information of the transferor and transferee shareholder,
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Proportion of shares transferred and total number of shares,
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The cost of the share transfer (may be free of charge),
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Rights and obligations of the parties,
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Delivery and receipt dates.
Notarization is critical for the share transfer to become official. Transfer agreements without notarization are legally invalid. In addition, in some cases, details such as whether the transferee was previously a shareholder or a foreign national should also be taken into account in the contract content. These documents constitute the official basis for subsequent registration procedures.
Approval of the Board of Shareholders
In order for the transfer of shares in limited liability companies to be valid, the share transfer agreement must be approved by the company’s shareholders’ meeting. This obligation is clearly regulated under Article 595 of the Turkish Commercial Code.
Board of partners:
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It is authorized to accept or reject share transfers.
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The rejection decision must be justified within the framework of the reasons specified in the company agreement and must not be contrary to the rules of good faith.
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The approval decision must be written and signed in the company’s decision book and archived together with the minutes of the meeting and the list of attendees.
Unless otherwise stated in the company agreement, this approval is a sine qua non condition for the transfer. Transfers made without approval are deemed invalid and rejected by the trade registry office.
Trade Registry Registration and Announcement
After the approval of the shareholders’ meeting, the share transfer must be registered with the trade registry and announced in the Turkish Trade Registry Gazette. For registration, the following documents shall be submitted to the trade registry office:
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Notarized share transfer agreement,
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Notarized copy of the decision of the board of partners,
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Identity information and shareholding rates of new shareholders,
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Current articles of association (revised if necessary),
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Registration application form and other additional documents.
Once the registration is completed, the amendment becomes officially valid. The share transfer cannot be considered complete until this stage. An unregistered share transfer is considered to have never been made in legal terms. Therefore, it is of utmost importance that the entire process is carried out duly and completely.
Matters to be Considered During Share Transfer
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The transfer price can be freely determined, but the parties should consider their tax obligations. In particular, advice should be sought in terms of fees and stamp duty.
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The articles of association may impose restrictions on the transfer of shares. For example, there may be provisions such as prohibition of sale to certain persons or pre-emption rights.
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Since the transfer of shares changes the shareholding structure of the company, the responsibilities of the new shareholders should also be taken into consideration.
In share transfer transactions, we carry out the entire process on behalf of our clients, from the preparation of the contract to the registration stage, and we identify potential disputes in advance and proceed solution-oriented.
Is it Necessary to File a Lawsuit in Case of Partner Exit?
In some cases, the transfer of shares may not be possible by consensus. If some of the shareholders do not give their consent or if there is a serious disagreement between the parties, a shareholder exit or dismissal lawsuit may be filed in accordance with the company agreement and the TCC. In such cases:
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The partner can request to leave by presenting justified reasons to the court.
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Other partners can request the expulsion of a partner for damaging behavior.
Given the complexity of such legal processes, working with a specialized lawyer is of great importance for the healthy management of the process.
Shareholder exit and share transfer in limited liability companies can be completed without damaging commercial relations when carried out correctly. However, this process should be carried out in a way to protect the interests of the parties and comply with the Turkish Commercial Code.
Contact Us
If you are planning to transfer your shares or exit from the partnership, you can use this information to learn about your legal rights and to carry out the process with confidence.
you can contact us. As Attorney Atakan Ayhan, we meticulously carry out all legal procedures in share transfer and shareholder exit processes in limited liability companies; we both protect the peace within the company and complete the official procedures in full.
