Stock corporations are basically divided into two as Joint Stock Company and Limited Liability Company. Parties intending to establish a company prefer joint stock companies due to the facts that there are incentives subject to legal regulations as well as the authority to issue bonds; that company stocks are not subject to income tax; that shareholders do not have any obligation for debts except for capital subscription.
What is a joint stock company?
A joint stock company is company type whose capital has been determined and divided into certain shares, and which is only limited to the capital subscription due to owned debts. Joint stock companies are managed and represented by boards of directors. Joint stock companies can be taken to the public, and their shares can be offered to the public.
Properties of Joint Stock Companies
There are established for every kind of commercial and economic purposes which are legally allowed. Objective of the company should be stated clearly.
The company should be established under a trade name, which should be registered in trade registry and be related to the subject to commercial activity.
For joint stock companies, one or more legal or natural entities are required as shareholder. It is possible for one person to establish a joint stock company.
Can foreigners establish companies in Turkey?
Foreigners can establish companies in Turkey. There is Law no. 4875 on Direct Foreign Investors in Turkey with relation to foreign investors. In this law, liberty of investment, equal treatment and promotion of foreign investors have been adopted in general terms. Moreover, foreign investors have been granted certain assurances.
Before transactions for official application, the foreigners should carry out preliminary work with relation to company establishment. Type of the company should be determined, main contract should be prepared on the basis of activity field, and physical needs should be met.
Whole process should be followed with the help of a lawyer, because most of the legal problems confronted by companies established by foreigners result from the mistakes made during the stage of establishment.
Articles of association should be prepared after certain negotiations. When such process is completed, the procedure to be applied is as follows: