Limited or joint stock? A pre-formation comparison

The two company types compared in terms of capital, share transfer, liability for public debts and management structure.

Both company types are subject to corporate income tax at the same rate. The difference lies in capital, share transfer and the personal liability of the shareholders.

Capital

The minimum capital is 50,000 TL for limited companies and 250,000 TL for joint stock companies. For small and medium-sized businesses, a limited company is generally more suitable in terms of formation cost.

Liability for public debts

Shareholders of a limited company are liable for public receivables that cannot be collected from the company in proportion to their capital shares (Law No. 6183, Article 35). In a joint stock company, shareholders are not held liable in this way; liability is directed at the legal representatives (Law No. 6183, Article 10/A). For investors in a company with more than one shareholder who will not take part in management, this difference is decisive.

Share transfer

In a limited company, a share transfer requires a notarised written agreement, general assembly approval and registration with the trade registry. In a joint stock company, share transfers can be handled more flexibly, depending on the articles of association. For this reason, a joint stock company is preferred for ventures where investors are expected to join or exit.

Quick comparison

If there is an existing sole proprietorship, the option of a tax-free change of legal form under Turkish Commercial Code (TTK) Articles 180–193 should also be considered. For details, see the company formation in Bursa page.