Differences between a Joint Stock Company and a Limited Liability Company

The following are some of the more important differences between a Joint Stock Company and a Limited Liability Company under Turkish laws : 

• The minimum number of shareholders required is five for A Joint Stock Company and two for A limited Liability Company. A limited Liability Company may not have more than fifty shareholders, but no such maximum applies to A Joint Stock Company. Neither A Joint Stock Company nor a limited Liability Company require any Turkish shareholders (i.e., they may be 100% foreign-owned).

• The minimum capital required for a limited Liability Company is 5.000 Turkish opposed to 50.000 Turkish for Joint Stock Companies.

• A Joint Stock Company is managed by its board of directors. A limited Liability Company does not have a board of directors but is managed instead by its general manager and its shareholders. All authorities of the shareholders relating to the management of a limited Liability Company may be granted to a general manager or one of the shareholders.

• In some circumstances, such Joint Stock Company the amendment of the articles of association, the Turkish Commercial Code offers Limited Liability Company minority shareholders more protection then Joint Stock Company minority shareholders. However, similar protection may be provided for in the articles of association of a Joint Stock Company.

• If a shareholder of a Limited Liability Company becomes bankrupt, the Turkish bankruptcy authorities or a creditor of such shareholder which has attached such shareholder's shares may, with six months' prior notice, start liquidation proceedings against the Limited Liability Company unless the debt of the bankrupt shareholder is discharged by the other shareholders of the Limited Liability Company or unless the shares of the bankrupt shareholder in the Limited Liability Company are transferred to the other shareholders or third parties.

• Limited Liability Company shareholders, unlike Joint Stock Company shareholders, may be liable for amounts owed by the Limited Liability Company to government authorities for taxes, duties and charges without any limitation with proportion to their capital contribution if the company cannot make the required payments (i.e., their liability in this respect is not limited to their own capital contribution).

• The shares of a limited Liability Company, unlike those of A Joint Stock Company, cannot be represented by negotiable share certificates. Any transfer of shares in a limited Liability Company must be approved by shareholders representing three quarters of the capital of the company and the transfer document must be notarized. A share transfer in A Joint Stock Company need not comply with such requirements.