Limited or joint-stock company: which suits a startup in Türkiye?

One of the first questions when incorporating a startup is which company type to choose. In Türkiye, technology startups are usually set up as a limited company (limited şirket) or a joint-stock company (anonim şirket). Both are governed by the Turkish Commercial Code and shareholders' liability is generally limited to their capital, but important differences appear once you raise investment.

Key differences

Share transfers

• Limited company: transfers must be in writing with notarised signatures and, as a rule, require approval by the general assembly. Each transfer is registered with the trade registry. This becomes heavy when shareholders change often.
• Joint-stock company: transfers are more flexible; unless restricted by the articles, shares change hands relatively easily, making investor entries and later rounds more practical.

Number of shareholders

A limited company may have at most fifty shareholders by law. A joint-stock company has no such cap, which matters for employee share plans and multi-shareholder structures such as equity crowdfunding.

Capital

Minimum capital for both types is set by presidential decree and updated from time to time; the joint-stock minimum is higher. Confirm current amounts with the trade registry or your accountant before incorporating.

Management

A limited company is run by one or more managers, a joint-stock company by a board of directors. Giving investors board seats and creating preferred share classes is more common and practical in a joint-stock company.

Cost and administration

A limited company is usually simpler and cheaper to set up and run. A joint-stock company brings more formalities such as general assembly and board resolutions and, in some cases, independent audit.

Which fits when?

• At idea or MVP stage with no plans to raise soon, a limited company can make sense on cost.
• If you will raise from angels or funds soon, a joint-stock company makes the process easier. Many investors require conversion before investing.
• If you plan an employee share plan, a joint-stock company is a better base; see our ESOP guide.

Converting from limited to joint-stock

A limited company can be converted into a joint-stock company. It requires a general assembly resolution, valuation and registration and can take a few weeks. Doing it before investor talks start keeps the round on schedule.

Pre-incorporation checklist

1. Is the founders' equity split and vesting in writing? See our founders' agreement guide.
2. Will the company be set up in a technopark? See our technopark guide.
3. Is the transfer of intellectual property to the company planned?
4. Have you checked current rules with an accountant and a lawyer?

This guide is general information; get advice from an accountant and a lawyer before choosing a company type.