With the Presidential Decree No. 7887 published in the Official Gazette dated November 25, 2023 and numbered 32380, the minimum capital amounts for joint stock and limited liability companies have been increased and accordingly, effective from January 1, 2024, the new minimum capital amounts have been determined as TRY 50,000 for limited liability companies, TRY 250,000 for joint stock companies and TRY 500,000 for joint stock companies that have adopted the registered capital system and are not publicly traded. Our previous article on this update can be found here.
With the announcement made by the Ministry of Trade regarding this new regulation, it was stated that the new minimum capital amounts are valid for companies to be newly established as of January 1, 2024 and at this stage, there is no need for existing capital companies to increase their capital in order to comply with the new regulation.
However, in order to ensure uniformity in the implementation of the relevant amendment by trade registry directorates, a circular ("Circular") on "Minimum Capital" was prepared by the General Directorate of Domestic Trade of the Ministry of Trade and communicated to trade registries.
Pursuant to the Circular, it is stated that, as of January 1, 2024, in certain registration procedures, it should be considered that the capital amounts of existing companies should not be below the new minimum capital amounts. Accordingly;
- The capital of newly established companies should not be below the new minimum capital amounts.
- In case of capital increase by existing companies, the new capital should not be less than the new minimum capital amounts.
- If a capital decrease is to be made in a partial spin-off, the capital of the demerged company should not be less than the new minimum capital amounts.
- In case of a change in the company type, the capital of the new type should not be less than the new minimum capital amounts.
- In the calculations to be made within the scope of Article 376 of the Turkish Commercial Code regarding the company’s capital and the loss of legal reserves, the registered capital of the company should be taken as a basis. However, the new minimum capital amounts should be considered in the transactions to be made in cases where remedies are required.
- Pursuant to the provisions of the Turkish Commercial Code, a three-month period was granted for companies that had not increased their capital for any reason until February 14, 2014, and the registration records of companies that did not increase their capital within this period were deleted. In the event that these deregistered companies wish to continue their activities and wish to re-establish their registrations within this scope, it is expressly regulated that capital increase requests will not be registered unless there is an explicit court decision stating that capital increases may be made by these companies.
It is important to comply with the above issues in terms of the transactions listed in the Circular, and companies established before January 1, 2024 and whose capital is below the new minimum capital amounts will be able to perform all registration procedures (except for the transactions listed above) without the need to increase their capital.