LIMITED LIABILITY COMPANY (Ltd. Şti.) TTK m.573: Limited şirket bir veya daha çok gerçek veya tüzel kişi tarafından bir ticaret unvanı altında kurulur; esas sermayesi belirli olup, bu sermaye paylarının toplamından oluşur. Ortaklar şirket borçlarından sorumlu olmayıp, sadece taahhüt ettikleri esas sermaye paylarını ödemekle ve şirket sözleşmesinde öngörülen ek ödeme ve yan edim yükümlülüklerini getirmekle yükümlüdürler.

Limited şirket kanunen yasak olmayan her türlü ekonomik amaç ve konu için kurulabilir.

Like stock company, limited liability company (Llc) is also a capital company. Capital: The capital is predetermined (fixed), and must be at least TL. This capital is divided into shares. Unlike stock corporations, the Llc can not issue stock certificates representing the shares. Shareholders have share interest. Personal services or work cannot be contributed as capital. The minimum of a share must be 25 TL.

The formation of a limited liability company is similar to stock corporation. The founders prepare and sign partnership agreement and notary authenticates their signatures. The partnership acquires legal personality upon registration in the commercial registry.

LIMITED LIABILITY COMPANY (Ltd. Şti.) Number of shareholders: Minimum 1, and maximum 50 persons (real/legal). Purpose and subject matter: Any commercial activity (except some activities that reserved only for stock companies like banking, insurance, and leasing etc). It must be indicated in the articles of incorporation, as well as in the firm name.

Management: Llc is managed (internal reletionship) and represented (external relationship) by the directors. In the articles of incorporation names and nationality of directors must be shown. Directors can also be appointed among the non-shareholders. But at least one director must be shareholder. Their signatures, on behalf of the company, are required on any document to which the company is supposed to be a signatory.

Liability of the shareholders: It is limited to their capital contribution. This rule can not be applied when there is a public obligation. Article 35 of the Code Regarding Collection of State Receivables (Amme Alacaklarının Tahsil Usulü Hakkında Kanun) states that shareholders are responsible for their company’s debts to the State for a percantage of unpaid taxes equal to his percentage of shares. To be able to apply shareholder, the company must be unable to pay the debt.

General assembly: Ordinary general assembly convene once each year, within 3 months following the end of fiscal year. Extra ordinary meetings are held when it is necessary. Written consents in lieu of meeting are permitted.

Right of receiving information TCC art 614 states that each partner can ask information about all the company’s works and accounts from directors and each partner can make an inspection about the works of the company. The directors can refuse the application of information if there is a possibility of using these information against company.

Right of Resign (Çıkma hakkı) TCC art.638. In the company agreement, right of resign can be regulated. It can be subject to some conditions. Each partner can apply to court to for court decision of resign when there is just grounds

Dismissal of a partner TCC art.640. In the company agrement provisions related to dismissal can be regulated. The partner who is dismissed by general assembly, can bring an action for nullity.

LIMITED LIABILITY COMPANY (Ltd. Şti.) Transferability of shares: Rule: Share interest in the Llc is transferable. Exceptions: Transfer of share interest is not valid against the company, unless it has been notified to the company and registered in the share book of the company. For registration the consent of the shareholders is required. In genereal assembly transfer can be dismissed.

LIMITED LIABILITY COMPANY (Ltd. Şti.) The free transfer of share interests can be rectricted or even forbidden by the charter. Agreements on share transfer must be in writing, and the signatures must be authenticated by the public notary.

Dissolution any reason set forth in the articles of corporation Decision of general assembly Bankruptcy A court order based on just ground, upon the request of a shareholder *Upon termination, a limited company is liquidated and deregistered.

A limited liability corporation is ideal for medium-size family business, as the internal organization is relatively simple and the liability of the share interest holders is limited.

What are the main differences between a limited liability company and a corporation?