Management and Representation in a Turkish Limited Company: TCC Articles 623 and 629 for Foreign Investors

1. Ownership, management, internal approval and external signature are different

Foreign investors often assume that the shareholder who owns the company can sign every contract automatically. Turkish limited-company law separates the equity interest from management office and representation.

A shareholder can be passive. A third-party professional can be a manager. Internal company rules can require approval before transactions even where a registered manager can bind the company externally.

Governance documents should state these layers clearly.

2. The company agreement is the starting governance document

Article 623 requires the articles to regulate management and representation. The articles can allocate management among shareholders or third persons within statutory limits.

Foreign investors should not rely on a shareholders’ agreement alone because third-party effect and registry authority depend on Turkish company-law documents.

The current registered articles should match the intended governance model.

3. Managers can be shareholders or third persons

A limited company can appoint one or more managers. Management can therefore be professionalised rather than tied to ownership.

The company should define whether managers act individually or collectively and what internal decisions require joint approval.

Appointment acceptance and registry formalities should be completed promptly.

4. At least one shareholder must have management and representation authority

Article 623 preserves a shareholder-management connection by requiring at least one shareholder to have management and representation authority.

A foreign investor using only external professional managers should therefore structure the board of managers carefully.

The shareholder manager can coexist with other managers and joint-signature arrangements.

5. A foreign national can serve as manager

Foreign nationality does not generally prevent appointment as manager, subject to sector rules and immigration/work-authorisation requirements.

The manager needs Turkish-use identity, tax/foreigner number and registry documents as required.

Appointment as manager does not itself grant immigration residence or work rights.

6. Representation authority determines who can bind the company externally

External representation affects contracts with banks, suppliers, customers, employees and public authorities. The trade registry provides critical public information about who can sign.

Counterparties should verify registered authority before relying on a signature.

The company should avoid informal “everyone knows he is the owner” practices.

7. Internal approval rules do not always limit third-party effect

The company can require manager approval, shareholder consent or monetary thresholds internally. Breaching an internal rule can create manager liability.

But internal restrictions cannot always be asserted against a good-faith third party where registered external authority permitted the act.

Investors should design external signature limits and internal controls together.

8. Joint-signature structures can reduce single-person risk

Companies can use joint representation where law and registry permit. Requiring two managers to sign can protect against unilateral high-value transactions.

Operational practicality should be considered: if both authorised persons live in different countries, routine transactions can be delayed.

Digital signature and banking systems should be aligned with the corporate rule.

9. Not every internal limit is registrable against third parties

A rule such as “manager may not spend more than EUR 20,000” can be useful internally but may not always operate as an external limitation against third parties.

Representation can instead be structured through joint signature or branch/location authority within the statutory framework.

Legal design should focus on enforceable public authority rather than private expectations.

10. Trade-registry records should be treated as a live risk-control system

Appointments, removals and representation changes should be registered and announced as required.

Outdated records can allow a former manager to appear authorised to banks or counterparties.

Corporate secretarial controls should include periodic registry verification.

11. Bank signature authority should mirror company authority

Banks usually require current trade-registry documents and signature specimens. Changing a manager without updating bank mandates leaves operational exposure.

Online banking users, payment limits and approval workflows should also be reviewed.

Ownership of the company alone does not entitle a shareholder to operate the company’s bank account.

12. Managers can issue powers of attorney within their authority

A company can authorise lawyers, accountants or commercial representatives through powers of attorney. The issuing manager must have authority for the act.

High-risk transactions such as property sale or litigation settlement can require special powers.

Powers should be revoked and banks/counterparties notified when no longer needed.

13. Management appointment and work authorisation are separate

A foreign manager who actively works in Türkiye should be assessed under Law No. 6735. Corporate appointment does not automatically create a work-permit exemption.

Passive foreign shareholders have a different position from working managers.

Our Turkey Work Permit 2026 guide explains the labour-authorisation framework.

14. Representation authority carries statutory responsibility

Managers owe duties under Articles 626 and related provisions. A manager who signs an unlawful transaction can face company-law liability even where the signature was externally effective.

Authority therefore should not be accepted as a ceremonial title.

Our manager liability guide explains the damages framework.

15. Manager authority can be removed or restricted

The general assembly and, in just-cause situations, the court can intervene under Article 630.

Registry and bank updates should follow immediately after a change.

Our Article 630 removal guide explains that remedy.

16. A foreign parent company should not govern the Turkish Ltd only through informal instructions

Group headquarters can set budgets and policies, but Turkish corporate decisions must still be made through the company’s valid organs and records.

A manager who blindly follows a parent instruction that harms the Turkish company can face loyalty issues.

Reserved matters should be written into enforceable governance documents rather than handled only by email.

17. Good governance requires a complete authority file

The company should maintain current articles, manager appointments, signature authority, internal directives, powers of attorney, bank mandates and key approval resolutions.

Foreign investors should receive copies and translations sufficient to understand who can act.

Bakırcı & Keskin Hukuk Bürosu has physical offices in Istanbul and Mersin. Corporate work throughout Türkiye can be coordinated from these offices subject to registry and procedural rules.

Conclusion

Articles 623 and 629 make Turkish limited-company governance a legal authority system, not an ownership shortcut. Foreign investors should align share ownership, manager appointments, external signature powers, internal approvals and bank mandates. Clear governance prevents unauthorised transactions and makes later liability or removal disputes much easier to resolve.