Limited Company Share Transfer in Turkey to a Foreign Buyer: TCC Article 595

Quick Answer

A foreign investor buying a share in a Turkish limited company must comply with Turkish Commercial Code Article 595. The share-transfer agreement and the transaction creating the transfer obligation must be in writing, and the parties’ signatures must be notarised. Unless the articles of association provide otherwise, the transfer also requires approval of the shareholders’ general assembly and becomes valid with that approval. Unless the articles say otherwise, the general assembly may refuse approval without giving a reason; the articles can even prohibit share transfers, while the transferor’s statutory right to exit for just cause remains protected. If the general assembly does not reject the transfer within three months after the application, approval is deemed given under Article 595(7). After a valid transfer, Article 598 requires company managers to apply to the trade registry for registration of the share transition. Foreign nationality does not itself require a Turkish co-shareholder under the general foreign-investment principle, but sector-specific permissions, sanctions/compliance, competition rules, beneficial-ownership checks, tax and the company’s own articles must be reviewed before closing.

TCC Article 595: The Share Transfer Is a Formal Transaction

A Turkish limited company (limited şirket) does not use the same share-transfer mechanics as every joint-stock company. Article 595 imposes a formal written contract and notarial certification of signatures. That form requirement should be built into the transaction timetable from the beginning.

The first paragraph also requires the agreement to address specific burdens and rights attached to the share where they exist. These include additional-payment obligations, ancillary-performance obligations, expanded non-compete duties, rights of first offer, pre-emption, repurchase or purchase rights and contractual-penalty terms. A foreign buyer therefore should not sign a one-page “share sale” that states only the percentage and purchase price if the company’s constitutional documents attach further obligations to the share.

The buyer should review the current articles of association, amendments, share book, trade-registry records and any shareholders’ agreement before signing. The economic purchase and the legal transfer are connected but distinct: a buyer can agree a price yet fail to obtain valid shareholder status if the mandatory transfer steps are not completed.

For a foreign investor, Turkish-law form requirements remain relevant even when the commercial term sheet or master acquisition agreement is governed by another law. The Turkish corporate transfer must still comply with the rules applicable to the Turkish limited-company share.

What Should the Limited-Company Share Transfer Agreement Cover?

The agreement should identify the company by exact trade name, MERSİS/trade-registry information, the transferor and transferee, the nominal value and percentage of the share, the purchase price and the closing mechanics. If there are multiple share groups or privileges, the transferred rights should be identified precisely.

Article 595 requires certain share-related obligations and rights to be included where applicable. In addition, a professional acquisition agreement normally addresses representations and warranties, taxes, undisclosed liabilities, employee issues, litigation, regulatory licences, related-party balances, intellectual property, data protection, material contracts and closing deliverables.

Those contractual protections do not replace statutory due diligence. A warranty that “the company has no tax debt” gives a contractual remedy if false, but it does not prevent a public authority from pursuing liabilities under the applicable public-law rules.

Payment should be tied to legal milestones. A foreign buyer should avoid paying the entire price merely against private signatures if general-assembly approval, regulatory consent, release of a pledge or another condition must still occur. Escrow, deferred consideration or a simultaneous closing structure can reduce that risk where commercially appropriate.

General-Assembly Approval Is the Default Rule

Article 595(2) provides that, unless the articles of association state otherwise, the share transfer requires approval of the general assembly and becomes valid with that approval. This is not a cosmetic post-closing filing. Under the default statutory structure, approval is part of the validity mechanism.

Article 595(3) is equally important: unless the articles provide otherwise, the general assembly may refuse approval without stating a reason. A buyer who ignores the approval power can therefore sign a binding commercial deal and still face refusal at corporate level.

Article 595(7) prevents indefinite silence. If the general assembly does not reject the application within three months after the application is made, approval is deemed granted. The application date should therefore be provable in writing.

Approval mechanics should be reviewed against the company’s voting rules and any conflict-of-interest issues. The transfer agreement should also state what happens to the purchase price and obligations if approval is refused.

The Articles of Association Can Change the Default Transfer Regime

Article 595 expressly allows the articles of association to alter the default approval requirement and even to prohibit share transfers. A foreign investor must therefore read the registered articles instead of relying only on the Commercial Code’s default.

If the articles prohibit transfer or the general assembly refuses approval, Article 595 preserves the transferor’s right to exit the company for just cause. That is a protection for the existing shareholder, not an automatic right for the proposed buyer to force acquisition.

Where the articles impose additional-payment or ancillary-performance obligations, Article 595(6) also permits refusal if the proposed transferee’s ability to perform is doubtful and requested security is not provided, even if the articles do not separately create an approval ground.

Transfer restrictions may coexist with a shareholders’ agreement. A private agreement can create contractual obligations among its parties, but its effect should be distinguished from restrictions validly embedded in the articles and statutory corporate rules.

Share Book and Trade Registry: Articles 594 and 598

Article 594 requires the limited company to keep a share book containing the shareholders’ names and addresses, number and nominal value of shares, transfers, groups, and usufruct or pledge information. After closing, the company’s internal share records should be updated consistently with the valid transfer.

Article 598 requires the managers to apply to the trade registry for registration of share transitions. If the managers do not apply within thirty days, the outgoing shareholder may apply to have his or her name deleted in relation to those shares, after which the registry gives the company a period to identify the acquirer.

Registry records matter to third parties. Article 598 also protects the reliance of a good-faith person on the registry. A buyer should therefore not leave old ownership information unresolved after paying the price and obtaining approval.

Trade-registry practice also requires the correct corporate decisions and supporting documents. The exact filing package should be checked with the competent registry and the current MERSİS process at the time of closing.

What Extra Due Diligence Should a Foreign Buyer Perform?

Foreign-investment law generally applies the equal-treatment principle, but that does not mean every Turkish company or activity is unrestricted. Certain regulated sectors can require permissions, fit-and-proper review, ownership limits or notifications. Banking, insurance, capital markets, energy, aviation, broadcasting and other regulated activities must be checked against sector legislation.

The buyer should also confirm beneficial ownership, sanctions screening, source-of-funds requirements and bank compliance for purchase-price transfers. A lawful acquisition can still be delayed if payment documentation or corporate KYC is incomplete.

Competition-law merger-control rules must be assessed for transactions meeting the applicable thresholds and control criteria. A purchase of a small minority share may be outside merger control, while acquisition of sole or joint control over a significant business can require notification before closing.

Foreign-investment information obligations through the current investment-reporting system should also be reviewed after the ownership change. These obligations are separate from the corporate validity of the transfer itself.

For broader foreign-investment structuring, the site’s English international-client section also covers company establishment and Turkish investment procedures. The focus of this article remains the limited-company share-transfer mechanism under Article 595.

Purchase Price, Currency and Closing Conditions

The parties should state the consideration clearly and comply with any applicable Turkish rules concerning payment currency, banking channels and tax documentation. Cross-border purchase-price payments should be traceable through banking records.

A transaction can be structured with conditions precedent. Typical conditions include general-assembly approval, regulatory consent, lender consent, release of share pledges, delivery of corporate books, repayment or settlement of related-party balances and execution of management resignations or appointments.

Closing documents should be assembled as one package. The buyer should receive evidence of the notarised transfer, corporate approval, registry filing, share-book update and any agreed post-closing changes to management or signing authority.

If part of the price is retained for warranty claims, the mechanism should identify release dates, claim notices and the governing dispute-resolution clause. A vague promise to “pay the remainder later” creates avoidable enforcement risk.

Buying Shares Means Buying the Company With Its Existing Liabilities

In a share acquisition, the Turkish company continues to exist as the same legal person. Its contracts, employees, tax history, litigation, permits and debts generally remain with it. The buyer is not acquiring only selected assets; the buyer is acquiring an ownership interest in the existing corporate entity.

That is why financial, legal and tax due diligence is fundamental. Review should include corporate authority, tax inspections, social-security liabilities, public debts, employee claims, material contracts, litigation, enforcement files, real-estate titles, environmental permits, licences, intellectual property and data-protection compliance.

A limited company’s shareholders are generally protected by limited liability for ordinary company debts, but Turkish law contains special rules concerning public receivables and specific shareholder/manager liabilities. A foreign buyer should understand those rules before becoming a shareholder or manager. A separate article should address Law No. 6183 Article 35 because that issue is distinct from the private-law validity of the share transfer.

Existing personal guarantees should also be identified. A selling shareholder may have guaranteed company bank debt, while the buyer may be asked to replace or add guarantees at closing. That commercial change should be documented separately from the share transfer itself.

Document Checklist for a Foreign Share Buyer

• current articles of association and all registered amendments;
• trade-registry gazettes and MERSİS/company registry information;
• share book and evidence of current share ownership;
• share-transfer agreement complying with Article 595;
• notarial signature certification;
• general-assembly approval or evidence that approval is not required/deemed granted;
• corporate authorisations for buyer and seller entities;
• passport/corporate documents with apostille/legalisation and Turkish translation where required;
• regulatory or competition approvals if applicable;
• closing payment evidence;
• trade-registry filing and post-closing registry extract;
• updated share book and management/signature records;
• tax, social-security and material-liability due-diligence reports.

Corporate documents from abroad should be prepared for Turkish use before the closing date. See our guide to apostille and certified translation of foreign corporate documents.

Official Sources

• Mevzuat Bilgi Sistemi — Turkish Commercial Code No. 6102, Articles 593–599.
• Turkish Commercial Code No. 6102 – TBMM PDF.
• Turkish Trade Registry Gazette.

Legal Assistance for Foreign Investors

A Turkish limited-company acquisition can be managed from our Mersin office with due diligence, contract drafting, notarial coordination, corporate resolutions and registry steps handled under an appropriate power of attorney. Sector-specific approvals are checked separately where required.

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Frequently Asked Questions

1. Can a foreigner buy shares in a Turkish limited company?

Yes under the general foreign-investment framework, subject to company-law formalities and any sector-specific ownership or approval rules.

2. Does the share-transfer agreement need a notary?

Article 595(1) requires the agreement to be in writing and the parties’ signatures to be notarised.

3. Is general-assembly approval always required?

It is the statutory default under Article 595(2), but the articles of association can provide otherwise.

4. Can the general assembly refuse without a reason?

Yes, unless the articles provide otherwise, Article 595(3) permits refusal without stating a reason.

5. What if the company never responds to the transfer application?

If the general assembly does not reject within three months after the application, approval is deemed given under Article 595(7).

6. Can the articles prohibit share transfers entirely?

Yes. Article 595(4) permits a prohibition in the articles, subject to the transferor’s statutory just-cause exit protection.

7. Who registers the transfer?

Article 598 places the trade-registry application duty on the company managers.

8. Does a share purchase eliminate old company debts?

No. The company remains the same legal person, so historic liabilities remain with it unless lawfully settled or transferred under rules that permit it.

9. Should the buyer do due diligence even for a minority stake?

Yes. A minority investor can still suffer economic loss from undisclosed liabilities and needs to understand shareholder rights, restrictions and exit mechanisms.

10. Can the transaction be handled while the buyer is abroad?

Yes. Corporate and notarial steps can be coordinated through properly prepared powers of attorney and authenticated foreign corporate documents where the relevant procedure permits representation.