Liquidation in Turkey
The company may be dissolved on the basis of the legal grounds for termination set out under the applicable legislation and/or pursuant to a resolution adopted by its shareholders. Once the dissolution decision becomes effective, the company does not immediately cease to exist; instead, it enters into the liquidation phase. This status must be registered with the relevant trade registry directorate and announced accordingly. From that point onward, the company’s trade name is used together with the phrase “in liquidation,” indicating that the company continues to exist only for the purposes of completing the liquidation process.
The main objective of liquidation is to wind up the company’s affairs in an orderly manner. In this respect, the company’s assets are identified and, where necessary, sold; its receivables are collected; its debts and liabilities are paid; and any pending transactions or unfinished business are completed to the extent required for liquidation. During this period, the company may not carry out new commercial activities unrelated to the liquidation purpose.
The liquidation process is managed by liquidation officers. At least one of the liquidation officers must be a Turkish citizen and resident in Türkiye. These officers may be appointed either by the articles of association or by a resolution of the general assembly. Their appointment, powers and any changes regarding their authority must be registered and announced in the trade registry.
Known creditors are notified of the liquidation by registered letter. Creditors who are not known to the company are invited through three announcements published in the Turkish Trade Registry Gazette, on the company’s website, and, where applicable, in the manner prescribed by the articles of association. These announcements serve to inform creditors that the company is in liquidation and to invite them to submit their claims.
The liquidation officers are also responsible for preparing the necessary financial statements during the liquidation period. They prepare annual financial statements at the end of each financial year and, upon completion of the liquidation, submit a final balance sheet to the general assembly. These documents show the financial position of the company and the results of the liquidation process.
After the company’s debts have been paid and the shareholders’ capital contributions have been returned, any remaining assets are distributed among the shareholders. Unless otherwise provided in the articles of association, such distribution is made in proportion to the shareholders’ paid-in capital and any privilege rights attached to their shares. If the articles of association contain special provisions regarding liquidation shares or privileged distribution rights, those provisions will apply.
The remaining assets may not be distributed before six months have elapsed from the date of the third announcement made to creditors. This waiting period is intended to protect creditors by allowing sufficient time for claims to be submitted. Once all liquidation steps have been completed, the liquidation officers apply to the relevant trade registry directorate for the deletion of the company’s trade name from the registry. Upon such deletion, the company’s legal personality comes to an end.
In the event of bankruptcy, the liquidation is not carried out by the company’s liquidation officers. Instead, the process is conducted by the bankruptcy administration in accordance with the Enforcement and Bankruptcy Law.