Types of Companies in Turkey: Differences Between Sole Proprietorship, Limited Company, and Joint Stock Company
05 June, 2025
One of the most critical decisions before starting a business in Turkey is choosing the appropriate legal company structure. This decision directly impacts your tax obligations, investment potential, management framework, and long-term growth strategy. The most common company types in Turkey are Sole Proprietorship, Limited Company (Ltd. Şti.), and Joint Stock Company (A.Ş.). So, what are the main differences between these structures, and which one is suitable for your business?
1. Sole Proprietorship
A sole proprietorship is generally preferred by small-scale businesses. The establishment process is fast and low-cost. However, its biggest disadvantage is that the owner is personally liable for all business debts with their entire assets. Taxation is based on personal income tax laws.
2. Limited Company (Ltd. Şti.)
A limited company can be established with a minimum of one and a maximum of fifty shareholders. Each shareholder’s liability is limited to the amount of capital they have committed. Compared to a sole proprietorship, it offers a more corporate structure. However, share transfers are more formal and subject to notarization and general assembly approval.
3. Joint Stock Company (A.Ş.)
Joint stock companies are especially suitable for those planning to attract investors, go public, or undertake large-scale projects. There is no upper limit on the number of shareholders. Share transfers are easier and more flexible. The minimum capital requirement is 250,000 TRY, and a professional structure governed by a board of directors is available.
Comparative Overview of Company Types
| Criteria | Sole Proprietorship | Limited Company (Ltd. Şti.) | Joint Stock Company (A.Ş.) |
|---|---|---|---|
| Establishment Period | Approximately 1–2 business days | Approximately 3–5 business days | Approximately 5–7 business days |
| Number of Partners | Single owner only | Between 1 and 50 shareholders | Minimum of 1, no upper limit |
| Liability of Owners | Unlimited personal liability for all company debts | Limited to the capital committed | Limited to the capital committed |
| Minimum Capital | No statutory minimum | 50,000 TRY | 250,000 TRY (option to adopt registered capital system) |
| Taxation | Subject to Personal Income Tax Law | Subject to Corporate Tax Law | Subject to Corporate Tax Law |
| Share Transfer | Not applicable; transfer of ownership ends the business legally | Requires notarization and general assembly approval | Written share transfer agreement suffices; no notarization required |
| Management Structure | Managed directly by the owner | Managed by one or more directors | Managed by a board of directors; professional structure possible |
| Suitability for Investment | Low (limited investor access and share transfer restrictions) | Moderate potential for investment entry | High; preferred by institutional investors |
| Audit Requirement | Not subject to audit | Subject to independent audit if specific thresholds are met | Mandatory for companies exceeding certain size thresholds |
Which Company Type Is Right for You?
- If you are planning to start a small-scale business, a sole proprietorship offers a fast and cost-effective option.
- For small to medium-sized operations seeking both flexibility and legal protection, a limited company provides a balanced structure.
- If your objective includes attracting investors, going public, or scaling significantly, a joint stock company is the most advantageous structure in the long run.
