Company Type Conversion in Türkiye: 2026 Definitive Guide

As business operations expand, investment structures evolve, or regulatory priorities shift, many companies in Türkiye reach a point where their existing legal form no longer serves their strategic objectives. One of the most effective structural solutions is company type conversion, particularly between a Limited Liability Company (Limited Şirket – LLC) and a Joint Stock Company (Anonim Şirket – JSC).

Under the Turkish Commercial Code (TCC), company type conversion is a well-established legal mechanism that allows continuity of the same legal entity while changing its corporate form. Our corporate lawyers team explains company type conversion in Türkiye, the legal requirements, tax implications, timelines, and common pitfalls foreign and local investors should consider.

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At Finlexia Turkish Accounting Firm, we have been the cornerstone of Turkish company formation and corporate law since 2017. As we look toward 2026, understanding the legal nuances of “Type Change” (Tür Değişikliği) under the Turkish Commercial Code (TCC) is essential for maintaining a competitive edge.

Why Consider a Company Conversion in 2026?

The decision to transition between an Anonim Şirket (JSC) and a Limited Şirket (LLC) is rarely just administrative; it is strategic.

• From LLC to JSC: Often driven by the desire for an Initial Public Offering (IPO), easier transfer of shares without notary requirements, and limited personal liability for public debts (like taxes).
• From JSC to LLC: Usually motivated by a desire for a more flexible management structure and lower mandatory administrative costs for smaller, closely-held businesses.

Legal Framework: The Turkish Commercial Code (TCC)

The conversion process is governed strictly by Articles 180 to 190 of the TCC. The law views this not as a liquidation of the old company, but as a “transformation” where the entity maintains its legal continuity. All rights, assets, and liabilities transfer automatically to the new structure.

Key Requirements for Conversion

1. Continuity of Participation: Shareholders must maintain their rights and shares in the new company proportionate to their previous holdings.
2. Asset Protection: A specialized report must prove that the company’s capital is intact and not lost.
3. Governance Compliance: The new articles of association must meet the rigorous standards of corporate governance expected in the Turkish jurisdiction.

Step-by-Step Process: How to Convert Your Company Type

Converting a company in Türkiye is a multi-layered legal procedure that requires precision. Mistakes in the early stages can lead to delays at the Trade Registry or unexpected tax liabilities.

1. Preparation of the Financial Statements

Before any legal filings, the company must prepare a balance sheet and income statement. If more than six months have passed since the last balance sheet, a new interim balance sheet is mandatory to reflect the current financial health accurately.

2. The Conversion Plan

The board of directors (for JSCs) or managers (for LLCs) must draft a written “Company Type Conversion Plan.” This document outlines:

• The trade name and headquarters of the company before and after conversion.
• The new Articles of Association.
• The number and value of shares shareholders will hold after the change.

3. The Conversion Report

This is a comprehensive report explaining the legal and economic reasons for the transition. It must detail how the shareholders’ rights will be preserved. At Akkas & Associates, we often assist in contract drafting during this stage to ensure the new Articles of Association are future-proofed against potential disputes.

4. Expert Examination and Audit

A certified public accountant (SMMM) or a sworn-in financial advisor (YMM) must verify that the company’s equity is sufficient. If the company is subject to independent auditing, the auditor must also provide a report. This prevents “empty shell” conversions that could defraud creditors.

5. Approval by the General Assembly

The conversion must be approved by the shareholders. The quorum requirements differ:

• LLC to JSC: Approval by shareholders representing at least three-quarters of the total capital.
• JSC to LLC: Approval by shareholders representing at least two-thirds of the total capital.

6. Registration and Announcement

Once approved, the conversion is registered with the relevant Trade Registry Office and published in the Turkish Trade Registry Gazette. Only after this official announcement does the company legally operate under its new type.

Comparing the Two Pillars: LLC vs. JSC

To make an informed decision for 2026, businesses must understand the fundamental differences that persist even after the company type conversion.

Strategic Implications: M&A and Litigation

Changing your company type often serves as a precursor to larger moves. For instance, if you are preparing for mergers and acquisitions, converting to a JSC is almost always preferred by international investors due to the ease of share turnover and the sophisticated governance structure.

Conversely, failure to follow the conversion procedure correctly can lead to corporate litigation. Dissenting shareholders may challenge the conversion if they feel their rights were diluted or if the valuation of assets was improperly handled. Having a legal partner ensure every document is “bulletproof” is the best defense against future lawsuits.

Tax Considerations and Exemptions

One of the most significant advantages of “Type Change” in Türkiye is its tax-neutral status. Under the Corporate Tax Law, if the conversion follows the “continuity” principle:

• The transition is not considered a taxable event (no capital gains tax on the transfer of assets).
• The company is exempt from Value Added Tax (VAT) and Stamp Tax on the conversion documents.

However, if the process is handled poorly and is instead classified as a company liquidation followed by a new formation, these tax exemptions are lost, leading to massive financial burdens. This is why professional oversight is non-negotiable.

Why Choose Finlexia Turkish Accounting Firm?

Since 2017, Finlexia Turkish Accounting Firm has navigated the complexities of the Turkish legal system for thousands of domestic and international clients. Based in the heart of Istanbul, we provide a bridge for foreign investors, offering services in English, Turkish, and other languages to ensure total transparency.

Our expertise goes beyond simple filing; we provide a holistic approach to corporate health. Whether you are scaling up to a JSC to attract venture capital or streamlining your family business into an LLC, we ensure your company type conversion transition is legally sound and tax-efficient.

Our Conversion Services Include:

• Valuation and financial reporting oversight.
• Drafting of New Articles of Association.
• Representation at the Trade Registry.
• Post-conversion compliance and board advisory.

Contact us for Company Type Conversion in Türkiye

Converting your company type in Türkiye represents a significant strategic decision requiring expert navigation of complex legal requirements and careful management of stakeholder interests. Whether you’re transforming from LLC to JSC to access capital markets or converting to LLC for operational efficiency, the process demands meticulous planning and flawless execution.

At Finlexia Turkish Accounting Firm, we bring over three years of specialized experience in Turkish corporate law, guiding businesses through successful company type conversions in Türkiye across diverse industries. Our multilingual team provides comprehensive support throughout the entire conversion process, from initial strategic consultation through final registration and beyond.

Don’t risk costly mistakes or unnecessary delays in your company conversion. Contact Finlexia Turkish Accounting Firm today to schedule a consultation with our corporate law specialists. Let us help you navigate the transformation process efficiently while protecting your business interests and ensuring full compliance with Turkish legal requirements. Reach out now to begin your company’s successful evolution.