Purchasing a company refers to a legal entity or an individual acquiring another company targeted, including its assets, liabilities and debts, and all values. The decision to purchase and take over a company is a challenging one that requires a thorough examination of many details and significant expertise. Therefore, companies need to conduct a comprehensive evaluation of the target company they intend to purchase, which is known as due diligence.

In practice, these types of company assessments are often conducted by specialized audit firms. The audit firms responsible for conducting company valuations not only provide data for assessing the financial, legal, and regulatory risks that the business may face, but they also enable the prospective buyer to gain insights into the target companies’ internal structure, operations, marketing, human resources, suppliers, customer relations, competitive position, future prospects, debts, assets, liabilities and other relevant parameters.

If the company valuation is carried out accurately, any negative aspects that would affect the sale can be easily identified, ensuring that the decision on purchasing and taking over the target company is the right one and/or that the sale is conducted at the appropriate price. 

A shelf company in Turkey is generally defined as a legal entity that has been legally set up but is not active. The purchase of a shelf company can actually be defined as transfer of all shares of the shareholders to a third party individual and the reason for buying a shelf company is to obtain the business a credible history without building it from the scratch. In this article, we will focus on the transfer of shares in a limited liability company and advantages of purchasing a shelf company in Turkey. The transfer of shares in limited liability companies is regulated under Article 595  and subsequent articles of the 6102 numbered Turkish Commercial Code. 

How To Purchase Shelf Company in Turkey 

Legal procedures and required documents related to purchasing a shelf company in Turkey as a second phase is explained under the subtitle, “The Procedure of Buying Shelf Company in Turkey”, below. The first phase indeed can be determined as, finding the right company to purchase before starting the legal transactions related to transfer of shares.

There are various platforms in Turkey where advertisements for sale of companies are posted. Through these platforms, it is possible to contact the sellers, request relevant information and documents, and subsequently conduct separate due diligence in financial, legal, technical, organizational, human resources, and tax aspects to accurately analyze the value and risks associated with the target company.

If no risks are identified in the purchase and transfer of the company, the next step would be to prepare the share transfer agreement. Overall, how to purchase shelf company in Turkey can be explained step by step as follows: 

Step 1: Make research and conduct due diligence before initiating the legal purchase of a shelf company in Turkey, since it is crucial to conduct thorough research and due diligence. Identify the specific industry or sector you wish to operate in, and research the legal requirements, regulations, and market conditions pertaining to that sector. Additionally, research the reputation, areas of activity, value and credibility of the shelf company in order to endure its compliance with legal requirements and financial stability. 

Step 2: Engage professional services to navigate the complexities of acquiring a shelf company in Turkey, it is advisable to engage professional services such as lawyers, certified public accountants, business consultants and audit companies who specialize in company formations, mergers and acquisitions. These professionals can guide you through the legal aspects, assist in conducting due diligence, and ensure compliance with regulatory requirements.

Step 3: Select a shelf company once you have identified a reputable professional service provider, work closely with them to identify a suitable shelf company that aligns with your business model and areas of activity. Consider factors such as the companies age, value, brand, registered capital, legal structure, specific licenses or permits it may possess and lawsuits and enforcement dossiers filed against the company. Ensure that the chosen shelf company has a clean legal history, no outstanding debts and a clean tax record. 

Step 4: Negotiate the purchase agreement, negotiate the terms of the purchase agreement with the seller of the shelf company. This agreement should outline the purchase price, transfer of ownership, liabilities, warranties and any additional terms and conditions. Engage legal professionals to review the agreement or draft the agreement and ensure that all necessary legal safeguards are in place to protect your interests. 

Step 5: Obtain legal documents to complete the transfer of the shelf company, certain legal documents must be obtained specified by Istanbul Chamber of Commerce. This typically includes the transfer of ownership documents, such as a share transfer agreement and a notarized resolution of the companies general assembly approving the share transfer. Engage legal professionals to assist in preparing and filing the required documents with the relevant authorities. 

Step 6: Register the change of ownership once the legal documents have been prepared, they must be presented to the relevant authority for registration. This process typically involves updating the companies’ information at the trade registry office and tax office. The new owner will need to provide identification documents and complete the required paperwork to register the change of ownership.

Step 7: Fulfill post-transfer requirements after the change of ownership has been registered, it is essential to fulfill any post-acquisition requirements. These may include obtaining necessary licenses and permits, updating the companies’ bank account signatories, and complying with tax obligations. Engage professionals familiar with Turkish regulations to ensure compliance with all legal and regulatory requirements. 

Advantages of Shelf Company in Turkey 

Advantages of shelf company in Turkey are numerous and can significantly benefit entrepreneurs willing to establish or expand their operations in the country. The time and efficiency savings, immediate market entry, established legal compliance, enhanced credibility, access to infrastructure, and expedited financing options all contribute to a favorable business environment.

By capitalizing on the benefits discussed herein, the entrepreneurs can harness the opportunities offered by shelf companies in Turkey and position themselves for success in a dynamic and thriving market. One of the most important advantages of shelf company in Turkey is established legal compliance.

Because shelf companies in Turkey come with pre-existing legal compliance, including an already prepared articles of association, tax registration, VAT registration, bank account opening and required licenses and permits. This advantage ensures entrepreneurs can confidently operate within the legal framework, saving time and money.

Setting up a business from scratch often entails significant costs associated with infrastructure developments. Shelf companies offer the advantage of pre-existing physical assets, such as office spaces, manufacturing facilities, or distribution networks.

Acquiring a new company will provide you with savings in various operational aspects. When establishing a new company, depending on your business field, the equipment you need to purchase can be quite expensive. Therefore, when you buy a company, these potentially expensive equipment will already be present within the company.

This advantage allows entrepreneurs to save both time and money by utilizing infrastructure, thereby expediting the establishment of their operations and accelerating market entry. 

Creating a brand from scratch, making advertising investments to promote the brand and introducing the brand to the market and the customers will take time and be quite costly. If chosen wisely, acquisition of a shelf company in Turkey grants entrepreneurs an existing entity with a track record, enhancing credibility and reputation.

The acquired company may have a history of successful operations, a customer base, and ongoing business relationships. Such credibility fosters trust among clients, suppliers, and stakeholders, facilitating smoother business operations and accelerating growth. 

If the company you acquire has properly trained its employees, when you take over the company, these competent personnel become your own employees, which is considered advantageous most of the time. This is because it eliminates the need for procedures and time-consuming tasks such as posting job advertisements, conducting interviews with applicants, signing employment contracts with these individuals, forming working teams and organization charts, and sending employee entry notifications to social security institution.

Existing employees can provide also essential guidance and support before and after the transition phase, ensuring a smooth continuation of operations and knowledge transfer. 

The Procedure of Buying Shelf Company in Turkey

Within this subtitle we will be explaining the procedure of buying shelf company in Turkey. As mentioned above, purchase and taking over a shelf company in Turkey comes into an existence by the transfer of its shares to a third party. In limited liability companies, the transfer of shares required the preparation and signing of a written limited liability company share transfer agreement, notarization of mentioned agreement, and subsequent application for registration in the trade registry and entry in the share ledger by the directors.

It is important to note that for the registration of the transfer in the trade registry, the company directors must apply within 30 days from the date of transfer. The articles of association of a limited liability company may contain provisions stating that the approval of the general assembly is required for the transfer of shares. If the articles of association specify that the transfer of the company can only be done with the approval of the general assembly, then obtaining the approval of the general assembly will be necessary for the transfer.

As approving the transfer of shares is within the non-transferable authorities of the general assembly, the general assembly cannot delegate this authority to the directors in any way. Approval for the limited liability company share transfer can be obtained with a simple majority of votes represented at the general assembly meeting.

If a simple majority is not achieved at the general assembly meeting, the share transfer will be rejected. On the other hand, the articles of association may state that the approval of the general assembly is not required for the transfer of shares, in which case, no general assembly approval will be required for the share transfer.

According to Article 595/4 of the 6102 numbered Turkish Commercial Code, the transfer of capital shares can be prohibited by the companies’ articles of association (AOA). If the transfer of shares is prohibited in the AOA, making an amendment on relevant provision of the articles of association will be needed before the Istanbul Chamber of Commerce. 

For the transfer of shares in a limited liability company, the following documents are required: 

  • Notarized copy of the general assembly resolution and minutes. The general assembly resolution regarding the acceptance of the share transfer should be taken on or after the date of the share transfer agreement. 
  • If available, a list of participants (hazirun cetveli) should be included. 
  • A share transfer agreement duly executed before a notary public, in accordance with Article 595 of the Turkish Commercial Code and Article 103/1-b of the Trade Registry Regulation. 
  • Notarized copy of the relevant section of the share lodger, showing the entry of the share transfer, as required by Article 103/1-c of the Trade Registry Regulation. 
  • If there is also a director appointment process accompanying the shareholder transfer, all necessary documents related to the limited liability company director appointment, as published on the Istanbul Chamber of Commerce web page, must be included amongst the share transfer application documents. 

Why buy a ready-made company in Turkey?

Rapid market entry and expansion is one of the reasons an entrepreneur to buy an already made company in Turkey. Turkey’s strategic geographical location serves as a gateway between Europe and Asia, making it an attractive market for global business expansion.

Acquiring a ready-made company enables entrepreneurs to tap into this vibrant market immediately, bypassing the time-consuming process of market research, establishing a physical presence, and building brand awareness. It provides an expedited route to market entry, allowing entrepreneurs to capitalize on emerging opportunities and gain a competitive advantage. 

Established business network is another reason entrepreneurs chose to buy a ready-made company in Turkey. Purchasing a ready-made company in Turkey will provide access to an existing network of suppliers, clients, and other stakeholders.

This advantage is particularly beneficial for entrepreneurs who are willing to penetrate the local market quickly. The acquired company may already have established relationships, contracts, and a customer base, saving the new owner the effort of building these connections from scratch. 

Ready-made companies often come with an existing team that possess valuable industry knowledge and expertise. This can be invaluable for entrepreneurs seeking to gain insights into the local market dynamics, customer preferences and business practices. The existing employees can provide essential guidance and support during the transition phase, ensuring a smooth continuation of operation and maximizing the chances of success. 

Launching a new business carries inherent risks, especially in unfamiliar markets. Acquiring a ready-made company mitigates some of these risks. A pre-existing company has already undergone market validation and brand recognition enabling entrepreneurs to assess its financial history, market position and profitability. Moreover, an established company enhances credibility with clients, suppliers, and financial institutions, facilitating access to funding and establishing trust in the market. 

Benefits of Buying a Shelf Company in Turkey?

If you intend to invest in Turkey, you have the option to either establish a company or purchase an already existing company. If you are an individual without a company in Turkey or any other country with no record of investments, we recommend you to establish a limited liability company in Turkey. Limited liability companies can be established with a minimum capital of 10.000,00 Turkish Liras, by a single individual and within a short period of time like three business days.

If you lack knowledge about company management and the obligations of merchants in Turkey and Turkish regulations, acquiring an already established company may bring more harm than benefit. For instance, you may experience a decline in the companies’ annual profit or be held liable for losses incurred to the companies’ creditors. 

Within content of our essay, we have detailly indicated advantages and benefits of buying a shelf company in Turkey, if the target company is chosen wisely. However, it would be beneficial for our client candidates to consult our lawyers in Istanbul whether it would be better for them to establish a company or buy an already established company.

While there are advantages to buying a shelf company, it is important also to consider the potential disadvantages as well. Shelf companies are pre-existing legal entities with a pre-determined structure and trade title. This means that you have limited flexibility to customize the company according to your specific business needs.

Some shelf companies have no established reputation and brand presence in the market. Building trust and recognition can be more challenging compared to starting a brand-new company since customers and clients may be hesitant to engage with a company that appears to have a long history but lacks a track record of its own.

On the other hand acquiring a shelf company typically involves a higher upfront cost compared to establishing a new company from scratch depending on its age, its assets, potential restructuring expenses and the activities it has undertaken. 

Advantages of a Shelf Company 

A shelf company, also known as an aged or dormant company, is a business entity that has been registered but has not been actively used for any business operations by its’ owners. These companies are typically sold to individuals or businesses looking for certain advantages that come with using a pre-existing company.

There are many advantages of a shelf company in Turkey. Shelf companies have a history of existence, which can be appealing to clients, creditors, potential partners and customers. This history may include years of registration, which can instill trust and credibility. You can start conducting business as soon as you purchase a shelf company. This can save you time compared to starting a new company from scratch, which may involve various administrative processes and approvals especially if you are willing to conduct your business in the same trade area. A shelf company can create the perception that your business is stable, established and recognized in the trade area which can be useful when seeking financing, attracting clients, or entering partnerships.

In addition, setting up a new company may involve administrative tasks such as registration, compliance, and obtaining required administrative licenses and permits. The shelf company you are willing to buy may already complete these tasks and obligations, reducing the administrative hassles. While shelf companies offer these advantages, it’s essential to conduct due diligence and ensure that the company’s history, structure, trade area and legal status align with your business goals and objectives.

Purchasing a Shelf Company 

Purchasing a shelf company in Turkey involves several steps. A shelf company is a pre-registered company with an established legal entity, which can save you time and effort compared to starting a new business from scratch. We provide you herewith a general guide on how to purchase a shelf company in Turkey:

  • Determine Your Business Needs: Before purchasing a shelf company, identify your business goals, industry, NACE codes and trade area you will operate in and any specific requirements you have. It is important to make sure that the shelf company you choose aligns with your intended business activities.
  • Search for a Shelf Company: Look for companies that are available for purchase. You can do this through various sources. Unfortunately as a law firm in Istanbul, Turkey we cannot act as a middlemand and find you a shelf company. Rather you can consult to certified public accountants in order to see if they are working with any shelf companies in Turkey or use your business connections.
  • Due Diligence: Conduct thorough due diligence on the shelf company you are interested in. This includes reviewing the company’s financial records, brand, legal status, and any potential liabilities. Verify that the company has a clean history and is in good standing with Turkish authorities.
  • Negotiate Terms and Price: Our lawyers will assist you on contacting the seller to negotiate the terms of the sale, including the purchase price, payment terms, and any conditions or warranties related to the shelf company to be acquired in Turkey.
  • Purchase Agreement: Our lawyers will draft a purchase agreement that outlines all the terms and conditions of the sale. This agreement should specify the transfer of ownership and any responsibilities of the seller.
  • Transfer of Ownership: Once the purchase agreement is finalized and all conditions are met, you can proceed with the transfer of ownership. This phase involves updating the company’s registration records with the Trade Registry Office which our lawyers will assist you with. 
  • Compliance and Licensing: Ensure that the shelf company complies with all regulatory requirements for your specific industry. You may need to obtain any necessary licenses or permits to operate your business.
  • Update Corporate Records: Update the company’s corporate records, including the board of directors and any changes in share ownership, if applicable.
  • Bank Accounts and Tax Registration: Open a bank account for the company and register for tax purposes. Ensure that all financial records and tax filings are up to date. Bank account shall be opened in a bank that resides in the same area that your company is established.
  • Business Operations: Once ownership is transferred and all legal and regulatory requirements are met, you can start conducting business operations under the new company exists.

Set Up a Limited Liability Company in Istanbul

While shelf companies can offer several advantages, they also come with certain disadvantages and risks and it is crucial to carefully consider these factors before deciding to use a shelf company. The existing history of a shelf company may not always be transparent, and there could be hidden liabilities or legal issues that you are unaware of.

Conduct thorough due diligence to uncover any potential problems. In addition purchasing a shelf company may be more expensive and time consuming than registering a new one. You not only have to pay for the cost of the company itself but also any associated fees, such as renewal fees, taxes, and legal expenses. It is important to note that it will only take three days to establish a limited liability company.

Another disadvantage of acquiring a shelf company is that mentioned shelf company may have a predefined structure and name that may not align with your specific business needs and branding. You may need to go through a process to change the company’s name or structure.

Nevertheless, if the shelf company has been dormant for an extended period, it may be challenging to revive its reputation and credibility in the business world, especially if it has not maintained a positive reputation.

Some shelf companies may have restrictions on the types of activities they can engage in or may have specific industry licenses that do not align with your intended business activities. Instead acuqiring a shelf company in Istanbul, Turkey, you may chose to set up a limited liability company in Istanbul which is faster, cheaper and easier to establish.

In order to learn more about setting up a limited liability company in Istanbul you can visit our Article, Company Formation in Turkey or Commercial and Corporation Law that includes required steps for setting up a limited liability company in Istanbul, Turkey and advantages of setting up a limited liability company in Istanbul, Turkey.

Due Diligence Companies in Turkey 

Due diligence services in Turkey are provided by various consulting firms, law firms, and financial institutions that specialize in assessing the financial, legal, and operational aspects of businesses. When seeking due diligence services in Turkey, it’s essential to choose a reputable and experienced firm to ensure a thorough and accurate evaluation. Our law firm provides due diligence services in the field of corporate and business law.

Our law firm in Turkey examines the contracts and contractual obligations of the shelf company to be acquired, the movable and immovable properties of the target company, rights arising from intellectual and industrial property rights, and licenses, as well as whether there are any encumbrances on the movable and immovable properties owned by the target company or whether limited real rights have been established on them.

We review the target companies employment contracts, non-compete agreements, and employee disclosure documents. By examining the lawsuit files in which the target company is a plaintiff or defendant, as well as the enforcement dossiers in which it is a creditor or debtor, their reporting is carried out effectively.

Due diligence can be categorized as financial, tax, environmental, human resources, technical and legal due diligence on a topic by topic basis, so consulting with different due diligence firms may be necessary for due diligence other than legal due diligence. Deloitte Turkey, KPMG Turkey, PwC Turkey, EY Turkey, BDO Turkey are some of the respective due diligence companies in Turkey. Please note that our law firm is is in collaboration with certified public accountants thus by our business channels you can also benefit from their tax due diligence services. 

Reach Us To Acquire A Shelf Company in Turkey

Acquiring a shelf company in Turkey is a strategic move that offers numerous advantages, from time savings to enhanced credibility. Mesci Law Firm, with its expertise in Turkish business laws and regulations, is the ideal partner to guide you through this process seamlessly.

By reaching out to Mesci Law Firm, you can embark on your Turkish business venture with confidence, knowing that you have a trusted ally by your side to navigate the complexities of shelf company acquisition. If you want to acquire a shelf company in Turkey, reach us to acquire a shelf company in Turkey. Our lawyers are always prepared to assist you on acquisition of a shelf company in Istanbul, Turkey.

Our Services for Shelf Company in Turkey

Acquisition of a shelf company in Turkey offers significant benefits for entrepreneurs seeking rapid market entry and reduced operational complexities, if chosen wisely. Mesci Law Firm stands as a trusted legal institution, providing unmatched expertise, personalized solutions, and seamless transaction management for clients interested in acquisition of shelf companies in Turkey.

Our extensive legal knowledge thorough due diligence, and post-acquisition support ensure that entrepreneurs can confidently navigate the process, protect their interests, and maximize the benefits of acquiring the shelf company determined. Our law firm in Turkey as their trusted lawyers, entrepreneurs can embark on their journey of acquisition of a shelf company in Turkey with confidence and peace of mind. Our services for shelf company in Turkey are as follows:

  • Conducting legal due diligence and providing to clients a written legal due diligence report related to shelf company chosen. 
  • Providing client a certified public accountant for taxational due diligence related to shelf company chosen.
  • Providing legal consultancy to client on transfer of shares and purchase of a shelf company in Turkey. 
  • Preparing share transfer agreement and general assembly resolution. 
  • Conducting application and registration procedures related to share transfer and shelf company purchase. 

Mesci law firm as an up-front globally recognized law firm in Turkey is always prepared to assist your company establishment in Turkey and purchasing a shelf company in Turkey transactions with its expert lawyers. Our law firm is specialized on company formation especially on limited liability company formation in Turkey, branch office formation in Turkey and joint stock company formation in Turkey. If you are willing to buy a shelf company in Turkey, you can reach our law firm in Turkey through our contact page. 

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