2024 What is a Joint Stock Company (JSC), How to Establish One, What is the Tax Rate, Who Can Establish One, What is Required, What are the Advantages and Disadvantages?

A joint stock company, also known as a joint stock company, is defined as a capital company and has all the qualifications required for capital companies and is generally established for long-term plans. It can engage in all kinds of economic activities and this requires a clear statement of the company’s purpose of activity in its articles of association. Boards have a say in its management and it is governed on a majority basis. Unlike a sole proprietorship, it can offer securities such as shares/share certificates and bonds.

What are the characteristics of a joint stock company?

A joint stock company has broader characteristics than other types of companies as it has a more comprehensive pool of activities and qualifications:

• There is no limit to the number of shareholders.
• Shareholders cannot be removed from the partnership.
• Its capital is definite and divided into shares.
• Share/share certificates are issued to the shareholders for the shares of the company’s partners.
• The transfer of shares can be made by contract without the requirement of notarization or registration in the trade registry.
• The company’s liability to third parties is limited to its assets. The liability of the shareholders is in proportion to their capital shares.
• Shareholders are not liable for public debts.
• The share capital cannot be less than TL 250,000 and the initial capital cannot be less than TL 500,000 for non-public joint stock companies that have accepted the registered capital system.
• It may be offered to the public.
• It may issue shares and bonds.
• Members of the board of directors may be both real and legal persons.

How to Establish a Joint Stock Company?

The stages of establishing a joint stock company are listed below:

• It is established with the permission of the Ministry of Customs and Trade.
• Within 30 days after the establishment of the company, the address of the company’s office is registered with the “local trade registry”.
• After registration, this process must be announced in the Turkish Trade Registry Gazette.

What is the Joint Stock Company Tax Rate?

Joint stock companies are corporate taxpayers. In 2023, the corporate tax rate is applied as 20% and 25%, while in 2024, the corporate tax rate for joint stock companies is applied as 25%.

Who Can Establish a Joint Stock Company?

All citizens of the Republic of Turkey have the right to establish a joint stock company. In addition, foreign nationals also have the right to establish joint stock companies in Turkey and to be a partner in these companies.

What Should be Included in the Articles of Association of a Joint Stock Company?

When establishing a joint stock company, the following information must be included in the company’s articles of association:

• The clear title of the joint stock company,
• Information on the company’s shareholders, if any, and the amount of their shares,
• Company’s headquarters address,
• He’s the managing director of the company,
• If 25% of the company’s capital is paid in advance, when the remaining 75% will be paid.

Which Documents are Required for a Joint Stock Company?

When establishing a joint stock company, the following information must be included in the company’s articles of association:

• Petition
• Approval of articles of association
• Residence certificates of the owners of the company
• Three passport size photographs of the owners of the company
• Workplace lease agreement
• Signature declaration for all partners
• Proof of identity card of all partners
• Chamber registration declaration
• Receipt of deposit of the capital
• For customs brokerage joint stock companies, the notarized customs brokerage permission certificate of the partners and the managers
• responsible for customs procedures appointed from outside must be submitted.
• For authorized customs brokerage companies, the notarized authorization certificate of the partners obtained from the Undersecretariat of Customs must be submitted.
• If there is a minor company partner, his/her parents; if any of his/her parents is already a partner in the joint stock company, a trustee appointment decision obtained from the court for the partner parent.
• If the founders of the joint stock company include municipalities, other local governments or unions established by these local governments, a copy of the decision of the Council of Ministers authorizing the participation of these organizations is required.

Which Joint Stock Companies are Subject to Ministry Permission?

• Companies operating foreign currency kiosks
• Companies engaged in general merchandising
• Free zone founder and operator companies
• Asset management companies
• Holdings established as joint stock companies
• Insurance companies
• Financial leasing companies
• Factoring companies
• Banks
• Independent audit companies
• Companies subject to the Capital Markets Law
• Agricultural products licensed warehousing companies
• Commodity commodity exchange companies
• Surveillance companies
• Technology development zone management companies

What are the Advantages of a Joint Stock Company?

• There is no upper limit on the number of shareholders.
• Joint Stock Company can be offered to the public if desired.
• No additional notary approval is required for the transfer of capital shares.
• Compared to limited liability companies, company partners who are not members of the board of directors are not required to have 4B insurance.
• Shareholders’ liability for company debts is limited. Partners are only obliged to pay the capital debt they have committed.

What are the Disadvantages of a Joint Stock Company?

• The minimum capital amount has been 250 thousand TL as of 2024.
• A ministry representative is required at the general assembly meetings of the company.
• According to the third paragraph of Article 35 of the Law on Attorneys, companies with a capital of over TRY 1,250,000 (five times the basic capital) must have a contracted lawyer.
• Companies that are required to have a lawyer but do not do so are subject to a fine of 40 thousand TL per month.
• Costs in accounting and registration/registration procedures are higher than other types of companies.