Article 595 of the Commercial Code builds a chain — written agreement with notarised signatures, general assembly approval, share ledger, trade registry — and the transfer becomes effective only where every link holds.
A share transfer in a Turkish limited liability company is not one signature and a handshake: Article 595 of the Turkish Commercial Code No. 6102 (full text) builds a chain of four links — a written agreement with signatures attested by a notary, approval by the general assembly unless the articles of association dispense with it, an entry in the share ledger, and a filing with the trade registry — and the buyer becomes a shareholder when the approval is given, not when the money moves. Where a link is missing, the parties hold a contract they cannot register and a buyer the company need not recognise.
This guide follows that chain in the order a closing runs, then deals with what slows foreign parties down: getting a signature executed abroad into a Turkish notary’s file, and the post-closing notification many buyers discover only at their first audit. It concerns limited companies (limited şirket) only; joint stock companies work on a different logic, their shares moving by delivery or endorsement rather than by notarised agreement.
1. The chain at a glance
| # | Step | Provision | Who acts | Deadline | What fails without it |
|---|---|---|---|---|---|
| 1 | Written transfer agreement, signatures attested by a notary | TCC Art. 595(1) | Seller and buyer, before a Turkish notary | None | The statutory form is not met; the registry rejects the filing |
| 2 | Approval of the general assembly — unless the articles provide otherwise | TCC Art. 595(2); Art. 616(1)(g); Art. 620 | Shareholders in general assembly, by absolute majority of votes represented | Deemed given if not refused within three months of the application (Art. 595(7)) | The transfer does not become effective — the approval is what makes it so |
| 3 | Entry in the company's share ledger | TCC Art. 594(1) | The managers | None stated | The ledger page is a required annex to the registry filing |
| 4 | Application to the trade registry | TCC Art. 598(1); Trade Registry Regulation Art. 103(1) | The company's managers | Thirty days | The seller stays on the register; those relying on it are protected (Art. 598(3)) |
| 5 | E-TUYS update, where the company is within the Foreign Direct Investment Law | Art. 5 of the Implementing Regulation to Act No. 4875 | The company's authorised user | One month from the transfer | A reporting default, separate from the transfer's validity |
Two rows are where most transactions go wrong. Step 2 is conditional — read the articles before assuming it. Step 4 is not, but neither does it create the transfer.
2. The transfer agreement: form and prescribed content
Article 595(1) requires that “the transfer of a capital share and transactions creating an obligation to transfer are made in writing and the signatures of the parties are attested by a notary”. Two things follow.
First, the form requirement reaches back one step: not only the transfer itself but the transaction creating the obligation to transfer — the sale and purchase agreement, the option, the preliminary contract — must be in the same form. A share purchase agreement signed privately and intended to be “papered later” is not a lesser version of the transaction; it is a document that has not met the form the Code prescribes for it.
Second, the same paragraph does not stop at form. It goes on to dictate content: the agreement must also state additional payment and ancillary performance obligations; the fact that any non-competition covenant has been aggravated or extended to all shareholders; the rights of first offer, pre-emption, repurchase and call; and the terms on contractual penalties. That is a statutory disclosure duty running in favour of the transferee, and it is the commonest defect in agreements drafted abroad from an English-law template. Where the articles created those rights under Art. 577(1)(a) and (b) they must be recited; where they sit in a separate contract between the shareholders, the interaction between the two instruments has to be worked through before signature, a point we develop in our guide to shareholders’ agreements in Turkish joint ventures.
A third, quieter constraint sits in Art. 583(2): nominal values must be twenty-five Turkish lira or a multiple. A transfer of “18.7 per cent” is therefore not always documentable as drawn; the parcel has to resolve into shares that respect that rule.
The notary’s role here is narrow and often misunderstood. Article 60(4) of the Notaries Act No. 1512 lists the attestation of signatures on documents written elsewhere among the notary’s functions, while Art. 89 — which lists the transactions that must be drawn up by the notary in deed form — does not mention share transfers. The instrument therefore stays the parties’ document: under Art. 90 the notary certifies by endorsement that the signature belongs to the signatory, keeps a signed copy and returns the original, and under Art. 91 the signature must be affixed in his presence or acknowledged there.
3. Approval by the general assembly, and what happens if nobody answers
Article 595(2) reads: “Unless the articles of association provide otherwise, the approval of the general assembly of shareholders is required for the transfer of a capital share. The transfer becomes effective by this approval.” Everything practical about the second step is in those two sentences and the five paragraphs that follow them.
The default can be switched off. The requirement applies unless the articles provide otherwise, and in vehicles set up during company formation with an eventual sale in mind the articles frequently waive it. The Trade Registry Regulation tracks the statute: Art. 103(1)(a) asks for the notarised resolution “unless the articles of association provide otherwise”.
Refusal needs no reason. Under Art. 595(3), unless the articles regulate the matter differently, the assembly may refuse approval without stating a reason. Refusal is available even against permissive articles in one case: Art. 595(6), where the articles impose additional payment or ancillary performance obligations, the transferee’s ability to pay is doubtful, and the security requested from him has not been given.
Prohibition is possible, but not absolute. Article 595(4) permits the articles to prohibit transfer outright; Art. 595(5) then reserves, where transfer is prohibited or approval refused, the shareholder’s right to withdraw from the company for just cause. The lock is on the sale, not on the shareholder.
Silence approves. Under Art. 595(7), if the general assembly does not refuse within three months of the application it is deemed to have approved. The clock runs from the application, so a dated, provable request is worth more than a conversation.
The majority is ordinary. Approval of transfers is listed in Art. 616(1)(g) among the non-delegable powers of the general assembly — the managers cannot decide it. But non-delegable is not the same as qualified: under Art. 620 all resolutions are taken by an absolute majority of the votes represented, unless the law or the articles state otherwise. The qualified majority in Art. 621(1) — two thirds of the votes represented plus an absolute majority of the entire voting capital — attaches to the decision in Art. 621(1)(c) to restrict, prohibit or facilitate transfers, that is, to an amendment of the articles, not to an individual approval.
Two mechanical points help in practice. In a single-shareholder company, Art. 616(3) gives that shareholder all the powers of the general assembly but requires his resolutions to be in writing. And Art. 617(4) allows a resolution without a meeting, on the written consents of the other shareholders to one shareholder’s proposal, provided the same proposal goes to all of them — which is how most transfer approvals are taken.
Where the share passes otherwise than by agreement — by inheritance, under the matrimonial property regime, or through enforcement — Art. 596(1) removes the approval requirement altogether, but does not leave the company powerless: under Art. 596(2) it may refuse to approve the acquirer within three months of learning of the acquisition, and only if it offers to take the share over at its real value; under Art. 596(4), if it has not refused expressly and in writing within those three months it is deemed to have approved. Where that value is disputed, Art. 597 sends the question to the commercial court of first instance at the company’s seat and makes its decision final.
4. Share ledger and trade registry: the paper that outlives the deal
Article 594(1) obliges the company to keep a share ledger recording the shareholders and their addresses, the number of shares each holds, transfers and passages, nominal values, groups and any usufruct or pledge rights; under Art. 594(2) shareholders may inspect it. In a small company this book is often the only continuous record of who owned what, and the first document to ask for.
Registration is then the managers’ job. Article 598(1) provides that they apply to the trade registry for registration of the passages of capital shares, and Art. 103(1) of the Trade Registry Regulation (official text) sets the thirty-day period and the annexes: a notarised copy of the approving resolution, unless the articles provide otherwise; the transfer agreement with the parties’ signatures attested by a notary, or the relevant document where the share has passed by inheritance, matrimonial property regime or enforcement; and a copy of the share ledger page on which the passage has been entered.
If the managers do nothing, the seller is not stranded. Article 598(2) allows the departing shareholder to apply to have his name struck in relation to those shares, whereupon the registry directorate gives the company a period to notify the acquirer’s name; Art. 103(2) of the Regulation adds that he applies by producing the notarised transfer agreement. This matters because of Art. 598(3): the good faith of a person relying on the registry entry is protected. A seller who has been paid but left on the register keeps a public identity he no longer wants.
Deadlock over an approval that never comes, or a majority that refuses every buyer, moves the question out of transactional territory and into our corporate law work.
5. Closing from abroad: signature, capacity, notification
Nothing in the Commercial Code requires a buyer to be Turkish or to be present. What foreign parties meet is documentary friction, in three places.
The power of attorney. A party who will not attend the notary signs through an attorney. Article 224(1) of the Code of Civil Procedure No. 6100 provides that documents prepared by foreign state authorities carry that quality in Türkiye only if certified by the competent authority of the issuing state or by the relevant Turkish consular authority, and Art. 224(2) reserves the international conventions on the certification of foreign public documents to which Türkiye is a party. Two routes follow: a power of attorney issued at a Turkish consulate, or one executed before a foreign notary, certified for use abroad, then translated and the translation attested in Türkiye. The instrument should name the company, the share, and the authority both to sign the transfer agreement and to represent the principal in the general assembly.
Capacity. Where the buyer or seller is a foreign company, Art. 9(4) of Act No. 5718 on Private International Law and Procedural Law provides that the capacity of legal entities is governed by the law of the administrative seat stated in their constitutive instrument, adding that Turkish law may be applied where the actual administrative seat is in Türkiye. The corporate resolutions to be produced are therefore those of the entity’s own jurisdiction, under the same certification rules as the power of attorney.
Notification after closing. Article 1 of the Foreign Direct Investment Law No. 4875 describes its own purpose as converting the permit and approval system into an information system, and Art. 3(a) puts foreign investors on an equal footing with domestic ones. The counterpart is reporting: Art. 4 requires statistical information about investments to be notified under procedures set by regulation, and adds that it cannot be used as evidence. Article 5 of the Implementing Regulation (official text), as amended in 2018, sets the mechanics: a company within the scope of the Law completes the “Shareholders List” field on E-TUYS within one month of a transfer, whether between existing shareholders or to an outside investor; a wholly domestic company brought within the Law by a foreign investor joining it completes the investor, shareholder list and affiliate fields in the same period; and where a payment has been made on a capital increase or a transfer, the capital information form follows within one month of payment. The earlier steps are covered in our guide to setting up a company in Türkiye as a foreign investor.
6. Cost and tax: less than most buyers expect, and one item that is not
| Item | Provision | Treatment |
|---|---|---|
| Stamp duty on the transfer agreement | Stamp Duty Act No. 488, Table (2), Section IV, item 16 | Exempt — documents relating to the share transfers of limited companies; the words "share transfers" were added by Act No. 6728 in 2016 |
| Notary and registry fees under the Fees Act | Fees Act No. 492 Art. 123(3) | Exempt — transactions carried out by reason of the share transfer of a limited company, judicial fees excepted |
| The notary's own charge | Notaries Act No. 1512 Art. 112 | Payable; fixed by a tariff issued by the Ministry of Justice after the opinion of the Union of Turkish Notaries and revised with effect from the beginning of each calendar year, so it is checked for the year of closing rather than assumed |
| Seller is an individual | Income Tax Act No. 193, repeated Art. 80(4) | Gains from the disposal of "participation rights or shares" are capital gains, with no holding-period relief of the kind item 1 of the same article gives to shares of resident companies; an annual exemption amount applies and is updated each year |
| Seller is a company | Corporate Tax Act No. 5520 Art. 5(1)(e) | A part of the gain on participations held in the assets for at least two full years is exempt; the proportion stated in the statute is open to amendment by Presidential decision, so it is checked as at the date of sale. The same article conditions the relief on keeping the exempt part in a special reserve account to the end of the fifth year and collecting the price by the end of the second calendar year following the sale |
The row that surprises people is the fourth. Individuals selling shares in a Turkish joint stock company can rely on a holding-period rule; individuals selling a limited company share cannot, because that share is not a share certificate and falls under the separate heading in repeated Art. 80(4) of the Income Tax Act No. 193 (official text) for participation rights or shares. Length of ownership does not change the analysis.
7. A closing checklist that reflects the statute
- Read the articles first. Do they waive approval under Art. 595(2) or prohibit transfer under Art. 595(4)? Do they contain rights of first offer, pre-emption, repurchase or call under Art. 577(1)(b), and additional payment or ancillary performance obligations that must be recited under Art. 595(1)?
- Check the capital and the parcel. Nominal values must be twenty-five lira or a multiple (Art. 583(2)). The statutory minimum capital is fifty thousand lira, raised from the ten thousand in Art. 580(1) by Presidential Decision No. 7887 of 24 November 2023.
- Draft to Art. 595(1), not to a foreign template. Form and prescribed content sit in the same paragraph.
- Date the approval request. The three-month deeming period in Art. 595(7) runs from the application.
- Take the resolution correctly. Absolute majority of the votes represented (Art. 620); writing for a sole shareholder (Art. 616(3)); written consents of all shareholders if the meeting is dispensed with (Art. 617(4)).
- Enter the transfer in the share ledger (Art. 594(1)) and keep the page — it is an annex to the filing.
- File within thirty days with the three documents in Art. 103(1) of the Trade Registry Regulation, and diarise Art. 598(2) as the seller’s fallback.
- Update E-TUYS within one month where the company falls within Act No. 4875.
