What Is a Joint Stock Company, and Which Investors Is It Best Suited For?

Let us answer what a joint stock company is in one sentence: a joint stock company is a capital company whose capital is defined and divided into shares, which is liable for its debts only with its own assets, and in which the shareholders’ risk is limited to the capital share they have subscribed. It is abbreviated as A.Ş. In Turkey, it is the structure most often preferred by businesses planning to bring in investors, have shares change hands or go public in the future.

In this article, we explain the legal definition of a joint stock company, its formation and capital rules, the roles of the board of directors and the general assembly, and the 6 key differences between it and a limited liability company. In the final section, we discuss which investor profile this structure suits best.

What is a joint stock company? The legal definition and basic logic

A joint stock company is defined in Article 329 of the Turkish Commercial Code (TTK). Under the law, the company’s capital is defined and divided into shares, and the company is liable for its debts only with its own assets. The shareholders, on the other hand, are liable only to the extent of the capital shares they have subscribed and only to the company.

In practice, this definition means that, as a rule, a creditor of the company cannot pursue the shareholder’s home, car or investments in other companies. The shareholder’s risk is limited to the amount they have undertaken to contribute to the company. Article 331 of the TTK also states that a joint stock company may be established for any economic purpose and subject not prohibited by law.

You can access the current text of the law, with all its amendments, on the Turkish Commercial Code (TTK) No. 6102 (mevzuat.gov.tr) page. The provisions on joint stock companies start at Article 329 of the law and form one of the largest parts of the code.

What does joint stock company mean, and what does A.Ş stand for?

The answer to what “anonim şirket” (joint stock company) means lies in the name itself. The word “anonim” (anonymous) conveys that the company is based not on the identity of its partners but on its capital. Even if the shareholders change, the company continues under the same trade name and legal personality.

A.Ş stands for “Anonim Şirketi.” In trade names, it is usually abbreviated as “A.Ş.”; for example, the trade name “Örnek Yazılım Anonim Şirketi” is referred to briefly as “Örnek Yazılım A.Ş.” Let us also remind you that if the trade name includes the name of a natural person, the words indicating the company type must be written without abbreviation.

Features of a joint stock company: from formation to capital

The features of a joint stock company largely explain why an investor chooses this structure. The headings below gather the rules that should be known before deciding on formation.

Is formation with a single shareholder possible?

Yes, it is possible. Under Article 338 of the TTK, the existence of one or more founders who are shareholders is sufficient to establish a joint stock company. The founder may be a natural person or a legal entity, for example a parent company abroad.

If the company is established with more than one shareholder and later ends up with a single shareholder, this is notified to the board of directors in writing within seven days. The board of directors then has the fact that the company has a single shareholder registered and announced within seven days of the notification. There is no upper limit on the number of shareholders; this provides significant flexibility for those who want to broaden their investor base.

Minimum capital and the registered capital system

Article 332 of the TTK sets the minimum share capital at 50,000 TL and the initial capital for non-public companies choosing the registered capital system at 100,000 TL, and authorizes the President to increase these amounts. Presidential Decree No. 7887 was published in the Official Gazette of November 25, 2023 and raised these amounts to 250,000 TL and 500,000 TL, respectively, from January 1, 2024.

The registered capital system (authorizing the board of directors to increase capital up to a set ceiling without requiring a general assembly resolution) speeds things up for companies with growth plans. When a new investor comes in, a separate amendment to the articles of association is not needed for each capital increase. The compliance period granted to older companies with capital below the new amounts is December 31, 2026 as of October 2026; we recommend checking separately toward the end of the year whether an extension decision has been issued.

25% of the capital is paid before registration

Under the Turkish Commercial Code (TTK), at least 25% of the nominal value of shares subscribed in cash is paid before the company is registered, and the remainder within 24 months following registration. If there is a share premium (the portion paid above the nominal value of the share), all of it is also deposited before registration.

The payment is made into a special account opened at a bank in the name of the company being formed, which only the company can use. The bank transfers the money to the company only when a letter from the trade registry office showing that the company has acquired legal personality is submitted. In other words, for a company with capital of 250,000 TL, at least 62,500 TL must be available in this account before formation.

Free transferability of shares: registered and bearer shares

The point on which a joint stock company most clearly differs from a limited liability company is share transfer. Under Article 490 of the TTK, unless otherwise provided in the law or the articles of association, registered shares can be transferred without any restriction. The transfer can be made by delivering possession of the endorsed share certificate to the transferee; as a rule, neither notarization nor a general assembly resolution is required.

The articles of association may make the transfer of registered shares subject to the company’s approval. In this case, the company may refuse approval on the basis of a significant reason stated in the articles of association or by offering to acquire the shares at their real value. Registered shares that have not been fully paid, on the other hand, can by law be transferred only with the company’s approval.

Bearer share certificates cannot be issued for shares that have not been fully paid. Since the amendment made by Law No. 7262, the transfer of bearer shares takes effect vis-à-vis the company and third parties upon the transferee’s notification to the Central Registry Agency (MKK). Until the notification is made, the shareholder cannot exercise the rights attached to the share.

How do the board of directors, general assembly and audit work?

A joint stock company is managed and represented by the board of directors, while the company’s fundamental decisions are made by the general assembly consisting of the shareholders. For companies exceeding a certain size, the financial statements are also subject to independent audit.

Board of directors

Under Article 359 of the TTK, a joint stock company has a board of directors consisting of one or more persons, appointed by the articles of association or elected by the general assembly. A single-member board of directors is possible, and members do not have to be shareholders. A legal entity may also be a member; in this case, a single natural person who will act on its behalf is registered and announced.

Members of the board of directors are elected for at most three years and can be re-elected unless the articles of association provide otherwise. Unless the articles of association set a different arrangement, the authority to represent belongs to the board of directors, to be exercised with two signatures. The board may delegate this authority to a managing director (a member to whom the board has delegated authority) or to managers; however, at least one member of the board of directors must hold the authority to represent.

General assembly

The general assembly is the body through which shareholders exercise their rights concerning the company’s affairs. The ordinary meeting is held within three months from the end of each financial year, and matters such as the financial statements, profit distribution and the release of the board of directors are decided there. Powers such as amending the articles of association and electing members of the board of directors cannot be delegated to any body other than the general assembly.

The law provides that, as a rule, the general assembly convenes with the representation of shares covering at least one quarter of the capital, and that resolutions are adopted by a majority of the votes present at the meeting. The articles of association may set heavier quorums for certain resolutions. For investors who want to preserve the balance of power among shareholders, it is advisable to discuss these quorums at formation.

Subjection to independent audit

Not every joint stock company is subject to independent audit. Article 397 of the TTK provides that the companies subject to audit are determined by the President; the criteria are set by these decisions and updated over time. The financial statements of a company subject to audit are audited in accordance with the Turkish Auditing Standards published by the Public Oversight Authority.

Which companies are covered by the obligation to retain a lawyer?

Article 35 of Attorneyship Law No. 1136 requires joint stock companies with share capital of five times or more the minimum share capital amount in the law to retain a lawyer under contract. Based on the minimum amount of 250,000 TL for new formations, this threshold corresponds in practice to share capital of 1,250,000 TL.

A company that does not comply with the obligation may be subject to an administrative fine equal to two months’ gross minimum wage for each month in which it does not appoint a lawyer. For companies planning a capital increase, taking this threshold into account is good practice to avoid facing an unexpected cost later.

Liability: the shareholder or the board of directors?

The shareholder’s risk is limited to the capital share they have subscribed, and this rule is largely preserved for public debts as well. Article 35 of Law No. 6183, which holds limited liability company partners liable in proportion to their shares for public receivables that cannot be collected from the company, does not apply to joint stock company shareholders.

Here, liability is concentrated on the management side instead. Repeated Article 35 of the same Law allows recourse to the legal representatives, that is, often the members of the board of directors, for taxes and similar public receivables that cannot be collected from the company. For this reason, a person who will serve on the board of directors, especially a local executive appointed on behalf of a foreign investor, should accept the role knowing this risk.

On the corporate income tax side, there is no difference between the two company types. Under Corporate Income Tax Law No. 5520, the earnings of a joint stock company are also subject to corporate income tax at the general rate of 25%; a higher rate applies to banks and certain financial institutions.

6 key differences between an A.Ş. and an LTD

The table below places side by side the six criteria most often asked about when deciding on formation. We covered the specific rules of limited liability companies in detail in our article what is a limited liability company .

There is also a cost element outside the table: in a joint stock company, the administrative burden is generally greater because of board of directors meetings, general assembly procedures and possible independent audit. For a small business with no growth or investor goals, this burden may become an unnecessary cost.

Which investors is a joint stock company best suited for?

The short answer: for investors planning to raise investment, increase the number of partners or scale the business, a joint stock company is generally more suitable. For businesses that will operate in a closed structure with a fixed, small number of partners, a limited liability company is often sufficient. The final decision should be made by looking at your field of activity and five-year plan.

Foreign investors

Foreign Direct Investment Law No. 4875 provides that foreign investors are subject to equal treatment with domestic investors; in other words, a foreign person or company can also establish a joint stock company in Turkey on its own. Establishing a single-shareholder A.Ş. as the parent company’s subsidiary in Turkey is a structure we often see in practice. The fact that board members do not have to be shareholders makes it easier for the parent company to appoint its own executives or a local professional.

Those planning to raise investment and take on partners

For a company considering venture capital or angel investment, being able to transfer shares without being held up by notarization and general assembly approval speeds things up. Writing investor protections such as privileged shares, rights of first refusal and transfer restrictions into the articles of association is also more flexible in a joint stock company. For example, in a hypothetical scenario, a two-founder software startup preparing for its first investment round may choose to convert from a limited liability company to a joint stock company; this means a separate general assembly and registration process.

Businesses that will scale and aim to go public

A company that wants its shares to be traded on the stock exchange through a public offering must be a joint stock company; publicly held companies are also subject to Capital Markets Law No. 6362 and Capital Markets Board regulations. Even if you have no public offering goal today, the registered capital system and easy share transfer make it easier to manage the capital structure in fast-growing businesses.

Preparation checklist for those who want to set up a joint stock company

Setting up a joint stock company starts with drafting the articles of association correctly, because share transfers, representation authority and the capital arrangement are determined by this text. We recommend clarifying the following questions before the formation application:

• Will the share capital or the registered capital system be chosen, and is the capital amount close to the lawyer threshold?
• Are the 25% amount to be deposited before registration and the remaining 24-month payment schedule ready?
• How many members will the board of directors have, and will representation be exercised with a single signature or two signatures?
• Will the shares be registered, and will transfers be made subject to company approval by the articles of association?
• Does the field of activity fall within an area requiring Ministry permission?

We described steps such as the trade name, MERSİS application, bank blocking and trade registry registration in order in our how to set up a company guide. You can find our other articles on branches, liaison offices and formation for foreigners in our Company Formation in Turkey category.

Incorporation of joint stock companies in Turkey is our service through which we run the process end to end, from preparing the articles of association to blocking the capital, and from registration to the first board of directors resolutions.

Last updated: 17.10.2026