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The act of company liquidation in Turkey is regulated by the Commercial Code. There are many reasons a company may register the liquidation and the decision can be taken by the general assembly of the company or by a competent court.
The reasons of liquidation can be the accomplishment of the specific goals stipulated in the articles of association, the expiration of the availability term posted in the articles, the decision of the members that the company is no longer meeting their requests, a claim made by creditors to a Court or the beginning of the process of bankruptcy.
The liquidation can be voluntary (as a result as the company’s general assembly decision) or compulsory (as a result of a Court request).
What are the steps for company liquidation in Turkey?
If the decision of company liquidation is taken by the members of the company during a general meeting, a liquidator must be appointed to represent the company during the process. The name and its details, along with the decision of liquidation must be registered at the Turkish Trade Registry. The general meeting has the powers to dismiss the liquidator and can decide what power he has.
In case of a compulsory liquidation, the Court must appoint the liquidator and has the power to dismiss it if necessary. The liquidator must elaborate a balance sheet and an inventory statement and show it in a general meeting where it must be approved. If it receives the approval, the liquidator can begin the process. The liquidator is checking the documents and is notifying the creditors regarding the liquidation process. He is also deciding the specific terms if depositing the claims.
The creditors are then submitting their claims and if it doesn’t do it on time the amount necessary to cover their claims is deposited to an administrative authority appointed by the liquidator. An intermediary balance sheet and reports regarding the liquidation status must be elaborated and presented at the annual general meetings.
The remaining assets resulted after covering all the claims can be divided among the shareholders, up to their contribution to the company’s capital. After that, a last general meeting is convened and the last balance sheet and a report regarding the termination of liquidation and its results are presented by the liquidator. The decision is then registered at the Trade Register and the name of the company is permanently deleted from it.
The liquidator must also appoint a person where all the company’s documents will be kept for a period of minimum 10 years. The name and the address of that person must be mentioned in the application sent to the Turkish Trade Registry. After that, the liquidator is paid for his work and it’s dismissed.
How long does it take to liquidate a company in Turkey?
It may take 13 months to liquidate a company in Turkey, depending on its size and the complexity of its debts.
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