The Legal Structure of a Limited Liability Company and the Shareholding Relationship

Legal Article · 12 November 2026
Attorney Thomas Andreas Di Constantinople

A limited liability company is a capital company established by one or more natural or legal persons, with its share capital divided into shares. TTK Art. 573 states that shareholders are generally not liable for the company's debts. Shareholders must pay their committed capital contributions and fulfil valid additional payment and ancillary performance obligations contained in the articles of association. Special rules concerning public receivables and personal assumptions of debt are distinguished from this general framework.

Management and representation are governed by the articles of association under TTK Art. 623. One or more shareholders or third parties may be appointed as managers; at least one shareholder must have management and representation authority. Shareholder status and the office of manager are different. Holding shares does not automatically give a person who has not been appointed as a manager authority to sign on the company's behalf.

The non-transferable powers of the general meeting are set out in TTK Art. 616. Amending the articles of association, appointing managers and other fundamental decisions specified by law require the competent body's duly formed decision. Whether a private agreement between shareholders can replace a corporate resolution is determined by examining the agreement's content together with company law rules.

For share transfers, the formal requirements and general meeting approval regime in TTK Art. 595 are important. A written agreement, notarisation of signatures and provisions in the articles of association are separate stages; not every transfer is completed merely by payment of the price. The legal functions of the share ledger and registry procedures must also be distinguished. The closely held structure of a limited liability company requires entry into and exit from the company to be examined against contractual provisions and statutory procedures.

Legal Basis: Turkish Commercial Code No. 6102, Arts. 573, 595, 616, 623.

This article has been prepared for general legal information purposes.