Limited Partnership in Turkey | Structure, Liability & Setup

What is a Limited Partnership?

A Limited Partnership in Turkey is a business structure that combines unlimited liability partners and limited liability partners under one entity. It is regulated by the Turkish Commercial Code.

Unlike a Collective Company, where all partners are fully liable, a limited partnership distinguishes between active partners (unlimited liability) and dormant partners (limited liability).

Types of Limited Partnerships

There are two main forms:

1. Ordinary Limited Partnership – considered a private company, with no division of shares.
2. Limited Partnership Divided into Shares – classified as a capital company, more formal in structure, and closer to a Joint Stock Company.

Partner Roles & Liability

• Active Partners (Komandite):
  • Must be real persons only.
  • Carry unlimited personal liability for company debts.
  • Manage and represent the company.
• Dormant Partners (Komanditer):
  • Can be real or legal persons.
  • Liability is limited to the capital they commit.
  • Cannot participate in management.

This dual structure allows some partners to invest capital without exposing themselves to unlimited liability.

Capital & Establishment Rules

• Minimum Capital: No mandatory threshold for ordinary partnerships.
• Divided into Shares: If structured as a “limited partnership divided into shares,” the rules of capital companies (like A.Ş.) apply.
• Founders: At least two partners (one active and one dormant) are required.
• Agreement: A written company agreement must clearly identify partner roles, capital contributions, and management rights.

See the full paperwork breakdown in Documents for Company Registration in Turkey.

Management & Governance

• Active partners are responsible for management, similar to collective companies.
• Dormant partners do not have management rights but retain financial rights (profit share).
• Management powers can be distributed among active partners via the company agreement.

Advantages & Disadvantages

Advantages:

• Offers a balance between personal liability and limited risk capital.
• Suitable for family businesses or partnerships where some partners are passive investors.
• No strict capital requirement (unless divided into shares).

Disadvantages:

• Active partners’ unlimited liability deters many investors.
• Less flexible and less attractive for international expansion compared to Ltd. Şti. or A.Ş.
• Dormant partners have limited say in operations.

Comparison with Other Company Types

• Safer than Collective Company (since dormant partners’ liability is limited).
• Less flexible and scalable than Limited Company.
• Cannot compete with Joint Stock Company if aiming for capital raising or public listing.

Dissolution & Liquidation

Like other private companies, a limited partnership may be terminated by:

• Decision of partners,
• Expiry of the term in the company agreement,
• Bankruptcy of the company or an active partner.

Liquidation follows general partnership rules. For details see: Liquidation of a Company in Turkey.

Suitability for Foreign Investors

Foreign entrepreneurs typically avoid limited partnerships due to the unlimited liability imposed on active partners. Instead, they prefer the Limited Company (Ltd. Şti.) or the Joint Stock Company (A.Ş.), which offer liability protection and scalability.

Professional Legal Guidance

Because the liability balance between active and dormant partners can create disputes, drafting a precise company contract is essential. MFY Legal provides expert support in structuring, registering, and advising on limited partnerships under Turkish law.

Contact us today to discuss whether a Limited Partnership is the right choice for your business plans in Turkey.