Liquidation of a Company in Turkey | Process & Legal Requirements

What is Company Liquidation?

Liquidation is the legal process of closing a company in Turkey, involving the settlement of debts, collection of receivables, sale of assets, and final distribution of remaining value to shareholders.

A company may be liquidated voluntarily by its shareholders or compulsorily (e.g., through bankruptcy).

During liquidation, the company continues to exist as a legal entity but adds the phrase “in liquidation” to its trade name.

Legal Grounds for Liquidation

A company may enter liquidation if:

• A shareholder resolution is passed,
• A legal ground for termination under the Turkish Commercial Code (TCC) arises,
• The company is bankrupt.

Related reading: Share Transfer in Turkish Companies.

Liquidation Officers

• At least one liquidation officer must be appointed.
• They may be named in the articles of association, elected by the General Assembly, or otherwise the Board of Directors assumes the role.
• Eligibility: At least one liquidation officer must be a Turkish citizen and resident.
• Officers must be registered and announced in the Trade Registry Gazette.

Step-by-Step Liquidation Process

1. Decision & Registration
   • Shareholder resolution or court order is registered with the Trade Registry.
   • Company name is updated to include “in liquidation”.
2. Notification to Creditors
   • Known creditors are contacted by registered mail.
   • Unknown creditors are notified via three announcements in the Turkish Trade Registry Gazette (every two weeks).
3. Settlement of Obligations
   • Collect receivables, sell company assets, and pay debts.
   • Prepare annual financial statements and liquidation balance sheets.
4. Distribution of Assets
   • After debts are paid, remaining assets are distributed to shareholders in proportion to their paid-in capital and privileges.
   • Distribution cannot occur until six months after the final creditor announcement.
5. Closure & Deregistration
   • Once liquidation ends, officers apply to delete the company from the trade registry.
   • The company ceases to exist as a legal entity.

See also: Steps to Establish a Company in Turkey.

Bankruptcy Liquidation

In case of bankruptcy, liquidation is carried out by the bankruptcy administration in accordance with the Enforcement and Bankruptcy Law.

Foreign Investor Considerations

• Liquidation may trigger tax audits and require clearance from the Tax Office and Social Security Institution.
• Cross-border companies must also consider foreign reporting obligations.
• Proper legal guidance ensures faster deregistration and protection against unexpected claims.

Key Takeaways

• A company remains legally active during liquidation until final deregistration.
• Creditors must be notified both directly and via registry announcements.
• Asset distribution is delayed until at least six months after the last creditor notice.
• Liquidation officers play a crucial role and must be registered.

More about governance during liquidation: Company Audit in Turkey.

Professional Legal Guidance

MFY Legal provides end-to-end assistance in liquidation — from preparing shareholder resolutions to creditor notifications, asset settlement, and final deregistration.

Contact us today for legal guidance on liquidating your company in Turkey.