Mergers, Demergers, Changes of Legal Form and Acquisitions in 169 Questions — Attorney Aylin Esra Eren

According to the Turkish Commercial Code, merger is carried out with two basic methods:

* Merger by acquisition: The acquisition of one or more companies by another company. * Merger by new formation: The termination of more than one company to form a new company.

In both methods, legal procedures must be fulfilled.

No. The types of companies that can participate in a merger are determined in Article 137 of the TCC. There are different merger opportunities and limitations regarding capital companies, partnerships, and cooperatives.

The acquiring company is the company that takes over the assets of the other company as a result of the merger and continues its legal existence. The shareholders of the transferred company may become shareholders of the acquiring company under the conditions determined in the merger agreement.

In a merger by acquisition, the transferred company terminates without liquidation. Its assets pass to the acquiring company as a whole. This transaction is not a company liquidation in the classical sense.

The companies participating in the merger join to form a new company. The establishment of the new company and the merger transaction are carried out according to the procedures stipulated in the law. The companies participating in the merger terminate without liquidation.

With the registration of the merger, the assets of the transferred company, together with its assets and liabilities, pass to the acquiring company in the way stipulated by law. This transfer, unlike the sale of individual assets, is based on the principle of universal legal succession.

No. A merger does not automatically eliminate the debts of the transferred company. The debts pass to the acquiring company within the framework of the legal merger provisions. For this reason, pre-merger debt review is of critical importance.

Lawsuits to which the merging company is a party are evaluated within the framework of the legal consequences of the merger and procedural provisions. The termination of the company does not mean that the dispute disappears spontaneously; legal succession and party change processes are taken into account.

Every merger does not necessarily require the change of the trade name. The trade name of the acquiring company can be preserved or changed in accordance with the legislation. In a merger through new establishment, the trade name of the new company is determined.

The merger agreement is the legal document regulating the merger conditions of the companies participating in the merger, share exchange ratios, shareholders' rights, and other essential elements of the merger. It must be prepared in compliance with the form and content requirements stipulated by the law.

The trade names, types, and headquarters of the companies; the share exchange ratio; the rights to be granted to shareholders; the effect of the merger on accounts and other necessary information must be included in the merger agreement. Article 146 of the TCC constitutes the fundamental regulation in terms of content.

Yes. The merger agreement must be drawn up in writing and approved by the authorized bodies stipulated in the law. Deficiencies in the form and decision-making process may create a risk regarding the validity of the merger.

The merger report is the document explaining the legal and economic justifications of the merger and its potential effects on shareholders and other interested parties. It is an important information tool for shareholders to make an informed decision.

Subjects such as the purpose of the merger, its legal and economic justifications, the method of determining the share exchange ratio, the rights to be granted to shareholders, and the effects of the merger on employees must be explained. The scope of the report is determined according to legal regulations.

Company valuation plays a fundamental role in determining the merger ratio and the shares to be given to shareholders. An erroneous or unrealistic valuation may create economic imbalance among shareholders and subsequent legal disputes.

The merger ratio is determined by taking into account the economic values of the companies participating in the merger and the rights of the shareholders. The valuation methods, financial data, and assumptions used must be justifiable and auditable.

Depending on the type and legal structure of the merger, granting shares to shareholders in the acquiring or newly established company is the fundamental method. However, special circumstances regulated in the law and provisions for simplified merger must also be evaluated.

Cash compensation is the mechanism regarding providing cash consideration instead of giving shares to the shareholders of the company participating in the merger, or together with shares under certain conditions, in cases permitted by the law. The relevant provisions of the TCC and transaction conditions must be taken into account.

Shareholders need to be able to understand the financial, legal, and managerial consequences of the merger. Information ensures that shareholders use their decision-making rights effectively and reduces potential disputes that may arise after the merger.

The merger agreement and the merger decision are approved by the authorized body according to the company type. In Turkish joint-stock and Turkish limited liability companies, the authority of the general assembly comes into play as a rule; legal exceptions and simplified merger regulations are reserved.

Yes. Regarding decisions related to the merger, special meeting and decision quorums are regulated in the TCC according to the company type and the nature of the transaction. The company's articles of association and relevant legal provisions must be examined together.

Creditors can request security if their claims are endangered due to the merger under the conditions stipulated by the law. The conditions and duration of the security request must be determined according to the specific case and the provisions of the TCC.

The merger does not mean the automatic termination of the employees' employment contracts. The continuation of employment relationships and the consequences of the change of employer are evaluated within the framework of the relevant provisions of the TCC and the regulations regarding workplace transfer under Labor Law No. 4857.

Employment contracts, wages and fringe benefits, unused leaves, severance pay and compensation in lieu of notice risks, ongoing labor lawsuits, collective labor agreements, and social security obligations must be examined.

No. The merger does not automatically eliminate tax debts. Tax consequences must be evaluated separately according to the nature of the transaction and the relevant tax legislation, primarily Corporate Tax Law No. 5520.

Not always. In terms of commercial law, the conditions and consequences of the concepts of merger, or transfer or merger in tax legislation, may differ. In order to benefit from tax advantages, the relevant legal conditions must also be met.

Within the scope of the merger, immovable properties can pass to the acquiring company within the framework of the principle of universal legal succession. However, the records in the land registry must be updated and the relevant registration procedures must be carried out.

Trademarks, patents, designs, copyrights, and similar rights are evaluated according to their legal nature and special registry regulations. It is important that the legal transition realized with the registration of the merger is reflected in the relevant registries and necessary notifications are made.

In full division, the entire assets of the company are transferred to existing or newly established companies. The divided company is terminated without liquidation upon the registration of the division.

In partial division, certain parts of the company's assets are transferred to other companies. The divided company continues its legal existence; the transferred parts of the assets pass to the relevant companies.

No. Pursuant to Article 160 of the TCC, there are limitations regarding company types in terms of division. Capital companies and cooperatives can participate in the division within the framework determined by the law.

Companies can separate different areas of activity from each other through division, manage risks, ensure specialization, or reorganize their corporate structures. The legal consequences as well as the economic justification of the transaction must be evaluated.

Assets are transferred according to the allocation principles determined in the division plan and division agreement. Which assets and liabilities will pass to which company must be shown in a clear, consistent, and auditable manner.

The division plan is the document that shows which parts of the divided company's assets will be transferred to which companies, and forms the basis of the division transaction. It must be prepared in compliance with the legal form and content requirements.

The division agreement regulates the agreement between the companies participating in the division. The division plan, on the other hand, reveals the allocation of assets and the structure of the transaction, especially in cases such as unilateral partial division. The type of document is determined according to the form of the division.

Which company debts are allocated to must be shown in the division documents. In addition, legal regulations regarding the protection of creditors and the responsibility of the companies participating in the division are also taken into account.

Responsibility is evaluated within the framework of division documents, the nature of the debt, and the provisions of the TCC regarding the protection of creditors. Division does not eliminate the application possibilities arising from the law for creditors.

In which companies and at what rate the shareholders will hold shares after the division is determined according to the division structure and division documents. It is important that the share distribution is fair and compatible with economic reality.

Cash payment or equalization mechanisms may come into play in the division transaction under conditions permitted by the law. The limits and rates of this opportunity must be evaluated according to the relevant TCC provisions.

If the transfer of the workplace or a part of the workplace is at stake within the scope of the division, the employment relations of the employees are evaluated within the framework of the relevant provisions of the Labor Law. The rights of the employees must be protected and employer responsibilities must be determined.

Credit, lease, supply, distributorship, license, service, employment, insurance, and guarantee contracts must be examined. There may be provisions prohibiting transfer, permission requirements, change of control, or early termination in the contracts.

An automatic transition assumption cannot be made for every license and permit. The legislation specific to the relevant activity, the nature of the license, and the approval or notification conditions of administrative authorities must be examined separately.

Which company the immovable properties are allocated to must be clearly shown in the division documents. Land registry records must be updated, encumbrances must be examined, and special registry procedures must be completed.

A division can lead to the distribution of debts and assets to different companies. Therefore, it is necessary to protect the possibilities of creditors to collect their receivables and to operate legal guarantee mechanisms.

If Articles 134 to 190 of the Turkish Commercial Code are infringed, an action for annulment may be brought under the conditions in Article 192. Standing to sue, recording a dissent in the minutes and the two-month period are important.

The court may grant time to the parties to remedy certain deficiencies within the framework of Article 192 of the TCC. If the legal defect cannot be remedied, the annulment of the transaction and necessary measures may arise.

No. Division is a structural restructuring transaction specifically regulated in the TCC. Asset sale, as a rule, is based on the transfer of certain assets by contract. Its legal consequences and rules regarding the protection of creditors are different.

As a rule, no. Type change is based on the principle of the continuation of the legal identity of the company. The company is not established as a new legal personality; the existing company continues with its new type.

Documents required by law and trade registry practice must be prepared, notably the type change plan, type change report, articles of association or company contract appropriate to the new company type, financial statements, and authorized body resolutions.

The type change plan is the document that sets out which new type the company will transition to from its current type, the new company structure, and the basic conditions of this transformation. It is prepared within the framework of Article 185 of the TCC and related provisions.

The type change report explains the legal and economic justifications of the transaction, its effect on the rights of shareholders, and the consequences of the new company structure. It aims to ensure that shareholders have sufficient information in the decision-making process.

Shareholders' shares in the new company type are determined within the framework of the law and type change documents. The protection of share ratios and economic rights is among the fundamental issues to be considered in the transaction.

Yes. Converting between partnerships and companies with share capital may have important consequences for the participants’ liability. The Turkish Commercial Code’s specific provisions on existing debts and obligations from earlier periods must be examined.

As a rule, since type change is based on the principle of the continuation of legal personality, existing contracts do not automatically terminate. However, it must be examined whether there are special provisions in the contracts due to company type, change of control, or restructuring.

Yes. Type change does not eliminate the rights of creditors. The provisions of the TCC regarding the protection of creditors and special regulations concerning the liability regime of shareholders must be taken into account.

Type change, as a rule, is in the nature of the continuation of legal personality. Nevertheless, update requirements regarding tax office records, notifications, and related administrative procedures must also be checked.

Yes. Registration in the trade registry is of fundamental importance for the type change transaction to take effect and produce consequences. The process is not considered legally completed until the relevant registration and announcement procedures are completed.

The decision is made by the authorized body according to the company type and relevant legal regulations. The general assembly or board of partners resolution must be duly made.

Shareholders can express their opinions within the framework of legal conditions and remain opposed to the decision. Recording the opposition in the minutes may be important in terms of the annulment lawsuit regulated in Article 192 of the TCC.

Yes. If the conditions foreseen in Article 192 of the TCC occur, an annulment lawsuit can be filed against the type change decision. The period, plaintiff capacity, and recording of the opposition must be carefully evaluated.

In type change, the legal personality of the company continues under the new type. In liquidation, however, the process of the company's termination begins; assets are converted into cash, debts are paid, and the remaining value is distributed to shareholders.

The possibility of type change must be evaluated within the framework of the company's legal status and the relevant limitations of the TCC. Legal obstacles and options such as revoking liquidation must be additionally examined for companies in liquidation.

In this regard, the financial status of the company, Article 376 of the TCC, and related type change provisions must be evaluated together. Especially in companies with overindebtedness or severe capital loss, a comprehensive legal and financial review must be conducted before the transaction.

Failure to adequately evaluate shareholders' rights, creditors' interests, and the ongoing obligations of the company can create significant risks. In addition, registration, decision quorum, and document deficiencies can also affect the validity of the transaction.

Company acquisition is the acquisition of control or certain economic assets through another company acquiring shares or the business of a company. The legal structure of the transaction can be established in the form of share transfer or asset transfer.

In share transfer, the legal personality and assets of the company remain within the same company; only the share ownership changes. In a merger, however, the assets of the companies are transferred as a whole within the framework of statutory merger provisions.

Legal review uncovers the target company's debts, contracts, lawsuits, licenses, employee relations, partnership structure, and potential liabilities. It ensures that the buyer makes an informed decision before the transaction.

Due diligence is the systematic examination of the legal, financial, tax, commercial, and operational status of the target company before a company purchase or merger. In Turkish practice, it is frequently expressed as "legal and financial review" or "status assessment."

Articles of association, trade registry records, share ledger, management and general assembly resolutions, contracts, lawsuit files, enforcement proceedings, licenses, intellectual property records, employment contracts, and collateral documents must be reviewed.

Commercial books, bank records, tax returns, contracts, lawsuit and enforcement files, employee receivables, and third-party claims must be examined together. In addition, obtaining comprehensive representations and warranties from the seller can be considered.

Purchase price, payment schedule, closing conditions, representations and warranties, indemnity provisions, non-compete clause, confidentiality, liability limits, and dispute resolution mechanisms must be carefully regulated.

Representations and warranties are contractual guarantees given by the seller regarding certain legal and financial characteristics of the target company. In the event of a false statement or breach of warranty, the legal consequences foreseen in the contract may arise.

Closing conditions are prerequisites that must occur beforehand for the transaction to be completed. For example, obtaining necessary administrative permissions, securing third-party approvals, or keeping certain contracts in effect can be regulated within this scope.

Yes. If the transaction meets the conditions in the Law No. 4054 on the Protection of Competition and related secondary regulations, the notification and approval process to the Competition Board may arise. The notification obligation must be evaluated based on the nature of the transaction parties and relevant thresholds.

Yes. If mergers and acquisitions exceed certain thresholds or are subject to approval under the relevant legislation, Competition Board review is required. It must be checked whether there is a notification obligation before the transaction is completed.

If the transaction is subject to the obligation of clearance, implementing the transaction without obtaining clearance creates legal risk. The necessity of clearance and the transaction schedule must be evaluated in terms of competition law before signing the contract.

The number of employees, employment contracts, wages and fringe benefits, severance liabilities, labor lawsuits, occupational health and safety records, and social security debts must be examined. The effects of business transfer and share transfer on employment relationships must be distinguished from each other.

The same conclusion cannot be reached for every contract. In share transfer, the company that is a party to the contract continues as the same legal entity; however, change of control provisions may give rise to contract termination or the necessity of approval. In business or asset transfer, rules regarding the transfer of contracts must also be examined.

Land registry records, mortgages, attachments, easements, rental relationships, zoning status, construction permits, and other restrictions on the real estate must be examined. The factual and legal status of the real estate must be compared.

The subject matter of the lawsuit files, claim amount, procedural stage, evidence status, potential financial outcomes, and enforceable decisions must be examined. This evaluation may affect the acquisition price and contractual risk allocation.

Yes. Provisions limiting the seller from competing with the target company within a certain period and geographical area may arise to the extent that they are connected and proportionate to the transaction. Duration, scope, and market effects must be evaluated under competition law.

If mechanisms such as price adjustment, closing accounts, net debt, or working capital adjustments have been agreed upon in the contract, the price may change according to these provisions. In case of a dispute, the interpretation of the contract and the calculation method are important.

The seller's liability may continue within the framework of the representations and warranties, indemnity provisions, and liability periods included in the contract. In addition, statutory liabilities are also evaluated according to the characteristics of the specific case.

A confidentiality agreement ensures the protection of financial, commercial, technical, and strategic information shared during the review process. It helps prevent information from being used outside its purpose or disclosed to unauthorized persons.

Corporate restructuring is the modification of the legal, financial, or organizational structure of a business in order to increase sustainability and carry out its activities more effectively. Mergers, spin-offs, type changes, capital transactions, and debt restructuring can be evaluated within this scope.

Financial difficulties, growth targets, separation of activity areas, partnership disputes, the need for efficiency, or new investment plans may necessitate restructuring.

Depending on the situation of the company, debt restructuring, capital increase, asset sale, merger, spin-off, concordat, or other legal mechanisms can be evaluated. The most appropriate option should be determined by examining the company's financial data and creditor structure.

No. A concordat is a mechanism aimed at reaching a legal settlement between a debtor experiencing difficulties in paying their debts and their creditors. A merger, on the other hand, is a restructuring transaction that enables companies to come together structurally.

Contractual solutions such as maturity extension, installment payments, or readjustment of interest or collateral conditions can be developed with creditors. Legal processes such as concordat may also arise if the conditions are met.

The share ratios, voting rights, information rights, and economic interests of company members (shareholders) must be clearly regulated in the transaction documents. In transactions such as capital increase, share exchange, or merger, the statutory rights of company members (shareholders) must be observed.

Yes. Taking a restructuring decision does not eliminate the managers' obligations of care, loyalty, supervision, and legal duties. Especially in periods of financial difficulty, protecting the interests of the company and creditors gains importance.

Conducting deficient due diligence, incorrect valuation, insufficient information of company members (shareholders), neglecting procedures regarding the protection of creditors, failure to obtain necessary permits, and errors in registration documents are frequently encountered risks.

The lawyer ensures the legal security of the process, from determining the transaction structure to preparing contracts, from protecting the rights of company members (shareholders) and creditors to trade registry procedures and evaluating necessary administrative permits. They also contribute to the prevention of potential post-transaction disputes.

These transactions should not be viewed merely as commercial decisions that change the organizational chart of companies. Each of them is comprehensive legal processes affecting the rights of company members (shareholders), creditors, employees, and third parties.

Therefore, a detailed legal and financial review should be conducted before the transaction; valuation, contracts, decision-making processes, protection of creditors, and registration procedures must be handled as a whole. A sound restructuring should not only meet today's commercial needs but also secure the company's future legal and economic sustainability.

"Company mergers, spin-offs, and type change transactions are important legal tools responding to the developing needs of commercial life. However, the success of these transactions does not depend solely on achieving economic goals. Protecting the rights of company members (shareholders), observing the interests of creditors, correctly evaluating the legal status of employees, and fully fulfilling legal procedures are equally important.

Especially in company purchase and acquisition transactions, conducting a comprehensive legal due diligence is decisive in preventing hidden debts and contractual risks that may arise in the future. In merger and restructuring processes, choosing the correct legal model, carefully planning every stage of the transaction, and obtaining necessary permits on time are required.

Permanent success in corporate law is possible not only by making the right commercial decision, but also by bringing this decision to life on a solid legal basis."

Attorney Aylin Esra Eren

Legal information note: This study is for general informational purposes. The legal and tax consequences of merger, spin-off, type change, and company takeover transactions may vary depending on the company type, transaction structure, partnership status, contracts, and relevant special legislation. Prior to concrete transactions, an additional legal and financial review must be conducted within the framework of current legislation.

In a merger by acquisition, one company takes over the assets of another company as a whole. The company members (shareholders) of the acquired company obtain the shares and rights of the acquiring company in accordance with the conditions stipulated in the merger agreement and the law.

The purpose of a merger is not merely the legal coming together of companies. Creating economies of scale, increasing financing power, expanding activity areas, providing a competitive advantage, and supporting corporate sustainability are among the primary justifications for merger decisions.

Financial statements enable the evaluation of companies' assets, debts, equity, and financial performance. Revealing the true financial situation of companies during the merger process is of critical importance in terms of soundly determining share exchange ratios and transaction conditions.

The share exchange ratio is determined by taking into account the values of the companies participating in the merger and the rights to be granted to company members (shareholders). The financial structure, assets, debts, income potential, and other economic elements of the companies must be evaluated.

An incorrectly determined share exchange ratio can create economic imbalance among the company members (shareholders) of the companies participating in the merger. This situation may lead to claims of violation of company members' (shareholders') rights, legal disputes regarding merger decisions, and liability claims when conditions are met.

The balancing amount refers to the additional cash payment that can be granted to company members (shareholders) in addition to the share exchange ratio. This payment must be determined within the framework of the limits and conditions stipulated in the law.

Yes. Depending on the structure of the merger, the acquiring company may need to make a capital increase. Capital transactions must be carried out in compliance with the merger documents and legal provisions regarding the relevant company type.

Unanimity is not required in every merger transaction. Decision quorums are determined according to the company type, articles of association or company agreement, and applicable legal regulations.

Yes. Company members (shareholders) have the right to examine the documents stipulated in the law so that they can make a sound decision about the merger. The merger agreement, merger report, and relevant financial documents are important in this context.

The violation of the statutory examination and information rights of company members (shareholders) can create a problem regarding the legality of the merger process. Company management must fulfill legal obligations and ensure the active participation of company members (shareholders) in the decision-making process.

Yes. In order for the merger to produce legal consequences, the registration procedures stipulated in the law must be carried out. The registration process is conducted according to the type of merger and the registry records of the relevant companies.

The legal consequences of a merger arise within the framework of the registration and effectiveness provisions stipulated in the Turkish Commercial Code. Registration is the fundamental legal stage in terms of the termination of the acquired company and the transfer of its assets.

No. As a result of the merger, the assets and debts of the acquired company pass to the acquiring company pursuant to legal provisions. Creditors' rights do not automatically disappear due to the merger.

Lawsuits and enforcement proceedings to which the acquired company is a party continue within the framework of the legal consequences of the merger, which has the nature of universal succession. In terms of procedural transactions, necessary party and representation updates must be made in the relevant court and enforcement files.

As a rule, the contractual relationships of the acquired company are transferred to the acquiring company within the scope of the legal consequences of the merger. However, special provisions in contracts, performance obligations tied to a specific person, and limitations arising from legislation must be examined separately.

The legal continuity of the employment relationship and the provisions on workplace transfer are important due to the merger. In terms of seniority, notice, and other employment receivables, it must be examined whether the employment contract has terminated, the length of service, and the applicable labor law provisions.

The same legal consequence does not apply to every license and permit. The special legislation regarding the field of activity, the nature of the permit document, and the administration's approval conditions must be examined. Especially in regulated sectors, it is important to conduct a pre-merger permit evaluation.

Enforcement proceedings concerning the acquired company are continued by taking into account the legal consequences of the merger. It is necessary to document the succession status of the acquiring company in the enforcement files and to carry out the necessary procedural transactions.

Yes. Management bodies are subject to legal obligations regarding the preparation of merger documents, the provision of accurate information, and the protection of the rights of shareholders and creditors. Faulty and unlawful transactions may give rise to liability when conditions are met.

Legal due diligence reveals the company's contracts, debts, lawsuits, employment relations, licenses, intellectual property rights, and compliance status with legislation. This review reduces the risk of encountering unexpected liabilities after the merger.

Companies may demerge to separate different fields of activity, manage risks, direct investors to specific business lines, or increase organizational efficiency. Demerger can be a restructuring tool suited to the company's strategic goals.

In demerger transactions involving the transfer of a company's assets to another company, a demerger agreement is prepared according to the structure of the transaction. Cases where a single company establishes a demerger plan within itself and transactions involving multiple companies may differ legally.

Asset elements must be shown clearly and unambiguously in the demerger plan or agreement. It must be carefully determined which company will receive real estate, receivables, debts, contracts, intellectual rights, and other assets.

To which company the debts are allocated is regulated in the demerger plan or agreement. However, this allocation does not eliminate creditors' rights arising from the law in any case. Liability and collateral provisions must be evaluated separately.

As a result of the demerger, the shareholding structure of the shareholders may change. In which company, at what ratio, and with what rights shareholders will be given shares is determined in the demerger documents. It is important to protect the economic balance among shareholders during the allocation of shares.

The demerger transaction is subject to the approval of the authorized company body according to the company type and applicable legal provisions. It is necessary to take a general assembly resolution, provide the required decision quorums, and complete the registration stages.

Demerger cannot be carried out in a way that weakens creditors' existing rights. Within the scope of legal regulations, it is envisaged that creditors are informed, can request collateral when necessary, and can benefit from liability provisions under certain conditions.

The allocation of debts is shown in the demerger documents. However, there are provisions in the Turkish Commercial Code regarding the joint and several liability of companies participating in the demerger under certain conditions. In the specific case, the nature of the debt and the conditions of legal liability must be examined together.

The transfer of a workplace or a business department to another company within the scope of the demerger may bring up workplace transfer provisions. Employees' contracts, rights, and the employer's liability must be evaluated within the framework of the Labor Law.

The transfer of contracts is examined by taking into account the demerger documents and relevant contract provisions. Performance obligations tied to a specific person, provisions requiring the consent of the other party, and special legislative limitations must be evaluated separately.

The effect of the registration of the demerger on real estate is evaluated within the framework of the Turkish Commercial Code and relevant registry legislation. It may be necessary to update the records in the land registry and submit the required documents.

Yes. The tax consequences of the demerger depend on the type of transaction and the conditions required in tax legislation. Corporate tax, VAT, stamp tax, and other financial liabilities must be evaluated expertly before the transaction.

Whether licenses and permits will be transferred to the new company is determined according to the relevant special legislation. The transferability of permits, the necessity of administrative approval, and activity conditions must be researched before the demerger.

Deficient or erroneous asset allocation can lead to disputes between companies and affect the rights of creditors. Therefore, conducting a detailed financial and legal review in the preparation of demerger documents is important.

In case of unlawfulness of merger and demerger decisions, cancellation or other legal remedy paths foreseen in the law may arise according to the conditions of the specific case. The right of application, deadlines, and the competent court must also be examined.

For a successful demerger, assets and debts must be correctly determined, the rights of employees and creditors must be protected, contracts must be reviewed, and tax consequences must be evaluated. The demerger plan must be prepared in a way that also takes into account the company's future activity structure.

Companies may change their type due to growth targets, investment needs, partnership structure, capital requirements, or corporate governance needs. For instance, a joint-stock company structure can provide different opportunities in terms of investor acceptance and share transfer.

How the shareholders' existing shares and financial rights will continue in the new company type must be shown in the type change plan. Provisions that may cause changes in the value of shares or shareholders' rights must comply with the law.

The type change decision is taken by the body authorized by law regarding the relevant company type. Decision quorums and transaction documents are determined according to the company's type and the applicable legislation.

Type change produces legal consequences with the completion of the registration and other procedural conditions foreseen in the law. Trade registry transactions ensure that the new type of the company and the associated articles of association or company contract are recorded.

Share purchase is the transfer of all or part of the shares owned by the shareholders of a company to the buyer. The buyer obtains partnership or control opportunities over the company based on the share ratio acquired and the rights attached to the shares.

In a share transfer, the company's partnership structure changes; the company's legal personality and assets remain the same as a rule. In a business transfer, specific asset elements, contracts, and liabilities belonging to the business are transferred within the framework of legal conditions.

Legal due diligence reveals the target company's debts, ongoing lawsuits, contracts, employee relations, licenses, intellectual property rights, and compliance status with legislation. This study enables the buyer to see risks before the transaction and determine acquisition conditions accordingly.

Due diligence is the systematic examination of the legal, financial, tax, and operational status of the target company prior to a company acquisition or investment transaction. The purpose is to identify hidden liabilities, legal risks, and elements that may affect the transaction value.

Representations and warranties provisions regulate the seller's making certain statements about the legal and financial status of the target company and assuming contractual liability regarding the accuracy of these statements. These provisions help protect the buyer against risks that cannot be identified prior to the transaction.

Indemnity provisions regulate the liability of the parties in case the statements specified in the contract are untrue or certain obligations are breached. The scope, limits, method of claim, and time limits of the indemnity must be clearly determined.

Certain merger and acquisition transactions may be subject to the permission of the Competition Board within the framework of the change of control, transaction type, and turnover criteria determined in the relevant legislation. It cannot be said that permission is required for every transaction; current thresholds and transaction conditions must be separately checked on the transaction date.

In an asset transfer, the buyer acquires not the shares of the target company, but specific assets or its business. The scope of the assets to be transferred, the status of debts, contracts, and necessary registry procedures must be regulated separately.

A business transfer is the transfer of a business or a department of a business possessing economic integrity to another person or company. Depending on the scope of the transaction, different legal consequences may arise regarding the commercial enterprise, assets, contracts, and employee relations.

The responsibility for debts in a business transfer is determined within the framework of the provisions of the Turkish Code of Obligations regarding the transfer of a business and relevant special regulations. The debt-sharing made between the parties in the transfer agreement must be evaluated separately from the legal liabilities that may arise against creditors.

In the event of the transfer of a workplace or a department thereof, the workplace transfer provisions of Article 6 of the Labor Law come into effect. Employment contracts, periods of service, and the responsibilities of the transferor and the transferee are evaluated within the framework of the relevant legal conditions.

It cannot be said that an automatic transfer result occurs for every contract. The nature of the contract, the will of the parties, transfer ban provisions, and regulations requiring the consent of the other party must be examined.

The transfer of trademark, patent, design, copyright, and other intellectual property rights must be carried out through a contract compliant with the relevant legislation and necessary registry procedures. The scope of the transfer must be clearly determined, and use licenses must be separated from the transfer of ownership.

To detect hidden liabilities, financial records, tax audits, lawsuit and enforcement files, employee receivables, guarantees, suretyships, and contractual obligations must be examined together. Representations, warranties, and indemnification provisions in the acquisition agreement are also important in managing these risks.

Share and management changes must be notified to the necessary registries, company organs must be restructured, signature authorities must be updated, and contracts and permits must be reviewed. In addition, post-closing obligations and contractual notifications must be followed up.

Restructuring is bringing the legal, financial, and organizational structure of the company into compliance with changing economic conditions or strategic goals. Capital transactions, debt restructuring, merger, division, conversion of company type, and business transfer can be evaluated within this scope.

Yes. Capital increase can be used to strengthen the company's equity, provide new investment, or improve its financial structure. The transaction must be carried out in compliance with the legal procedures regarding the company type and the method of capital increase.

Capital reduction may arise for purposes such as reorganizing the company's financial structure, covering balance sheet losses, or reducing idle capital. However, provisions regarding the protection of creditors and the principle of capital maintenance must be observed.

Yes. Capital reduction can affect the company's financial structure, which is important for creditors. Therefore, special procedures for the protection of creditors are stipulated in the law. Capital reduction cannot be carried out in a way that violates the rights of creditors.

Yes. The company can rearrange the maturity, payment plan, or other conditions of its debts by reaching an agreement with its creditors. The validity of the restructuring depends on the lawful expression of the relevant contracts and the will of the creditors.

No. Debt restructuring is an arrangement that can be carried out contractually between the company and its creditors. A concordat, on the other hand, is a legal process specifically regulated in the Enforcement and Bankruptcy Law, subject to court supervision and legal conditions.

In the presence of the conditions stipulated in the law, debtors who cannot pay their debts on time or are under the threat of being unable to pay can request a concordat. The acceptance of the application and the continuation of the process depend on the court's and the concordat mechanism's evaluation of the legal conditions.

Restructuring in a group of companies can be carried out through the merger of affiliates, separation of fields of activity, share transfers, business transfers, or capital transactions. It must not be forgotten that each company has a separate legal entity and management responsibility.

Yes. Asset transfers, service contracts, financing relationships, and other transactions between group companies can be examined in terms of corporate law, tax law, and competition law. The compliance of the transactions with the company's interest and the liability of the relevant parties are important.

Management organs are responsible for ensuring that restructuring decisions are taken in accordance with the company's interest, based on law and based on necessary information. The company's financial status, creditors' rights, and shareholders' interests must be observed.

Depending on the nature of the transaction and the severity of the violation, the cancellation of decisions, compensation liability, or other legal consequences may arise. In each dispute, the relevant legal regulations, application conditions, and time limits must be evaluated separately.

Yes. The presence of untrue, incomplete, or misleading information in transaction documents may cause shareholders, creditors, or other interested parties to suffer damage. In the presence of liability conditions such as fault, damage, and adequate causal link, the legal liability of the relevant persons may arise.

The tax consequences of merger transactions can directly affect the financial structure of the companies and the economic efficiency of the transaction. Corporate tax, VAT, transfer transactions, and other financial obligations must be evaluated before the transaction.

The trade registry ensures the disclosure of the legal status and structural changes of companies with respect to third parties. The registration of merger, division, and type conversion transactions is among the fundamental stages in terms of the realization of the legal consequences stipulated in the law.

Mergers and acquisitions can give rise to risks such as significantly reducing competition in the relevant market or strengthening a dominant position. Depending on the nature of the transaction, Competition Authority approval, notification obligation, or other competition law evaluations may be required.

In the acquisition agreement, the subject matter of the transaction, price, payment terms, closing conditions, statements of the parties, liability limits, and dispute resolution method must be clearly regulated. Avoiding ambiguous expressions and reflecting the legal due diligence into the contract reduce the risk of disputes.

Restructuring can have an impact on employees, customers, suppliers, financial institutions, and investors. Conducting the process in compliance with the law, transparently and in a planned manner, contributes to the protection of the company's commercial reliability.

A lawyer can take part in the stages of determining the transaction structure, legal due diligence, drafting contracts, evaluating partnership and creditor rights, examining necessary permits, and managing the registration process. Legal consultancy ensures the pre-determination of transaction risks and the protection of the parties' rights.

Conducting insufficient due diligence, incomplete identification of debts and contracts, ignoring the rights of shareholders, failing to evaluate obligations regarding employees, and failing to obtain necessary permits are among the main risks. In addition, neglecting the tax and competition law dimensions can also lead to significant consequences.

A successful restructuring depends on planning economic goals and legal security together. It is necessary to correctly identify the company's existing obligations, protect the rights of shareholders and creditors, prepare contracts completely, and complete legal procedures in a timely manner.

Mergers and acquisitions do not only change today's commercial structure; they also shape the company's future management, responsibilities, competitive power, and investment capacity. Therefore, every transaction must be carried out with a comprehensive legal and financial evaluation.

“Merger, acquisition, and restructuring transactions are among the most important tools of growth and corporate transformation in commercial life. However, the true success of these transactions cannot be measured solely by economic size or financial gain.

In merger and acquisition processes, it is of great importance to identify legal risks in advance, protect the rights of shareholders, safeguard the interests of creditors, and clearly regulate contractual obligations.

Particularly in company acquisitions, conducting a comprehensive legal due diligence is indispensable in terms of preventing serious disputes that may arise in the future. Corporate restructuring, when supported by the right legal strategy, can provide companies not only with a new organizational structure but also with a sustainable future.

The essence of company law is not merely to realize change, but to be able to manage change on the basis of legal security, corporate responsibility, and long-term strategy.”

Attorney Aylin Esra Eren

Legal information note: This study has been prepared for general legal information purposes. The provisions to be applied in company mergers, demergers, type conversions, and acquisition transactions may vary depending on the company type, transaction structure, articles of association or company contract, and the specific characteristics of the case. Separate evaluations must be made in terms of tax, competition, labor law, and sectoral regulations. In concrete transactions, current legislation and relevant administrative regulations must be taken as basis.