Under Article 595 of the Turkish Commercial Code, a share transfer in a limited company (limited şirket) is valid only if there is a written transfer agreement, notarised signatures of the parties, and approval by the general assembly of partners. Unless the articles of association provide otherwise, the general assembly may refuse approval without giving reasons. After the transfer, the managers register the change with the trade registry and record it in the share ledger.

  • Form: Written agreement plus notarisation of signatures (TTK Art. 595/1). A simple private written agreement alone does not make a valid transfer.
  • Approval: Unless the articles provide otherwise, the general assembly's approval is required; the transfer becomes valid with that approval (Art. 595/2).
  • Time limit: If the general assembly does not refuse within three months of the application, approval is deemed given (Art. 595/7).
  • Registration: The managers apply to the trade registry; if they do not apply within 30 days, the departing partner may apply (Art. 598).
  • Prohibition or refusal: If the transfer is prohibited or approval is refused, the partner's right to withdraw from the company for just cause is preserved (Art. 595/5).

Why does a share transfer differ from that in a joint-stock company?

A limited company rests more heavily on personal trust between partners. Its capital shares therefore do not circulate as freely as joint-stock shares; the law requires both a formal form and approval by a company organ. The text of Law No. 6102 is available on mevzuat.gov.tr.

How is a share transfer carried out? Step by step

  1. Review the articles of association. Check whether transfer is prohibited, whether a special quorum is required, and whether there are pre-emption, buy-back or purchase rights, additional payment obligations or ancillary performance obligations.
  2. Draft the transfer agreement. State the number, nominal value and price of the shares and any additional payment, ancillary obligation, non-compete and contractual penalty terms. The law requires aggravated ancillary obligations to be repeated in the transfer agreement (Art. 595/1).
  3. Notarise the signatures. The parties have their signatures notarised. This applies to the transfer itself and to transactions creating the obligation to transfer.
  4. Obtain general assembly approval. The transferor or transferee applies to the company. Unless the articles provide otherwise, general assembly resolutions are passed by an absolute majority of the votes represented at the meeting (Art. 620/1).
  5. Registration and share ledger. The managers apply to the trade registry (Art. 598/1), and the change is recorded in the company's share ledger (Art. 594).

Is the transfer valid without general assembly approval?

No. Unless the articles provide otherwise, a transfer is valid only with the general assembly's approval (Art. 595/2). A contract merely signed before a notary does not give the buyer partner status towards the company. Unless the articles say otherwise, the general assembly may refuse approval without giving reasons (Art. 595/3), and the articles may prohibit transfer altogether (Art. 595/4).

Where additional payment or ancillary obligations exist, and the transferee's solvency is doubtful and the requested security is not provided, the general assembly may refuse approval even if the articles are silent (Art. 595/6).

Within what period must the general assembly decide?

If the general assembly does not refuse within three months of the application, approval is deemed given (Art. 595/7). It is therefore important that the date of the application can be proven; in practice applications are commonly made through a notary or by registered mail.

What can a partner do if transfer is prohibited or approval is refused?

If the articles prohibit transfer or the general assembly refuses approval, the partner's right to withdraw from the company for just cause is preserved (Art. 595/5). Where just causes exist, any partner may sue for an order to leave the company; during the proceedings the court may freeze some or all of the claimant's rights and obligations or order other measures (Art. 638/2). A departing partner may claim the exit compensation (ayrılma akçesi) corresponding to the real value of the share (Art. 641/1). For general information on challenging general assembly decisions, see our article on annulment of general assembly and board decisions.

When does a share pass without the company's approval?

Where a share passes by inheritance, under matrimonial property regime rules or by enforcement, all rights and obligations pass to the acquirer without general assembly approval (Art. 596/1). However, within three months of learning of the acquisition the company may refuse to approve the acquirer, provided it offers to take over the share at its real value for its own account, for a partner's account or for a third party's account (Art. 596/2). Without an express written refusal within three months, approval is deemed given (Art. 596/4). See also our article on spouses' inheritance shares and the matrimonial property regime.

How is the real value determined?

Where the law or the articles provide that the price is the real value and the parties cannot agree, the commercial court of first instance at the company's seat determines it upon request of either party; its decision is final (Art. 597).

How is registration made and why does it matter?

The managers apply to the trade registry to register share transfers. If no application is made within thirty days, the departing partner may apply to have their name deleted in respect of these shares; the registrar then gives the company a period to disclose the acquirer's name (Art. 598/2). A good-faith person who relies on the registry is protected (Art. 598/3). Registration usually requires the notarised transfer agreement and the general assembly resolution; the exact list of documents should be confirmed with the registry.

What majority is needed to restrict transferability?

Restricting, prohibiting or facilitating the transfer of capital shares is among the important decisions subject to an aggravated quorum: at least two thirds of the votes represented and an absolute majority of the whole share capital carrying voting rights (Art. 621/1-c). Approving an individual transfer requires only an absolute majority unless the articles set another quorum.

Can shares be transferred to a foreign person or company?

The form and approval requirements of the TTK apply equally to transfers to foreign persons. For information on foreign-owned companies, see how foreigners set up a company in Türkiye. Any sector-specific permits or notification duties should be checked separately.

What should be considered in the transfer agreement?

The agreement should state clearly the number, nominal value and price of the shares. If the articles provide for additional payments, ancillary obligations, non-compete, pre-emption, buy-back or purchase rights, these must also be stated in the transfer agreement (Art. 595/1). Omitting them may later cause disputes over the obligations with which the transferee became a partner. The parties may also regulate the payment date and the fate of the agreement if approval is not obtained; such terms are subject to general rules and freedom of contract.

What if a share belongs to several persons or is subject to usufruct or pledge?

If a share belongs to several persons, they are jointly and severally liable to the company for additional payment and ancillary obligations under the articles and may exercise their rights only through a common representative (Art. 599). The transfer rules apply to establishing a usufruct over a share (Art. 600/1). The articles may also make the creation of a pledge subject to general assembly approval; the general assembly may then withhold approval only for just cause (Art. 600/2). The articles should therefore be checked before offering a share as security.

Transfer price and the prohibition on returning capital contributions

Except for a capital reduction, partners cannot be refunded the price of their capital share nor released from that debt (Art. 601). The price paid in a share transfer is a purchase price between transferee and transferor, not a repayment from the company's capital. A company's acquisition of its own shares is separately restricted (Art. 612).

Frequently Asked Questions

Is a notary required for a share transfer in a limited company?

Yes. The agreement must be in writing and the parties' signatures must be notarised (TTK Art. 595/1).

Do the other partners have to approve?

Unless the articles provide otherwise, the general assembly must approve and may refuse without giving reasons (Art. 595/2-3).

What if the general assembly does not respond?

If no refusal is made within three months of the application, approval is deemed given (Art. 595/7).

When is the transfer registered with the trade registry?

The managers apply for registration; if they do not apply within thirty days, the departing partner may also apply (Art. 598).

How do heirs take over shares?

No general assembly approval is needed, but the company may refuse within three months by offering to take over the share at its real value (Art. 596).

Can a partner leave the company if transfer is blocked?

Yes. If transfer is prohibited or approval refused, the right to withdraw for just cause is preserved (Art. 595/5, Art. 638).