Capital Increase in a Turkish LLC: Procedure and Documents

The first decision in a Turkish LLC capital increase is not which form to file. It is where the new capital will come from. The company may use new cash, eligible amounts already held in equity, or a documented receivable owed to a shareholder. Each route needs different accounting evidence.

The increase also changes the company’s registered capital and share records. Ownership percentages change only if shareholders subscribe in different proportions or a new investor enters. Once the structure is agreed, the shareholders approve an amendment to the capital clause, the company submits it through MERSİS, and the Trade Registry registers and announces the change.

This guide covers an existing Turkish limited liability company (Ltd. Şti.). For capital at the incorporation stage, see our Turkish LLC setup guide.

Capital Increase at a Glance

• Current minimum capital: TRY 50,000 for an LLC and TRY 250,000 for a joint-stock company (JSC).
• Deadline for an existing undercapitalized LLC: December 31, 2026, unless the statutory period is extended.
• Cash payment: an LLC does not have the JSC’s 25% pre-registration payment requirement. Its subscribed cash may be paid within 24 months after registration.
• Accounting report: the required SMMM/YMM findings depend on whether the increase uses cash, internal resources, or a shareholder receivable.
• Registration period in Istanbul: the application is filed within 30 days of the shareholders’ decision.
• Competition Authority share: 0.04% of the registered increase amount.

These are national rules, but the filing package should be checked against the current list published by the Trade Registry handling the application. This guide uses Istanbul practice where a procedural example is needed.

Is the Increase Mandatory or Voluntary?

Minimum-capital compliance by December 31, 2026

The current statutory minimums have applied to newly incorporated companies since January 1, 2024. Turkish Commercial Code Temporary Article 15, added by Law No. 7511, gives an existing company below the new threshold until December 31, 2026 to increase its registered capital.

An LLC that remains below TRY 50,000 when the statutory period expires is deemed dissolved under the provision. This is the legal status created by the rule; any resulting registry, court, creditor, and liquidation steps must then be handled for the company concerned.

An increase made solely to reach the new minimum benefits from a special voting rule. There is no meeting quorum, the decision is taken by the majority of votes present, and privileges do not apply. The resolution should identify that it is being adopted under the temporary compliance provision.

The Ministry of Trade company FAQ confirms the current thresholds and deadline. Companies filing close to the deadline should check whether a presidential decision has extended it.

Voluntary capital increases

An LLC may increase capital to finance operations, strengthen equity, admit a new investor, alter ownership percentages, or convert an eligible shareholder receivable. These transactions follow the ordinary amendment and voting rules.

TTK Article 621 treats a capital increase as an important decision. Unless the articles lawfully set a higher threshold, approval requires at least two-thirds of the votes represented at the meeting and an absolute majority of the total voting capital. The special rule for minimum-capital compliance is an exception to this ordinary regime.

Choose the Capital Source

Cash contributed by shareholders

In a cash increase, one or more shareholders subscribe for new capital shares and undertake to pay money to the company. Existing cash capital commitments must first be checked. TTK Article 456, applied to an LLC through Article 590, generally prevents a new cash subscription increase while earlier cash commitments remain unpaid.

The payment rule is often confused with the rule for a JSC. Under TTK Article 585, the JSC provision requiring one quarter of cash capital before registration does not apply to an LLC. Cash subscribed for the LLC may be paid within 24 months after registration, and the payment terms should appear in the resolution and amended capital clause.

If cash has already been paid, the registry file includes the bank letter evidencing the payment. Otherwise, the company records and monitors the commitment after registration. The Ministry of Trade company information page explains the different LLC and JSC payment rules.

Use a clear bank-transfer description. The sender, company, payment purpose, capital commitment, shareholder ledger, and accounting entry should all refer to the same transaction.

Eligible internal resources

An internal-resources increase moves an eligible amount already held within equity into registered capital. Depending on the balance sheet and applicable tax rules, the source may include retained profits, eligible reserves, or capital-adjustment positive differences.

An equity balance is not automatically available for capitalization. The company must consider accumulated losses, legal restrictions, inflation-accounting treatment, and the origin of the account. The SMMM or YMM report identifies the source, confirms that it exists within the company, and reconciles it to the accounting records and a current balance sheet. For an entity subject to statutory audit, an auditor’s report may be available where the registry rules permit it.

Where cash and internal resources will be used together, the accountant should determine whether eligible internal funds must be capitalized at the same time. The answer depends on the accounts involved and the proposed structure.

A shareholder receivable

A shareholder may contribute a documented cash-loan receivable instead of transferring new funds. Such balances are often recorded in account 331 under the Turkish Uniform Chart of Accounts, but the ledger entry alone is not enough.

The underlying loan agreement, bank movements, creditor confirmation, foreign-exchange treatment, accrued interest, and accounting entries should reconcile. The Istanbul Chamber of Commerce LLC checklist requires the SMMM/YMM report to state that a shareholder receivable used in the increase arose from cash lending. A receivable with a different origin may require a court-appointed expert report and the related appointment document.

Converting debt into equity can improve the company’s future debt-to-equity position. It does not cancel tax consequences already created by interest, transfer pricing, thin capitalization, withholding, VAT, or foreign-exchange treatment. Those matters should be reviewed for the periods in which they arose.

What the SMMM or YMM Report Covers

The report supports the financial facts in the registration file. Its scope follows the capital source rather than a single standard template.

For an Istanbul application, the report and the accountant’s current activity certificate may need to establish:

• whether the existing capital has been paid;
• whether the registered capital remains protected within equity for the TTK Article 376 assessment;
• the calculated amount of equity;
• whether an internal source exists and is available within the company; and
• whether a shareholder receivable comes from documented cash lending.

An internal-source increase therefore needs evidence of the source account. A receivable conversion needs evidence of the debt and its origin. A cash increase requires the prior capital position to be checked and, if payment has already been made, supported by the bank record.

The authorized SMMM or YMM prepares and signs the financial report. The report itself is not automatically a notarized document.

Voting, Dilution and Pre-emptive Rights

Under TTK Article 591, each existing shareholder normally has the right to subscribe for new shares in proportion to the existing holding. This protects the shareholder against dilution.

If the increase changes ownership percentages, the file should show:

• how much each shareholder may subscribe;
• whether the right is exercised or waived;
• the justification for any restriction; and
• who will receive an unsubscribed portion.

The general assembly may restrict or remove the right only for just cause and with the required qualified decision. If not all shareholders participated in the increase decision, the managers determine the exercise procedure and allow at least 15 days for shareholders to use the right. Under the current Istanbul checklist, that managers’ decision is announced before registration.

When a new investor enters, distinguish between subscribing for newly issued capital and buying an existing share. If both occur, the capital increase and share transfer need separate documentation.

Capital Increase Procedure

1. Agree the structure

Set the target capital, funding source, subscription amounts, payment terms, and resulting ownership percentages. Check the current articles, shareholder ledger, financial statements, and earlier capital payments before drafting the resolution.

2. Prepare the financial evidence

The SMMM or YMM prepares the findings required for the chosen source. The supporting package may include a current balance sheet, ledgers, bank letters, loan documents, creditor confirmations, or internal-source schedules. Discrepancies should be resolved before the shareholders sign.

3. Adopt the shareholders’ decision

The decision amends the capital clause and records the old capital, new capital, nominal share values, allocations, source, and payment terms. Use the article number appearing in the company’s registered articles rather than assuming that the capital clause has a standard number.

4. Submit the amendment through MERSİS

Enter the amendment in MERSİS and obtain the application number. In Istanbul, the registry asks for a notarized copy of the general assembly decision taken from the general assembly meeting and discussion book. An attendance list is included where one was prepared.

A foreign individual shareholder can act through a properly authorized representative where the articles and corporate rules allow it. A power of attorney issued abroad generally requires apostille or consular legalization, as applicable, followed by a notarized Turkish translation. Our Turkey power of attorney guide covers those document routes.

An SMMM is not authorized to vote or sign for a shareholder merely because the professional handles the accounting file. Express representative authority is required.

If a new foreign legal entity becomes a shareholder, the registry will generally request current foreign registry evidence, tax-identification details, proof of the authorized signatory, and the necessary legalization and Turkish translation. An existing foreign corporate shareholder subscribing for additional capital may have a different document set.

5. Pay the Competition Authority share

The Competition Authority share is four ten-thousandths of the registered increase, equal to 0.04%. A TRY 1,000,000 increase therefore produces a TRY 400 payment.

The Istanbul checklist directs payment through the chamber cashier. Keep the receipt with the application. Registry service and Gazette announcement charges are separate from this payment; our Turkey company cost guide explains the main cost categories.

6. Register and update the records

In Istanbul, the filing must be made within 30 days of the general assembly decision. The application normally combines the petition, resolution, amended capital clause, MERSİS record, financial report, payment receipt, and source-specific or foreign-shareholder evidence.

After registration, the amendment is announced in the Turkish Trade Registry Gazette. The company then updates its shareholder ledger, statutory books, accounting records, ownership records, and bank instructions. Any unpaid cash subscription must be monitored throughout the 24-month payment period.

The completion time depends on the registry, document readiness, foreign legalization, pre-emptive-right procedure, and any correction request. For coordinated support with this and other post-incorporation amendments, see our company change and registry service.

Documents to Prepare

The exact list comes from the competent registry. A typical working file includes:

• MERSİS application and registration petition;
• the general assembly decision and amended capital clause;
• attendance list, where applicable;
• SMMM/YMM report and current activity certificate;
• balance sheet and source-specific accounting schedules;
• bank letter for any cash already paid;
• evidence supporting an internal source or shareholder receivable;
• Competition Authority payment receipt;
• legalized and translated foreign corporate documents or power of attorney, where applicable; and
• prior approval for a regulated company whose articles amendments require it.

Final Accounting Check

Before the decision is signed, the SMMM should confirm that:

1. the proposed source is eligible and agrees with the ledger;
2. the existing capital is paid and protected within equity;
3. accumulated losses have been considered;
4. any shareholder loan has been reviewed for interest, withholding, transfer-pricing, thin-capitalization, and foreign-exchange effects;
5. subscriptions and resulting ownership percentages reconcile; and
6. the company can monitor any unpaid cash commitment for 24 months.

This final check aligns the shareholders’ decision with the accounting records, bank evidence, statutory books, and registration file.

Official Sources

• Ministry of Trade: company-law frequently asked questions
• Ministry of Trade: company information and minimum capital rules
• Istanbul Chamber of Commerce: LLC registration procedures
• Turkish Commercial Code No. 6102
• Law No. 4054 on the Protection of Competition

Review the Structure Before the Shareholders Sign

The funding source, accounting evidence, shareholder allocation, and foreign documents should agree before the general assembly decision is finalized. Celikel CPA can review that structure, prepare the required accounting report, and coordinate the MERSİS and Trade Registry file. Contact our team to assess the proposed increase before signing.