Liquidation

Also known as: Winding Up, Company Liquidation, Liquidator, Dissolution, Closing a Company, Tasfiye

In short

The process of completing the pending business of a dissolved company, collecting its receivables, paying its debts, distributing the remaining assets to shareholders and deleting the company from the trade registry.

Liquidation is the process of completing a dissolved company’s business, collecting its receivables, paying its debts and distributing the remaining assets to shareholders. When liquidation is complete, the company is deleted from the trade registry and its legal personality ends.

Grounds for Dissolution

Expiry of the term set in the articles,
General assembly resolution,
Bankruptcy,
Court decision (for example, in a minority’s action for dissolution for just cause),
The general assembly failing to take the required decision in case of capital loss,
Failure to meet the minimum capital requirement; companies that do not raise their capital to the minimum by 31 December 2026 are deemed dissolved.

In a merger and a full demerger, the company ends without liquidation.

Liquidation Process

Entering liquidation: The dissolution resolution and liquidators are registered with the trade registry and published; “in liquidation” is added to the trade name.
Inventory and opening balance sheet: The liquidators determine the company’s assets.
Call to creditors: Creditors are invited to declare their claims through three announcements in the Turkish Trade Registry Gazette and on the company’s website.
Completing business: Pending business is completed, receivables collected and debts paid.
Distribution: Remaining assets cannot be distributed to shareholders until six months have passed after the call to creditors.
Closing and deletion: After the final liquidation balance sheet and the closing general assembly, deletion of the company from the registry is requested.

Liquidators

Liquidators may carry out all transactions consistent with the purpose of liquidation. Liquidators who breach their duties through fault are liable like board members. At least one liquidator must be resident in Turkey.

Points to Watch

Closing notifications must be made to the tax office and the social security institution.
Shareholders’ and managers’ liability for uncollectable public debts may continue; see Shareholder Liability for Public Debts.
If assets or a lawsuit of a deleted company later come to light, re-registration of the company may be sought.

Frequently Asked Questions

How long does a company liquidation take?

As a rule, the remaining assets cannot be distributed to shareholders until six months have passed after the call to creditors. Even a straightforward liquidation therefore usually takes more than six months. Pending lawsuits, uncollectable receivables and tax audits can extend it.

Can a company in liquidation continue its business?

A company in liquidation may only carry out transactions consistent with the purpose of liquidation; it cannot enter into new business. Its legal personality continues during liquidation and "in liquidation" is added to its trade name.

← Glossary A–Z