Closing a business in Turkey is not as simple as stopping operations. If you want a clean and legally safe exit, you must follow a company liquidation process in Turkey that properly documents the decision to dissolve, appoints liquidators, settles debts, and completes registrations and filings. Foreign shareholders often underestimate how much time and compliance discipline liquidation requires—especially if there are unresolved tax/SGK issues, employees, or hard-to-collect receivables.
This guide explains how to liquidate a company in Turkey in a practical step-by-step format, focusing on what usually delays liquidation and how to avoid common legal risks.
1) Liquidation vs Bankruptcy vs Concordat: Choose the Right Path First
Before you start, confirm the correct exit route:
- Voluntary liquidation is typically used when the company can wind down in an orderly way.
- Bankruptcy becomes relevant when the company cannot meet its obligations.
- Concordat is a restructuring tool for survival when debts are heavy but the business is viable.
This article focuses on voluntary liquidation (tasfiye).
2) Step 1 — Prepare the Liquidation Plan (Before Any Filing)
A good liquidation starts with planning:
- list assets (cash, inventory, equipment, receivables)
- list liabilities (suppliers, loans, taxes, SGK, employees)
- identify contracts that must be terminated or assigned
- confirm whether there are pending disputes or enforcement actions
- decide whether there is a buyer for any assets (sale plan)
Practical note: If your company has unresolved receivables, liquidation can stall. Plan collection strategy early.
3) Step 2 — Shareholder Resolution to Dissolve and Enter Liquidation
Liquidation begins with a formal corporate decision:
- a shareholder resolution to dissolve the company,
- entry into liquidation,
- appointment of liquidator(s).
This is the legal trigger that changes the company’s status and starts the liquidation regime.
4) Step 3 — Appoint Liquidator(s) and Define Their Powers
The liquidator takes over key responsibilities:
- managing the liquidation process,
- representing the company for liquidation purposes,
- collecting receivables and selling assets,
- paying debts, completing filings, and closing the company.
Foreign-owned companies should ensure the liquidator has:
- clear signing authority,
- documented mandate and limits,
- a reporting obligation to shareholders.
5) Step 4 — Trade Registry Registration and Required Announcements
The liquidation status must be registered and announced as required. This step:
- puts third parties on notice,
- informs creditors and triggers claim submission mechanics,
- creates an official record that the company is in liquidation.
Common delay: filings that don’t match corporate resolutions or identity documentation.
6) Step 5 — Notify and Manage Creditors (Prevent Future Claims)
A core function of liquidation is creditor management:
- identify all creditors,
- verify debt amounts,
- settle or negotiate where needed,
- keep evidence of payments and releases.
Practical note: Unclear creditor status can block closure and create post-closure risk.
7) Step 6 — Tax, SGK, and Compliance Clean-Up (The Real Bottleneck)
Most liquidations in Turkey are delayed by:
- missing tax filings,
- SGK issues (especially if there were employees),
- penalties and interest disputes,
- audit/inspection friction.
To avoid long delays:
- keep accounting active during liquidation,
- run a compliance calendar until the company is fully closed,
- document all final filings and payments carefully.
8) Step 7 — Terminate Employees and Close Payroll Properly (If Applicable)
If the company has employees, liquidation requires:
- lawful termination steps,
- settlement of wages and severance obligations,
- final SGK reporting and payroll closure,
- documentation of releases where possible.
Employee issues can create major claims—do not treat HR as an afterthought in liquidation.
9) Step 8 — Convert Assets to Cash and Settle Remaining Liabilities
Liquidators typically:
- collect receivables,
- sell inventory/equipment (where relevant),
- settle supplier debts and bank obligations,
- close contracts (leases, services, subscriptions).
A controlled asset-sale plan reduces disputes and protects shareholders from accusations of unfair distribution.
10) Step 9 — Final Accounts, Distribution (If Any), and Company Closure
Once liabilities are settled, the liquidator prepares:
- final accounts and closing balance,
- documentation for any distributions,
- final corporate steps and deregistration.
Only after the legal and compliance steps are completed can the company be fully closed.
11) Common Mistakes That Make Liquidation Slow or Risky
- starting liquidation without mapping debts and contracts
- appointing a liquidator with unclear authority and no reporting discipline
- ignoring tax/SGK filings “because the business stopped”
- failing to document creditor settlements and releases
- distributing value before settling liabilities
- poor recordkeeping of liquidation decisions and payments
FAQ
How long does liquidation take in Turkey?
It varies. The biggest drivers are unresolved receivables, tax/SGK compliance status, employees, and disputes. Companies with clean books and no operational complexity close faster.
Can foreign shareholders liquidate a Turkish company?
Yes. Foreign shareholders can initiate liquidation, but the process must follow Turkish corporate and compliance procedures.
What is the most common liquidation bottleneck?
Tax and SGK compliance clean-up is often the main bottleneck in practice.
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