Corporate transactions are not only about signing contracts—they are about moving value. In practice, value moves when ownership changes: ownership of shares, ownership of assets, ownership of inventory, ownership of receivables, and sometimes ownership of entire business units. In Turkey, the legal mechanics of transferring ownership vary significantly depending on what is being transferred and how the transaction is structured.
Foreign investors and corporate counsel often underestimate this complexity. They may assume that signing a sale agreement automatically transfers ownership. In many cases, it does not. Turkish law frequently requires a combination of:
- a valid contractual basis (sales/assignment agreement),
- a legally required transfer act (delivery, endorsement, registration, notification),
- and, in corporate settings, internal approvals and governance compliance.
This article explains how ownership transfers work in corporate transactions in Turkey, focusing on the most common transfer categories: shares, movables, receivables, immovables, and enterprise-level asset deals. The goal is to provide a practical framework that reduces closing risk and post-closing disputes.
1. “Title” vs. “Contract”: Why Signing Is Not Always Enough
A key concept in many civil-law systems is that a contract creates obligations (e.g., to transfer ownership), but ownership may transfer only after a separate legal act. In transactions, this matters because:
- if ownership does not transfer, the buyer may not obtain control,
- the seller’s creditors may still reach the asset,
- and security interests or restrictions may still bind the asset in unexpected ways.
Therefore, transactional planning must identify the required transfer act for each asset type.
2. Share Transfers: Ownership of Companies
2.1. Joint-Stock Companies (A.Ş.)
Share transfers in A.Ş. transactions depend on:
- whether shares are registered or bearer,
- whether share certificates exist,
- and whether transfer restrictions apply (statutory or contractual).
In practice, share transfers often involve:
- endorsement/delivery mechanics for certificated shares,
- corporate record updates (share ledger),
- and compliance with shareholder agreements or consent requirements where applicable.
2.2. Limited Liability Companies (LTD)
LTD share transfers are typically more formal and involve:
- compliance with statutory form requirements,
- approvals under articles of association,
- and registration/notification steps to ensure the transfer is effective in practice.
Because LTDs are closely held, ownership transfer often requires careful sequencing of approvals and filings.
3. Transfer of Movable Assets in Business Deals
Movable assets (machinery, equipment, vehicles, inventory) are often transferred in:
- asset deals,
- carve-outs,
- or restructuring transactions.
The key legal concept is usually delivery (physical or constructive), which operationally requires:
- asset identification and schedules,
- confirmation of location and condition,
- and documentation showing transfer of possession/control.
Practical risks include:
- assets that are leased (seller does not own them),
- retention-of-title clauses by suppliers,
- third-party possession (warehouse operators),
- and undisclosed pledges or encumbrances.
4. Receivables and Contract Rights: Assignment Mechanics
Receivables are transferred through assignment-based mechanics. In corporate transactions, receivable transfers matter in:
- factoring,
- working-capital structures,
- asset deals where receivables are sold with the business,
- and intra-group reorganizations.
Key practical issues include:
- whether the receivable is assignable (contract restrictions),
- whether notice to the debtor is required or advisable,
- set-off and defenses that may reduce value,
- and the need to align assignment documents with invoicing systems.
In many deals, the greatest “hidden risk” is assuming receivables are fully collectible when they are subject to disputes, returns, or performance claims.
5. Immovables: Registration Is King
Real estate transfers generally require registration in the land registry. For corporate transactions, the main risks are:
- incorrect title records,
- existing mortgages or annotations,
- zoning or regulatory issues affecting usability,
- and closing timing: without registration, ownership does not shift.
Therefore, real estate-heavy asset deals are often structured with closing conditions tied to registry completion.
6. Business Unit / Enterprise Asset Transfers: Beyond Single Assets
In larger transactions, parties may transfer a portfolio of assets as part of a business unit. This raises challenges:
- each asset class may require different transfer acts,
- some assets may be non-transferable (licenses, permits),
- contracts may require counterparty consent,
- employees and operational continuity introduce additional legal layers.
A practical approach is to create a transfer map:
- list each asset category,
- identify the required transfer act,
- designate responsible persons,
- set timing and evidence requirements,
- and allocate risk through representations, warranties, and indemnities.
7. Corporate Approvals and Authority: Governance Matters
Ownership transfers in corporate transactions often require:
- board resolutions,
- shareholder approvals,
- authorization of signatories,
- and compliance with internal governance rules.
Failure here can invalidate or delay transfer steps, create litigation risk, or lead to post-closing challenges.
8. Closing Risk Management: Practical Tools
Experienced transaction teams use:
- detailed closing checklists,
- conditions precedent tied to required transfer acts,
- escrow and holdback mechanisms,
- representations and warranties on title and encumbrances,
- and post-closing covenants where certain transfers are staged.
Conclusion
In Turkey, ownership transfer in corporate transactions is a structured legal process, not a single signature moment. Each asset category—shares, movables, receivables, and real estate—requires its own transfer act and evidence. Transaction success depends on mapping those requirements early, aligning corporate approvals, and controlling closing mechanics through disciplined documentation. When done correctly, ownership transfers become predictable, enforceable, and resistant to post-closing disputes.
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