A spouse who owns a company may believe that transferring company shares before filing for divorce will remove those shares from the marital property calculation. Under Turkish law, however, the situation is not that simple.

A transfer of company shares before divorce is not automatically unlawful or invalid. A spouse remains entitled, in principle, to manage and dispose of assets registered in his or her name. However, where the transfer is made to prevent or reduce the other spouse’s participation receivable (katılma alacağı), the transferred value may still be taken into account during the liquidation of the matrimonial property regime.

In practical terms, selling the shares does not necessarily mean that the economic value disappears from the divorce file.

This distinction is particularly important in divorces involving family businesses, start-ups, limited liability companies, joint-stock companies, holding structures and businesses whose real market value is substantially higher than their registered share capital.

The First Question: When Were the Company Shares Acquired?

Before analysing whether there has been an attempt to hide assets, it is necessary to determine the legal character of the company shares.

Under Article 202 of the Turkish Civil Code, the statutory matrimonial property regime is the participation in acquired property regime, unless the spouses have chosen another regime by matrimonial property agreement.

As a general rule, company shares acquired for consideration during the marriage while this regime is in force may constitute acquired property.

Turkish law also contains an important presumption: unless proven otherwise, a spouse’s assets are presumed to be acquired property. The Court of Cassation has applied this principle specifically to company shares acquired during the marriage and has emphasised that the spouse claiming that such shares are personal property bears the burden of proving that allegation.

Therefore, if a husband acquires 60% of a company five years after the marriage, it is generally not sufficient for him simply to argue:

“The company is registered only in my name, so my spouse has no rights over it.”

Registration of ownership and matrimonial property rights are different legal issues.

The other spouse does not automatically become a shareholder. Instead, depending on the circumstances, he or she may acquire a monetary participation receivable calculated through the liquidation of the matrimonial property regime.

What If the Company Was Established Before the Marriage?

The analysis changes where the shares were owned before the marriage.

Shares acquired before the matrimonial property regime generally constitute personal property. However, this does not necessarily mean that all economic benefits generated by the shares throughout the marriage are excluded from liquidation.

The Court of Cassation General Assembly of Civil Chambers has recognised that although company shares themselves may constitute personal property where they were acquired before the marriage, income generated from those shares during the matrimonial property regime may qualify as acquired property.

This distinction may become extremely significant in companies that:

• distribute substantial dividends,
• accumulate shareholder receivables,
• transfer profits to related companies,
• retain profits instead of distributing them,
• make capital increases during the marriage, or
• experience substantial growth during the marital period.

Accordingly, company cases should not be analysed merely by looking at the date appearing on a share certificate.

The source of acquisition, capital movements, company profits and financial transactions during the marriage may all have to be examined.

When Does the Matrimonial Property Regime End?

Timing is crucial.

Under Article 225 of the Turkish Civil Code, where the marriage ends by divorce, the matrimonial property regime is deemed to terminate as of the date on which the divorce action was filed, rather than the date on which the divorce judgment becomes final.

For example:

• Share transfer: 1 March 2026
• Divorce action filed: 1 June 2026
• Divorce judgment: 20 January 2027
• Judgment becomes final: 15 March 2027

For matrimonial property purposes, the critical termination date is normally 1 June 2026.

The transfer made on 1 March 2026 therefore occurred while the matrimonial property regime was still in force and may be examined under Article 229.

This is one reason why share transfers made shortly before a divorce action frequently attract judicial scrutiny.

The Key Rule: Article 229 of the Turkish Civil Code

Article 229 is the main legal mechanism used when a spouse disposes of assets before the matrimonial property regime ends.

The law identifies two important categories of assets that may be added back to the acquired-property calculation.

The first category covers gratuitous dispositions, other than ordinary gifts, made without the other spouse’s consent during the one-year period preceding the termination of the matrimonial property regime.

The second category is broader and covers transfers made during the matrimonial property regime with the intention of reducing the other spouse’s participation receivable.

The distinction is extremely important.

The “One-Year Rule” Does Not Protect Every Older Transfer

A frequent misunderstanding is that:

“If I transfer the shares more than one year before filing for divorce, my spouse can no longer claim anything.”

That is not necessarily correct.

The one-year period is specifically relevant to certain gratuitous dispositions.

By contrast, where it can be proven that a transfer was deliberately made during the matrimonial property regime in order to reduce the other spouse’s participation receivable, Article 229 also contains a separate rule concerning intentional transfers.

Accordingly, the court may have to examine not only when the transaction occurred, but also why and how it occurred.

Recent Court of Cassation case law also demonstrates the importance of evidence. In a 6 November 2025 judgment, the 2nd Civil Chamber held that money withdrawn approximately two years before the end of the matrimonial regime could not automatically be added back where the claimant failed to prove that the transaction fell within Article 229 or was intended to reduce the participation receivable.

Therefore, suspicion alone is generally insufficient. The surrounding facts and evidence matter.

Is Every Pre-Divorce Company Share Sale “Asset Hiding”?

No.

A genuine commercial sale will not automatically constitute an attempt to hide matrimonial property.

Suppose a spouse owns 40% of a technology company and sells the shares to an independent investor six months before divorce proceedings.

If:

• an independent buyer exists,
• the price corresponds reasonably to market value,
• the purchase price was actually paid,
• payment is traceable through banking records,
• there was a legitimate commercial reason for the transaction, and
• the proceeds remain identifiable,

the mere fact that the sale occurred before divorce does not necessarily establish bad faith.

But the analysis does not end there.

If the shares constituted acquired property, the sale proceeds may themselves remain part of the relevant matrimonial assets.

Changing the form of an asset does not necessarily eliminate its economic value.

For example:

Company shares worth TRY 20 million → sold for TRY 20 million → TRY 20 million deposited in spouse’s bank account.

The asset has effectively changed from shares into cash.

From a matrimonial property perspective, that is very different from:

Company shares worth TRY 20 million → transferred to spouse’s brother for TRY 500,000 → no real payment → divorce filed two weeks later.

The second transaction presents substantially stronger indicators of an intentional reduction of the other spouse’s participation receivable.

What Makes a Share Transfer Suspicious?

Turkish courts assess the circumstances of each individual case. There is no single fact that automatically establishes asset dissipation.

However, certain factors may substantially strengthen the claim.

Typical warning signs include:

• transfer to a sibling, parent, child, close friend or long-standing business partner;
• transfer immediately before separation or divorce proceedings;
• extremely low or symbolic sale price;
• lack of proof that the purchase price was actually paid;
• payment supposedly made in cash without reliable documentation;
• purchaser lacking the financial capacity to pay the stated purchase price;
• seller continuing to manage the company after supposedly selling the shares;
• seller continuing to receive company profits after the transfer;
• purchaser immediately transferring the shares to another related person;
• transfer coinciding with marital conflict;
• unusual amendments to the company’s shareholding structure;
• sudden shareholder loans or artificial company debts;
• unexplained capital increases diluting the spouse’s shareholding;
• unusual dividend distributions;
• transfer of profitable operations to another company;
• movement of company assets to related parties;
• rapid withdrawals from personal or company-linked bank accounts;
• communications showing concern about what the other spouse may receive in divorce.

None of these factors must necessarily prove bad faith by itself.

Taken together, however, they may form a powerful evidentiary picture.

A Sale to a Relative Is Not Automatically Invalid

Another common mistake is assuming that a transaction becomes invalid simply because shares were transferred to a sibling, parent or friend.

Relationship alone is not enough.

However, related-party transactions are often examined more carefully because they may provide circumstantial evidence regarding the real commercial purpose of the transfer.

Consider the following scenario.

A businessman owns 80% of a profitable company.

Two months after separating from his wife, he transfers 70% of the shares to his brother.

The registered sale price is TRY 1 million.

A later financial examination indicates that the shares were worth approximately TRY 35 million.

The brother cannot demonstrate sufficient financial capacity to make the purchase.

No banking record shows payment of TRY 1 million.

The original shareholder remains general manager, continues negotiating contracts and continues effectively controlling the company.

A divorce action is filed three weeks later.

In such a case, the formal share-transfer documentation would not necessarily conclude the matrimonial property analysis.

The court may examine the economic reality behind the transaction.

The Legal Consequence Is Usually Not Cancellation of the Share Transfer

This point is particularly important.

A claim arising from participation in acquired property is generally a monetary claim, rather than a property right over the transferred asset itself.

Therefore, establishing that Article 229 applies does not automatically mean that the court cancels the share transfer and registers the shares in the name of the other spouse.

Court of Cassation case law distinguishes between the validity of the transfer and the matrimonial property calculation.

Where a transaction falling within Article 229 is established, the value may be treated as though it remained within the acquired-property pool when calculating the participation receivable.

This can produce a significant practical result.

A spouse cannot necessarily defeat a TRY 20 million matrimonial claim merely by transferring the underlying asset before filing for divorce.

How Are Transferred Company Shares Valued?

In high-value divorces, this may become the most important question in the entire case.

The nominal value of a company’s share capital is often almost irrelevant to the company’s true economic value.

For example, a company may have:

• registered capital of TRY 5 million,
• annual turnover of TRY 500 million,
• valuable trademarks,
• significant real estate,
• long-term commercial contracts,
• substantial cash reserves,
• receivables,
• intellectual property,
• subsidiaries,
• licences or permits,

and therefore be worth far more than its nominal share capital.

The Court of Cassation has repeatedly emphasised the need to calculate matrimonial property claims according to the legally relevant valuation date rather than mechanically relying on historical transaction values. Under Article 235, assets to be added back may be evaluated according to their condition at the time of transfer and their value at the relevant liquidation stage.

In a 2024 decision concerning company shares, the Court of Cassation also emphasised that where company shares acquired during marriage constitute acquired property, the company’s position at the termination of the matrimonial regime must be properly examined and the value calculated in accordance with the applicable liquidation principles.

Consequently, a proper company-share dispute will frequently require expert examination by professionals experienced in corporate finance, accounting and company valuation.

What Documents Should Be Requested?

A spouse who suspects that company shares have been transferred to avoid matrimonial claims should not limit the case to trade registry records.

The financial structure surrounding the transaction should be reconstructed.

Depending on the company and the dispute, relevant evidence may include:

1. Turkish Trade Registry Gazette records;
2. company share ledger;
3. share-transfer agreements;
4. general assembly resolutions;
5. board of directors’ resolutions;
6. notarised transfer documents where applicable;
7. bank records showing payment of the share price;
8. purchaser’s bank records where legally obtainable;
9. tax declarations;
10. corporate balance sheets;
11. income statements;
12. trial balances and general ledger records;
13. shareholder current accounts;
14. dividend distribution resolutions;
15. capital increase records;
16. loan agreements between shareholders and the company;
17. independent audit reports;
18. company valuation reports;
19. related-party transactions;
20. invoices issued between affiliated companies;
21. electronic correspondence;
22. WhatsApp or email communications concerning the transfer;
23. documents showing when marital separation effectively began;
24. documents identifying the relationship between seller and purchaser.

The strongest cases are usually built not around a single document, but around the financial chronology of the transfer.

Why Proof of Payment Matters

One of the simplest but most important questions is:

Where is the money?

If a spouse claims to have sold shares for TRY 15 million, there should normally be an economic explanation for the TRY 15 million.

Was the amount transferred through a bank?

Was it paid in instalments?

Was it set off against a genuine debt?

Did the purchaser have sufficient funds?

Was the money subsequently transferred elsewhere?

Was it withdrawn immediately?

Was it transferred to another relative?

Was it returned to the purchaser?

A share transfer recorded as a “sale” does not automatically demonstrate that a genuine sale price was actually paid.

Following the money may therefore be more important than merely reading the share-transfer agreement.

Can the Purchaser Become Liable?

Potentially, but the issue requires a separate analysis.

Article 229 provides that judgments concerning qualifying dispositions may, where the statutory notification requirements are satisfied, also have consequences for third persons benefiting from those transfers.

Article 241 further provides a route against third persons, particularly where assets that must be taken into account in the liquidation were transferred gratuitously and the debtor spouse’s remaining assets are insufficient to satisfy the participation receivable.

The third party’s liability is not unlimited.

It is generally linked to the unsatisfied portion of the participation claim, and Article 241 contains strict time limits: the claim is subject to a one-year period from learning of the infringement and, in any event, a five-year period following the termination of the matrimonial property regime.

Court of Cassation case law also confirms the importance of first determining the liability of the spouse and whether the participation receivable can actually be recovered from that spouse before imposing liability on the beneficiary third party.

Therefore, the identity and procedural position of the transferee should be considered carefully from the beginning of the litigation strategy.

Can a Share Transfer Be Prevented Before It Happens?

Potentially, yes.

If there is a concrete risk that a spouse will dispose of significant assets, Turkish Civil Code Article 199 provides an important preventive mechanism.

Where necessary to protect the economic existence of the family or ensure compliance with financial obligations arising from the marriage, the Family Court may restrict one spouse’s power to dispose of identified assets by making certain transactions subject to the other spouse’s consent.

This remedy must be proportionate and should normally identify the assets concerned rather than seeking an unlimited restriction over the spouse’s entire property.

Recent Court of Cassation practice has also emphasised proportionality in applications under Article 199.

Accordingly, where a valuable company shareholding is at imminent risk of transfer, taking action before the transfer occurs may be substantially easier than attempting to reconstruct the transaction several years later.

Procedural interim measures may also be considered depending on the pending litigation and the circumstances of the case.

What If the Shares Are Transferred After the Divorce Case Is Filed?

This creates a different situation.

Remember that the matrimonial property regime terminates retrospectively as of the filing date of the divorce action under Article 225.

Suppose the spouse owns company shares on the date the divorce action is filed but sells them three months later.

The subsequent sale does not necessarily erase the fact that the shares existed when the matrimonial property regime terminated.

Therefore, the analysis will normally focus on the asset position as of the legally relevant termination date and the applicable valuation rules.

The spouse cannot ordinarily change the historical position merely by disposing of the asset after the divorce case has already begun.

Practical Example 1: Genuine Commercial Sale

A wife owns 30% of a logistics company acquired during marriage.

Eight months before divorce, she sells the shares to an unrelated international investor for TRY 25 million.

The company had been negotiating the investment for eighteen months.

Independent valuation reports exist.

TRY 25 million is paid directly to her bank account.

The money remains in deposits and investment funds when the divorce action is filed.

This transaction is unlikely to be treated in the same manner as a fictitious transfer designed to hide assets.

However, the TRY 25 million proceeds may still be relevant to the matrimonial property liquidation.

The sale itself has not caused the economic value to disappear.

Practical Example 2: Suspicious Transfer to a Brother

A husband owns 75% of a construction company established during marriage.

One month after the spouses separate, he transfers 70% of the company to his brother.

The agreement states a price of TRY 500,000.

The company’s net assets exceed TRY 40 million.

No bank payment exists.

The brother has no commercial involvement in the business.

The husband continues running the company.

A divorce action is filed six weeks later.

These facts would create significant grounds for investigating whether the transfer was intended to reduce the wife’s participation receivable under Article 229.

Practical Example 3: Company Owned Before Marriage

A husband established a manufacturing company ten years before marriage.

The shares themselves are therefore established to be his personal property.

During fifteen years of marriage, however, the company generates substantial profits and distributes dividends.

Some dividends remain in bank accounts when divorce proceedings begin.

The analysis should distinguish:

• ownership of the original company shares;
• dividends and income produced during marriage;
• any newly acquired shares;
• capital increases;
• shareholder receivables;
• financial transfers between the shareholder and company.

The simple statement that “the company existed before marriage” is therefore not sufficient to resolve the entire matrimonial property dispute.

The Most Important Court of Cassation Principle

One of the clearest principles emerging from Court of Cassation decisions is that an asset that no longer exists in the spouse’s name at the end of the matrimonial regime cannot automatically be included in the liquidation.

The claimant must establish either that the relevant asset still existed at the critical date or that the prior disposition falls within Article 229.

The Court of Cassation has specifically applied this reasoning to shares and securities and has overturned decisions where courts included them in the participation calculation without sufficiently investigating whether they existed at the termination date or had been disposed of under circumstances falling within Article 229.

This makes evidence of intent, timing and financial movements critical.

So, Does Transferring Company Shares Before Divorce Constitute Asset Hiding?

It can, but not automatically.

The legal question is not merely whether the shares were transferred before divorce.

The real questions are:

When were the shares acquired?

Were they acquired property or personal property?

When did the transfer occur?

Who received the shares?

Was the transfer gratuitous?

Was a genuine market price paid?

Can the payment be proven?

Where did the sale proceeds go?

Did the transferor continue to control the company?

Was there a legitimate business reason for the transaction?

Was the transaction designed to reduce the other spouse’s participation receivable?

If the evidence demonstrates that the transfer was made for the purpose of depriving the other spouse of his or her matrimonial property rights, Turkish law provides mechanisms to prevent the strategy from succeeding.

The transferred shares may no longer be legally registered in the spouse’s name, but their economic value may nevertheless be brought back into the matrimonial property calculation under Article 229.

For this reason, transferring a valuable company to a relative, business partner or nominee shortly before divorce should never be assumed to eliminate the other spouse’s financial rights.

Conclusion

Company share transfers are among the most complex issues in high-value divorce proceedings because family law, corporate law, accounting and company valuation intersect in the same dispute.

A legitimate commercial sale before divorce is not automatically “asset dissipation.”

But a fictitious sale, gratuitous transfer, symbolic-price transaction or related-party transfer designed to reduce the other spouse’s participation receivable may be treated very differently.

In such cases, the decisive issue is often not the formal transfer document but the economic substance of the transaction.

For the spouse challenging the transfer, the most effective strategy is generally to reconstruct the transaction chronologically: determine the shareholding immediately before the transfer, establish the company’s real economic value, identify the purchaser, trace the purchase price and demonstrate what happened to the proceeds.

For the transferring spouse, the strongest defence is usually objective commercial evidence showing a genuine transaction at a defensible value, actual payment and a legitimate economic purpose.

In Turkish matrimonial property litigation, selling the shares before filing for divorce does not necessarily mean that their value disappears.

Where the transaction was structured to defeat the other spouse’s participation rights, the law may still follow the value—even after the shares themselves have changed hands.