Introduction

A foreign investor considering the acquisition of an existing Turkish company will often ask one fundamental question:

“If I buy the company, will I become responsible for debts that arose before I became the owner?”

The answer under Turkish law depends heavily on how the acquisition is structured and what type of debt is involved.

The starting point is an important distinction.

If an investor purchases shares in a Turkish company, the company remains the same legal entity after the acquisition. Changing shareholders does not erase the company’s previous legal history.

Therefore, old liabilities such as:

• bank loans;
• supplier debts;
• unpaid taxes;
• social security liabilities;
• employee claims;
• lawsuits;
• commercial guarantees;
• customer claims; and
• regulatory liabilities

generally remain inside the company.

This does not necessarily mean that the foreign investor personally becomes the direct debtor for every historical liability.

For an ordinary share acquisition, the acquired company generally remains the debtor. In a Turkish joint stock company, for example, shareholders are generally liable only for the capital they undertake to contribute to the company. The Ministry of Trade expressly describes an A.Ş. as a company liable for its debts with its own assets, while shareholders are liable to the company only for their subscribed capital.

However, there are important exceptions.

The most significant is the acquisition of shares in a Turkish limited liability company – Ltd. Şti.

Under Article 35 of Law No. 6183 on the Collection Procedure of Public Receivables, limited company shareholders may become personally liable, in proportion to their capital share, for qualifying public receivables that cannot be collected from the company. Even more importantly for acquisitions, where a limited company share is transferred, the seller and purchaser may be jointly liable under the statutory framework for pre-transfer public receivables.

This means that a foreign investor buying an old Turkish limited company may face a type of personal historical public-debt exposure that does not normally arise merely from holding ordinary shares in an A.Ş.

Another major distinction arises when the transaction is not a share deal at all, but a business or asset transfer.

Under Article 202 of the Turkish Code of Obligations No. 6098, a person acquiring a business together with its assets and liabilities may become responsible to creditors for business debts following the legally prescribed notification or announcement. The former owner may remain jointly liable for two years under the statutory rules.

Accordingly, the correct legal answer is not simply:

“Yes, the buyer is responsible.”

or:

“No, old debts belong to the previous owner.”

The correct answer is:

The transaction structure, company type, nature of the debt, shareholder status and management role must all be analysed separately.

This article explains how liability for historical debts works when a foreign investor buys a company in Turkey in 2026, and how the investor can reduce these risks through legal due diligence, warranties, indemnities, escrow and carefully drafted closing conditions.

1. First Question: Is the Transaction a Share Deal or an Asset Deal?

This distinction is essential.

In a share deal, the buyer purchases shares in the existing company.

For example:

Foreign Investor → purchases 100% of Turkish Company A

Company A continues to exist.

It still owns the same:

• property;
• machinery;
• bank accounts;
• receivables;
• intellectual property; and
• contracts.

It also continues to owe the same liabilities.

Therefore:

old company debts remain company debts.

The seller no longer owns the company, but the company itself has not been replaced.

In an asset deal, by contrast, the investor or another acquisition vehicle purchases a business, commercial undertaking or selected assets.

The liability consequences can be materially different.

2. Does Buying Shares Automatically Transfer Old Private Debts to the Foreign Investor Personally?

Generally, no.

Suppose a foreign investor purchases 100% of a Turkish joint stock company.

The company has:

• TRY 20 million owed to suppliers;
• TRY 10 million of bank debt; and
• a pending commercial lawsuit.

Those liabilities remain liabilities of the target company.

The new shareholder does not normally become the direct contractual debtor simply because the shares changed hands.

The Ministry of Trade confirms that an A.Ş. is liable for its debts with company assets and that shareholders’ liability is generally limited to their subscribed capital obligations toward the company.

However, the investor still has a very real economic exposure.

If a newly acquired company has TRY 30 million of undisclosed liabilities, its value may be TRY 30 million lower than the purchaser believed.

Thus, the distinction between:

personal legal liability

and

economic acquisition risk

is critical.

Even where the foreign shareholder cannot personally be sued for a supplier debt, the company it has just purchased can still be sued, have bank accounts attached, lose assets or become insolvent.

3. Example: Hidden Supplier Debt After Acquisition

Assume a French investor purchases 100% of a Turkish A.Ş. for EUR 5 million.

Two months after closing, a supplier brings an enforcement proceeding for an unpaid TRY 15 million invoice issued one year before the acquisition.

The debt, if valid, remains a debt of the Turkish company.

The supplier will generally pursue the company rather than the new shareholder merely because ownership changed.

However, the purchaser may effectively suffer the financial loss because the acquired company’s assets will be used to pay the debt.

This is why acquisition agreements contain seller warranties and indemnities.

The buyer may have a contractual claim against the former shareholder, but that claim is separate from the creditor’s claim against the target.

4. Limited Companies Are Different When Public Debts Are Involved

The position changes significantly when the target is a Turkish limited liability company and the liability is a public receivable.

Article 35 of Law No. 6183 establishes a specific regime for limited company shareholders.

Under the statute, limited company partners may be directly responsible, according to their capital participation ratios, for public receivables that cannot be completely or partially collected from the company or are determined to be uncollectible.

This liability is not limited merely to the nominal amount of the shareholder’s capital.

The percentage of the shareholding determines the proportion of public debt for which the shareholder may be pursued.

For example:

Company public debt: TRY 10 million
Investor’s shareholding: 60%

If the statutory conditions are met, the shareholder’s Article 35 exposure may potentially be calculated by reference to the 60% participation ratio.

This is one of the most important differences between acquiring an Ltd. Şti. and acquiring an A.Ş.

5. Can a New Limited Company Shareholder Be Liable for Public Debts From Before the Acquisition?

Yes, potentially.

This is the part that foreign investors must understand before buying a Turkish limited company.

Article 35 expressly provides that where a partner transfers a capital share, the transferor and transferee are jointly liable, within the framework of the first paragraph, for public receivables relating to the period before the share transfer.

SGK’s current implementation guidance applies the same statutory framework to qualifying Institution receivables and explains that, where shares have been transferred, the former and new partners may be pursued under Article 35 for relevant pre-transfer debts according to their share ratios and statutory conditions.

This means that a foreign investor cannot safely assume:

“I became a shareholder in 2026, so nothing from 2025 can affect me.”

For an Ltd. Şti., that may be incorrect where public receivables are involved.

6. What Counts as a Public Receivable?

Law No. 6183 covers various public claims, including many amounts owed to public authorities such as taxes, penalties, interest and certain other public receivables.

In company acquisitions, the most important categories often include:

• corporate tax;
• VAT;
• withholding taxes;
• tax penalties;
• late-payment interest;
• SGK premium receivables;
• administrative public receivables; and
• other statutory claims subject to public collection procedures.

The particular liability basis should always be examined separately because tax, SGK and administrative claims may have additional statutory rules.

7. Does the Public Authority Have to Pursue the Limited Company First?

Under the Article 35 regime, the company’s public debt must generally be completely or partially uncollectible from the company or understood to be uncollectible before Article 35 shareholder liability is pursued.

SGK’s detailed guidance describes the company as the primary debtor and explains that limited company shareholders are pursued proportionally after the relevant statutory collection conditions against the company are satisfied.

This is therefore not the same as saying that every tax invoice immediately becomes the shareholder’s personal debt.

Nevertheless, from an acquisition-risk perspective, the distinction may provide little comfort if the target has no assets capable of satisfying a major public claim.

8. Is a Joint Stock Company Shareholder Subject to the Same Historical Public-Debt Rule?

Not merely because that person owns A.Ş. shares.

The Ministry of Trade confirms that joint stock company shareholders are generally responsible only to the company for the capital they have undertaken to contribute.

The special Article 35 shareholder regime specifically concerns limited companies.

Therefore, from the perspective of a passive foreign shareholder, purchasing an A.Ş. generally creates stronger separation from public-debt liability than purchasing shares in an Ltd. Şti.

However, there is an important qualification:

board membership, legal representation or management authority can create a different liability analysis.

9. What Happens if the Foreign Investor Also Becomes a Director or Manager?

Foreign acquirers frequently do more than purchase shares.

After closing, they may also appoint:

• themselves;
• a nominee;
• an executive; or
• a group-company representative

as a manager or board member.

This creates a separate area of potential personal liability.

Article 35 repeated (mükerrer 35) of Law No. 6183 provides for personal liability of legal representatives in relation to certain public receivables that cannot be collected from the legal entity. The Revenue Administration’s guidance confirms that legal representatives are subject to a separate public-debt regime distinct from the shareholder rules applicable to limited companies.

The Tax Procedure Law also imposes duties on legal representatives of legal entities and provides for recovery from responsible representatives in defined circumstances where tax obligations have not been fulfilled and amounts cannot be collected from the taxpayer.

Therefore, an investor should distinguish between three different positions:

shareholder

manager/director

person authorised to legally represent the company

They do not have identical liability rules.

10. Does Becoming a New Director Automatically Make You Liable for Every Historical Tax Debt?

Not automatically.

This question requires period-specific legal analysis.

Liability of legal representatives can depend on matters such as:

• when the public debt arose;
• when it became payable;
• who had representation authority during the relevant period;
• whether statutory obligations were performed;
• and the specific legal basis of the public receivable.

Revenue Administration guidance emphasises the importance of identifying the legal representative with representation authority in the relevant periods.

Accordingly, a foreign investor should not assume that accepting a board position automatically creates responsibility for all debts going back ten years.

But the investor should equally not assume that management status is irrelevant.

A management appointment should be analysed together with the historical liability review.

11. SGK Liabilities and Senior Management Risk

Social security liabilities deserve separate attention.

SGK’s current legal analysis explains that under Article 88 of Law No. 5510, certain senior managers, authorised persons, board members and legal representatives may be jointly and severally liable with the employer for unpaid premium liabilities under the statutory conditions.

This is a substantially different risk from ordinary shareholder liability.

For this reason, a foreign investor acquiring a company and simultaneously becoming its managing representative should conduct a detailed historical review of:

• unpaid premiums;
• employee registrations;
• payroll declarations;
• workplace records;
• occupational classifications;
• and existing SGK proceedings.

12. Employee Claims Do Not Disappear When Shares Change Hands

In a share acquisition, the employer does not change.

The same target company remains the legal employer before and after the transaction.

Therefore, historical employment liabilities generally remain within the company.

Examples include:

• severance pay;
• notice pay;
• unpaid wages;
• overtime;
• unused annual leave;
• holiday pay;
• discrimination claims;
• reinstatement cases;
• workplace accident claims; and
• occupational disease liabilities.

Buying the shares does not reset employees’ service periods.

Therefore, a foreign investor may acquire a company containing significant accrued employee exposure even if no amount is currently payable.

13. Asset Deals Create a Different Employee Liability Regime

Where the transaction involves the transfer of a workplace or part of a workplace rather than a simple share transfer, Article 6 of the Turkish Labour Law becomes relevant.

The Ministry of Labour’s current 2026 guidance confirms that when a workplace or part of it is transferred through a legal transaction, existing employment contracts generally transfer to the new employer with their rights and obligations.

For certain debts that arose before the transfer and were due on the transfer date, the transferor and transferee may be jointly liable, while the former employer’s ordinary joint liability is generally limited to two years, subject to special rules such as those concerning severance pay.

Therefore, choosing an asset deal does not automatically mean that employee liabilities can be left behind.

14. What Happens in a Business Transfer Rather Than a Share Purchase?

Article 202 of the Turkish Code of Obligations creates another important rule.

Where a person acquires a property pool or business together with its assets and liabilities, the acquirer becomes responsible toward creditors for the business debts following the statutory notification or announcement mechanism.

The previous debtor remains jointly liable with the acquirer for two years. For debts not yet due, the relevant period runs from maturity; and where the required notification or announcement is not made, the two-year period does not begin.

Accordingly:

asset deal does not always mean liability-free acquisition.

If the structure legally constitutes the transfer of the commercial business as a whole, Turkish law may itself impose liability for existing obligations.

15. Share Deal vs Asset Deal: Which Is Safer?

Neither structure is automatically safer.

A share deal usually means that all historical liabilities remain in the target company.

An asset deal may allow the purchaser to choose specific assets in some structures, but statutory successor-liability rules may still apply where a commercial business is transferred as an organised whole.

Other liabilities can also follow particular assets because of:

• employment legislation;
• tax rules;
• environmental rules;
• secured creditor rights;
• contractual assumption;
• licences; or
• statutory succession.

Therefore, a transaction should not be labelled an “asset deal” merely as a way to avoid due diligence.

16. Old Bank Loans Remain With the Company in a Share Deal

Suppose the target owes USD 3 million to a Turkish bank.

A 100% transfer of the company’s shares does not eliminate the bank loan.

The company remains the borrower.

The investor must therefore review:

• outstanding principal;
• accrued interest;
• financial covenants;
• security;
• guarantees;
• mortgages;
• pledges;
• and default provisions.

The loan may also contain a change-of-control clause requiring bank approval.

If the buyer acquires control without obtaining required consent, the bank may potentially accelerate the debt.

Therefore, old debt risk is not limited to unknown liabilities.

Even disclosed debt may become more dangerous because of the acquisition itself.

17. Guarantees Are Often More Dangerous Than Recorded Debt

A target may appear to have relatively little borrowing but still have guaranteed another entity’s obligations.

For example, the target may have guaranteed debts owed by:

• the seller;
• a former shareholder;
• a sister company;
• another group company;
• or a customer.

These guarantees may remain valid after the sale.

The new shareholder may therefore own a company that becomes liable for a third party’s debt years after closing.

Due diligence should specifically search for:

• corporate guarantees;
• letters of guarantee;
• suretyships;
• avals;
• mortgages;
• pledges;
• assignments;
• and other contingent liabilities.

18. Litigation Does Not Disappear After the Acquisition

If the target company is a defendant in litigation before the share sale, it remains the defendant after closing.

This may include:

• commercial disputes;
• employment lawsuits;
• intellectual property claims;
• tax litigation;
• administrative cases;
• customer claims;
• product liability cases;
• and arbitration proceedings.

Even disputes that have not yet been filed can matter.

A customer may send a formal notice before closing and file a lawsuit six months later.

For this reason, the purchaser should investigate both:

pending disputes

and

threatened claims.

19. Tax Clearance Certificates Do Not Eliminate All Historical Tax Risk

An investor may ask the seller to obtain documentation showing no outstanding tax debt.

That is useful—but it is not sufficient.

The central problem is that a tax liability can arise later following an audit of an earlier period.

For example, the target may have filed its 2024 tax returns and have no currently payable balance.

After the acquisition, the tax authority may audit the 2024 transactions and impose:

• additional tax;
• tax-loss penalties;
• interest;
• or other assessments.

Therefore, tax due diligence should review the underlying conduct, not merely the current balance.

20. Special 2026 Risk: Historical Fake or Misleading Invoice Issues

Foreign investors should pay special attention to companies with suspicious historical invoicing.

The Turkish tax framework contains severe consequences where companies are involved in false-document or misleading-document activity.

Current tax legislation also contains special security provisions affecting certain companies and persons associated with taxpayers whose registrations were terminated due to fraudulent-document findings; updated 2026 thresholds apply under those rules.

Therefore, a company marketed as “inactive” or “dormant” may still present substantial risk if it previously generated unusually high turnover through questionable invoices.

21. Does the Seller Remain Liable After Selling the Shares?

The answer depends on the type of liability.

For ordinary company debts, the company remains the debtor.

The seller does not necessarily continue to owe those obligations personally merely because it once owned shares.

However, the seller may remain liable under:

• historical personal guarantees;
• manager/director liability rules;
• limited-company public-debt provisions;
• contractual indemnities in the SPA;
• fraud or misrepresentation;
• or other specific statutory rules.

For a limited company public debt, Article 35 can result in joint exposure of the transferor and transferee under the statutory conditions for pre-transfer public receivables.

Therefore, the seller’s departure from the shareholder structure does not necessarily end every historical liability.

22. Can the Buyer and Seller Agree That the Seller Will Pay All Old Debts?

Yes, contractually.

A Share Purchase Agreement can state that the seller is economically responsible for liabilities arising before closing.

However, such an agreement generally governs the relationship between buyer and seller.

It does not necessarily bind a tax authority, SGK, bank, employee or third-party creditor whose statutory or contractual rights exist independently.

For example, the parties might agree:

“The seller shall be responsible for all tax liabilities relating to periods before closing.”

If the tax authority later has a statutory right to pursue the company—or a limited-company shareholder under Article 35—the buyer cannot simply show the private SPA and prevent statutory collection.

Instead, the buyer may need to pay or suffer the company-level loss and then pursue the seller under the indemnity.

This is why enforceability and security are critical.

23. A Warranty Is Not the Same as an Indemnity

Foreign investors should understand this distinction.

A warranty is a contractual statement.

For example:

“The company has no unpaid tax liabilities other than those disclosed.”

If that statement is false, the buyer may have a damages claim.

An indemnity deals more directly with a specific risk.

For example:

“The seller shall indemnify the purchaser for all tax, penalties, interest and expenses arising from the 2023 tax inspection.”

Where a historical liability is already known, a specific indemnity is often preferable to relying solely on a general warranty.

24. Use a Tax Indemnity for Historical Tax Exposure

In substantial M&A transactions, the purchaser may negotiate a dedicated tax covenant or tax indemnity.

This can cover liabilities arising from:

• pre-closing tax periods;
• transactions completed before closing;
• previous tax filings;
• historical VAT;
• payroll tax;
• transfer pricing;
• customs;
• and tax audits.

The indemnity should clearly define:

• which periods are covered;
• who controls tax disputes;
• notification obligations;
• settlement authority;
• payment timing;
• and claim periods.

25. Escrow Can Be More Valuable Than a Strong Warranty

Imagine a foreign buyer purchases a Turkish company for EUR 8 million.

The seller gives excellent warranties.

Six months later, a TRY 40 million tax assessment appears.

The buyer begins arbitration and eventually wins.

But the seller has transferred the EUR 8 million purchase price abroad and has no reachable assets.

The buyer’s strong contractual claim may therefore have limited practical value.

One solution is escrow.

For example:

Purchase Price: EUR 8 million
Paid at Closing: EUR 6.5 million
Escrow: EUR 1.5 million
Escrow Period: 24 months

Historical claims can then potentially be satisfied from the retained amount according to the SPA.

26. Purchase Price Holdback Is Another Protection

Instead of third-party escrow, the buyer may simply retain part of the purchase price.

For example:

EUR 7 million at closing;

EUR 1 million twelve months later, provided that no specified historical liabilities emerge.

This may provide useful protection where due diligence has identified uncertain exposures.

27. Conditions Precedent Can Eliminate Debt Before Closing

The buyer can also require certain liabilities to be resolved before acquiring the shares.

Examples include:

• repayment of shareholder loans;
• discharge of tax debts;
• SGK clearance;
• release of mortgages;
• termination of group-company guarantees;
• bank consent;
• settlement of litigation;
• repayment of related-party debt; or
• release of share pledges.

The SPA may state that closing cannot occur until the required documents are delivered.

This can be significantly safer than attempting to solve the problem after becoming the owner.

28. Why Due Diligence Is Essential Before Buying a Turkish Company

The purpose of due diligence is not merely to create a report.

It should determine:

• whether the acquisition should proceed;
• whether the price should change;
• whether liabilities should be paid before closing;
• whether escrow is necessary;
• whether special indemnities are required;
• and whether the buyer should walk away.

A comprehensive review may examine:

• corporate records;
• tax;
• SGK;
• employees;
• litigation;
• enforcement proceedings;
• banks;
• guarantees;
• commercial contracts;
• intellectual property;
• real estate;
• licences;
• data protection;
• sanctions and compliance;
• related-party transactions; and
• accounting records.

29. Limited Company Due Diligence Should Be More Aggressive

Where the acquisition target is an Ltd. Şti., the investor should specifically investigate:

• historical tax liabilities;
• all public receivables;
• SGK debts;
• dates on which liabilities arose and became payable;
• historical shareholders and share ratios;
• prior share transfers;
• tax audits;
• payment orders;
• restructuring agreements;
• and enforcement measures.

The purchaser should also review whether becoming a shareholder creates Article 35 exposure for unresolved pre-transfer public receivables.

That review should be completed before the share transfer is registered.

30. A.Ş. Acquisition Due Diligence Is Still Essential

The absence of the same limited-company public-debt shareholder rule does not make an A.Ş. acquisition risk-free.

The acquired company can still carry:

• enormous tax liabilities;
• litigation;
• employment exposure;
• guarantees;
• bank debt;
• defective licences;
• and customer claims.

The difference is mainly that an ordinary passive shareholder is not subject to the same Article 35 Ltd. Şti. shareholder mechanism merely because shares are acquired.

The economic loss still remains very real.

31. Should the Investor Prefer an Asset Deal to Avoid Old Debts?

Sometimes an asset acquisition can isolate specific risks more effectively than a share acquisition.

But the answer is not automatic.

If the transaction constitutes transfer of the commercial business as a whole, Article 202 of the Turkish Code of Obligations may result in the purchaser becoming responsible for the business debts under the statutory conditions.

Employee rights may also transfer under Labour Law Article 6 where a workplace or part of it is transferred.

Therefore, the acquisition structure should be selected after analysing:

• tax;
• employment;
• licences;
• contracts;
• liabilities;
• transfer taxes;
• regulatory approvals;
• and creditor rights.

32. Practical Example: Foreign Investor Buys a Turkish Ltd. Şti.

Assume an Italian investor purchases 100% of a Turkish limited company in September 2026.

The seller says:

“The company has no debt.”

The investor pays EUR 500,000.

Six months later, the company receives claims arising from periods before acquisition:

• TRY 8 million VAT assessment;
• TRY 2 million SGK receivables;
• TRY 3 million employee claims;
• TRY 5 million supplier debt.

How should these be analysed?

Supplier Debt

The company remains the debtor.

The new shareholder does not normally become personally liable merely because it purchased the shares.

However, the company must pay the debt if valid.

Employee Claims

The company remains the employer and continues to face historical employment liability.

Tax/Public Debt

The company is the principal debtor.

Because the target is an Ltd. Şti., the new shareholder may additionally face Article 35 exposure for qualifying public receivables under the statutory conditions.

SGK

The company remains responsible, while limited company shareholder rules and separate management/representative provisions may create additional exposure depending on the facts.

Buyer-Seller Relationship

If the SPA contains appropriate warranties and indemnities, the purchaser may seek contractual recovery from the seller.

If the seller has no assets and there is no escrow, successful recovery may nevertheless be difficult.

33. Practical Example: Foreign Investor Buys an A.Ş.

Now assume the same investor purchases 100% of a Turkish A.Ş.

The same historical liabilities exist.

The target company remains liable for them.

However, the purchaser is not subject merely as shareholder to the same Article 35 limited-company public-debt framework. A.Ş. shareholders’ ordinary responsibility remains limited to their capital obligations toward the company.

If the investor subsequently becomes a director or legal representative, separate rules must be analysed.

This illustrates why the legal form of the target matters.

34. Ten Questions a Foreign Investor Should Ask Before Buying a Turkish Company

Before closing an acquisition, the investor should be able to answer at least the following:

1. Is the transaction a share purchase, asset purchase or business transfer?
2. Is the target an Ltd. Şti. or A.Ş.?
3. Are there unpaid tax or SGK liabilities?
4. Are historical periods under tax audit?
5. Are there pending or threatened lawsuits?
6. Has the target guaranteed third-party debt?
7. Do bank loans contain change-of-control clauses?
8. What employee liabilities have accrued?
9. Will the investor or its representative become a manager/director?
10. What contractual security exists if undisclosed liabilities emerge?

If these questions cannot be answered, the acquisition is not ready to close.

Frequently Asked Questions

If I buy a Turkish company, do all old debts become my personal debts?

Generally no. In a share acquisition, historical private debts usually remain liabilities of the company. However, important statutory exceptions apply, particularly for shareholders of Turkish limited companies in relation to qualifying public debts.

Does buying 100% of an A.Ş. make me personally liable for old supplier debt?

Ordinarily no merely because you become a shareholder. The A.Ş. remains the debtor, and shareholders are generally liable only for their subscribed capital obligations toward the company.

What if I buy an Ltd. Şti.?

The company still remains the debtor for ordinary liabilities, but Article 35 of Law No. 6183 may create personal shareholder exposure for qualifying public receivables that cannot be collected from the company.

Can a new Ltd. Şti. shareholder be responsible for public debts from before the share transfer?

Potentially yes. Article 35 expressly provides for joint responsibility of the transferor and transferee within the statutory framework for pre-transfer public receivables.

Is this liability limited to the capital amount I paid?

Article 35 liability is based on the shareholder’s capital participation ratio rather than simply being capped at the nominal amount paid for the share.

What if the target has unpaid SGK premiums?

The company remains liable. In an Ltd. Şti., shareholder liability rules may additionally matter, while senior managers, authorised persons and legal representatives may face separate joint liability under the social security legislation where statutory conditions apply.

Does becoming a director make me responsible for all old tax debt?

Not automatically. Legal representative liability requires period-specific analysis, including when obligations arose or became payable and who held legal representation authority.

Do employee claims remain after a share transfer?

Yes. Because the employer company remains the same legal entity, historical employee claims remain inside the target.

What if I buy the business assets rather than shares?

Different rules apply. A transfer of a business together with its assets and liabilities may trigger Article 202 of the Turkish Code of Obligations, under which the acquirer can become responsible for existing business debts and the former owner may remain jointly liable for two years under the statutory framework.

Do employees transfer in an asset/business transfer?

Where a workplace or part of it is transferred, existing employment contracts generally transfer with their rights and obligations under Labour Law Article 6.

Can the SPA state that the seller pays all historical debts?

Yes, contractually, but that agreement does not necessarily prevent third-party creditors or public authorities from exercising their statutory rights. The buyer may instead obtain a contractual reimbursement claim against the seller.

What is the best protection against hidden debts?

Usually a combination of legal, financial and tax due diligence, seller warranties, tax covenants, specific indemnities, escrow or holdback and carefully drafted conditions precedent.

Conclusion: Is a Foreign Investor Responsible for Old Debts After Buying a Company in Turkey?

The most accurate answer is:

The old debts do not disappear when the company changes hands.

In a share acquisition, the Turkish target remains the same legal entity.

Therefore, its historical:

• commercial debts;
• tax exposure;
• SGK liabilities;
• employee claims;
• litigation;
• bank loans;
• guarantees;
• regulatory liabilities; and
• contractual obligations

remain within the company after the sale.

Whether the foreign investor personally becomes liable requires a separate analysis.

For a Turkish joint stock company, an ordinary shareholder is generally liable only for the capital subscribed to the company. The company itself is responsible for its debts with its assets.

Accordingly, a person purchasing an A.Ş. does not normally become personally responsible for historical supplier or bank debts merely because shares were acquired.

However, the investor still bears the economic consequence because the newly acquired company must satisfy those liabilities.

The position is significantly more sensitive for a Turkish limited liability company.

Article 35 of Law No. 6183 creates a statutory mechanism under which limited company shareholders may become personally responsible, according to their share ratios, for qualifying public receivables that cannot be collected from the company. Where shares are transferred, the seller and purchaser can be jointly liable within this framework for pre-transfer public receivables.

Therefore, buying an Ltd. Şti. without investigating historical:

• tax;
• SGK;
• penalties;
• and other public debts

can create a particularly serious acquisition risk.

Foreign investors must also remember that management status creates another layer of potential exposure.

A purchaser who becomes a manager, board member or legal representative must consider the separate liability provisions applicable to legal representatives, including public receivables and social security premiums.

The analysis also changes where the investor buys a business rather than shares.

Under Article 202 of the Turkish Code of Obligations, a purchaser acquiring a business together with its assets and liabilities may become responsible for existing business debts following the statutory notification mechanism, while the previous owner generally remains jointly responsible for two years.

Workplace transfers additionally trigger employee-protection rules under Article 6 of the Labour Law.

For this reason, the safest acquisition process is generally:

transaction structure analysis → legal, tax and financial due diligence → historical public-debt review → employee and SGK review → litigation review → bank and guarantee review → determination of management liability → purchase price adjustment → warranties and indemnities → escrow or holdback → conditions precedent → closing.

A foreign investor should never rely solely on a seller saying:

“There are no old debts.”

Nor should the investor rely only on a current tax debt certificate.

Some of the most expensive acquisition liabilities are liabilities that have not yet been assessed or claimed on the closing date.

An audit relating to an earlier tax year can begin later.

An employee can file a claim after the acquisition.

A customer can sue over a product supplied before closing.

A bank guarantee can be called months later.

A historical tax or SGK liability can surface after the seller has received the entire purchase price.

The Share Purchase Agreement must therefore determine who bears the economic consequences of these risks.

Depending on the transaction, the investor may require:

• a comprehensive tax indemnity;
• specific indemnities for known disputes;
• seller warranties;
• escrow;
• deferred consideration;
• purchase price retention;
• repayment of debts before closing;
• release of guarantees;
• or a reduction in the acquisition price.

For foreign investors, the essential principle is:

Do not buy the shares first and investigate the liabilities later.

The legal and financial history of the company should be examined before the investor becomes a shareholder.

A well-structured acquisition can separate, price and contractually allocate historical risks.

A poorly structured acquisition may leave the investor discovering after closing that the company’s most significant assets were visible—but its most significant liabilities were not.

This article reflects Turkish legislation and administrative guidance available as of August 2026 and is provided for general informational purposes only. It does not constitute transaction-specific legal, tax, accounting or investment advice. Historical liability exposure should be analysed individually according to the target company’s legal form, nature of the debt, dates on which liabilities arose and became payable, shareholder and management history, and the structure of the proposed acquisition.