Choosing between a share purchase and an asset purchase is one of the most important structuring decisions in any Turkish M&A deal. The answer affects not only price and negotiation dynamics, but also liability allocation, closing mechanics, employee transfer issues, competition filings, foreign investment reporting, and the overall speed of execution. In Turkey, that choice must be analyzed through several overlapping legal frameworks, especially the Turkish Commercial Code, the Turkish Code of Obligations, the Labor Law, and competition legislation. For foreign investors, the issue is even more important because Turkey’s official investment framework gives international investors the same basic rights and liabilities as local investors and states that the conditions for share transfers are the same as those applied domestically.
At a conceptual level, the difference is straightforward. In a share purchase, the buyer acquires equity in the target company. In an asset purchase, the buyer acquires specific assets, business lines, or operations rather than the legal entity itself. Turkish competition rules expressly recognize that a concentration can arise through the purchase of shares or assets, through a contract, or through any other means, provided that the transaction creates a permanent change in control. That is why the choice between a share deal and an asset deal is not merely commercial; it is a structuring decision with legal consequences across multiple regulatory layers.
Why the structure matters in Turkish M&A
In Turkish practice, the correct structure depends on what the buyer actually wants to acquire. If the buyer wants the entire enterprise, including its contracts, operating platform, employees, and licenses, a share purchase will often be the natural starting point because the target company remains in existence as the same legal person after closing. If, on the other hand, the buyer wants only selected assets, one business division, one production line, or a defined portfolio of rights and obligations, an asset deal may be commercially preferable. Turkish law does not treat these two routes as interchangeable. Different rules apply to transfer formalities, counterparty consent, debt exposure, employee continuity, and registry or filing requirements.
This distinction is especially important in distressed transactions, carve-outs, family-owned groups, and cross-border acquisitions. A buyer may prefer a share deal when continuity is essential, but may prefer an asset deal when it wants to isolate part of the business or reduce exposure to legacy risks. That said, Turkish law does not allow parties to assume that liabilities disappear simply because they select an asset structure. Where a business or asset pool is transferred together with its passive side, the Turkish Code of Obligations contains specific rules on creditor notice and joint liability. Likewise, labor law may automatically move employees to the transferee when a workplace or part of a workplace is transferred.
Share purchase transactions under Turkish law
A share purchase in Turkey is usually the cleaner route when the buyer wants the target company as a going concern. As a structural matter, the company itself remains the same legal entity before and after the transaction; what changes is the ownership of its shares. In practical terms, that usually means the company’s contracts, workforce, and operating history stay where they already are, subject of course to any contractual change-of-control clauses, sector-specific approvals, or other special rules. This continuity is one of the main reasons share deals are common in Turkish private M&A, especially where the target’s operations are heavily integrated and the buyer does not want to rebuild the business contract by contract.
For joint stock companies under the Turkish Commercial Code, registered shares are, as a rule, transferable unless the law or the articles of association provide otherwise. The Code states that, unless otherwise stipulated, registered shares may be transferred without restriction, and that transfer by legal transaction may be completed through endorsement of the registered share certificate and transfer of possession to the transferee. This makes the joint stock company an especially flexible acquisition vehicle in Turkish M&A practice.
For limited liability companies, the position is more formal and usually more restrictive. Article 595 of the Turkish Commercial Code provides that the transfer of an LLC capital share and the underlying transaction creating the transfer obligation must be in written form and the parties’ signatures must be notarized. The same provision also states that, unless the articles of association say otherwise, the transfer requires general assembly approval, becomes valid with that approval, and may even be prohibited by the articles of association. This is one of the most important practical differences between a share purchase of a joint stock company and a share purchase of a limited liability company in Turkey.
Because of these rules, a share deal can be either relatively streamlined or relatively document-heavy depending on the target’s corporate form. A buyer acquiring a Turkish joint stock company may face fewer transfer formalities at the ownership level, while a buyer acquiring an LLC must examine the articles of association, consent rules, general assembly approval mechanics, and registration steps much more carefully. In practice, this means that early corporate due diligence is essential before the parties lock in a timetable for signing and closing.
The main advantage of a share purchase is continuity. The business usually continues in the same legal vehicle, which can simplify operational transition if the buyer wants the whole platform. The main disadvantage is that the buyer generally steps into ownership of a company that already has a legal and commercial history. For that reason, share deals in Turkey usually require broader diligence and stronger contractual protection, including warranties, indemnities, disclosure mechanisms, and price adjustment tools. That conclusion is not based on one isolated statute, but on the structural consequence of buying the legal entity rather than isolating selected assets.
Asset purchase transactions under Turkish law
An asset purchase is usually preferred where the buyer wants to acquire only part of the target’s business or wants to avoid buying the company as a whole. In commercial terms, this can allow the buyer to select factories, equipment, inventory, trademarks, receivables, customer relationships, or a specific line of business. Legally, however, an asset purchase in Turkey is often more fragmented than a share deal because the parties must test the transferability of each relevant component. The Turkish Code of Obligations separately regulates transfer of a business or asset pool, and also separately regulates contract transfer, which depends on agreement involving the remaining counterparty or on prior or later consent from that counterparty.
Article 202 of the Turkish Code of Obligations is especially important where a business or a pool of assets and liabilities is transferred together. It provides that a person who takes over an asset pool or a business with its assets and liabilities becomes liable to creditors once notice is given to creditors or, for commercial businesses, once the transfer is announced through the Trade Registry Gazette. The same article also states that the former debtor remains jointly liable with the transferee for two years, and that this two-year period begins from notice or announcement for due debts, and from maturity for debts becoming due later. In Turkish M&A practice, this rule is a major reason why an asset deal does not automatically eliminate liability concerns.
The contract side of an asset deal also deserves close attention. Article 205 of the Turkish Code of Obligations defines transfer of contract as an agreement through which the transferor’s entire contractual position passes to the transferee, and it expressly recognizes that this can occur where the remaining party to the contract has given prior consent or subsequent approval. As a practical matter, this means that if a Turkish asset deal includes customer contracts, lease rights, supply arrangements, or service agreements, the buyer cannot simply assume that all of those contracts move automatically without checking counterparty consent requirements.
Employment law is another critical issue in Turkish asset transactions. Article 6 of the Labor Law states that where a workplace or part of a workplace is transferred through a legal transaction, employment contracts existing at the transfer date move to the transferee with all rights and obligations. The provision further states that the transferee must respect the employee’s original start date for rights depending on seniority. It also makes the transferor and transferee jointly liable for debts that arose before the transfer and were payable at the transfer date, while limiting the transferor’s responsibility for those items to two years from the transfer.
The same Labor Law article also protects continuity of employment. It states that neither the transferor nor the transferee may terminate employment contracts solely because of the workplace transfer, and that the transfer itself does not create a justified termination ground for the employee. Economic or technological reasons and organization-based termination rights remain reserved, but the transfer alone is not enough. This is a crucial point for asset purchasers in Turkey who assume that workforce selection can always be handled by simple choice at closing. Turkish law may move employees with the transferred workplace or business segment whether the parties initially planned that result or not.
The main advantage of an asset purchase is selectivity. The buyer can often target the assets or operations it actually wants, which may be commercially attractive in carve-outs, distressed sales, and strategic acquisitions of only one line of activity. The main disadvantage is execution complexity. Because liability, contracts, employees, and notices may all require separate analysis, Turkish asset deals are often more document-intensive and more dependent on third-party cooperation than share deals. In practice, buyers choosing an asset structure usually spend more time mapping transfer mechanics than buyers choosing a straight share purchase of a functioning company.
Merger control applies to both structures
From a Turkish competition law perspective, both share purchases and asset purchases can trigger merger control. The governing communiqué provides that the acquisition of direct or indirect control over all or part of one or more undertakings through the purchase of shares or assets, through a contract, or through any other means qualifies as a merger or acquisition transaction if there is a permanent change in control. It also explains that control may arise through rights, contracts, or other tools that allow decisive influence, including operating rights over assets and influence over decision-making bodies.
The current thresholds remain highly relevant for transaction design. The Competition Authority’s 2025 overview report states that authorization is required if total Turkish turnover of the transaction parties exceeds TRY 750 million and the Turkish turnovers of at least two parties each exceed TRY 250 million, or if, in an acquisition, the target business, asset, or activity has Turkish turnover above TRY 250 million and another party has global turnover above TRY 3 billion. The same report also notes that transactions carried out abroad must still be notified if the Turkish thresholds are met, and that the Authority examined 416 merger and acquisition transactions in 2025, with final decisions arriving on average 10 days after the final date of notification.
Technology deals require even more caution. The communiqué defines technology undertakings broadly to include digital platforms, software and gaming software, fintech, biotechnology, pharmacology, agricultural chemicals, and healthcare technologies. It further states that in acquisitions of technology companies operating in the Turkish market, conducting R&D in Turkey, or providing services to Turkish users, the usual TRY 250 million threshold is disregarded in the way set out by the communiqué. That means both share deals and asset deals in the technology space should be screened very carefully for Turkish filing risk.
Foreign investors and cross-border execution issues
For foreign investors, Turkey’s legal framework is relatively open. The Investment Office states that Turkish FDI legislation is based on equal treatment, that foreign investors may have the same rights and liabilities as local investors, and that the conditions for transfer of shares are the same as those applied to domestic investors. It also explains that the FDI system is built on a notification-based rather than approval-based model. This is one reason Turkish M&A remains accessible to international strategic and financial investors.
However, cross-border execution still requires careful formalities. The same official guidance states that documents issued and executed outside Turkey must generally be notarized and apostilled, or alternatively ratified by the Turkish consulate, and then officially translated and notarized in Turkey. It also explains that the FDI Share Transfer Data Form is handled electronically through E-TUYS. In other words, foreign investors benefit from market access, but still need disciplined post-signing and post-closing compliance.
Due diligence focus differs by structure
The scope of due diligence should change depending on whether the deal is a share purchase or an asset purchase. Turkey’s official legal guide identifies the kinds of issues investors typically assess during the investment process, including business structures, labor law, property rights, competition law, access to finance, environmental law, public procurement, and personal data protection. In a share deal, that usually means a broader review of the target company’s full legal history. In an asset deal, the diligence focus often shifts toward transferability, counterparty consent, employee continuity, and whether the asset package is actually capable of moving in the way the buyer expects.
As a practical matter, this means the question is not whether one structure is universally “better,” but which one fits the commercial objective and the legal risk profile. A buyer who wants uninterrupted ownership of an operating business may prefer a share purchase and deal with risk through warranties and indemnities. A buyer who wants a narrower slice of value, or who wants to avoid acquiring the entire company, may prefer an asset purchase but must accept the heavier transfer workstream that Turkish law often requires.
Tax and transaction-cost considerations
Tax should also be modeled before choosing the route. Turkey’s official tax guide confirms that the Turkish system includes VAT at generally applied rates of 1%, 10%, and 20% for taxable goods and services, and also states that stamp duty applies to a wide range of documents, including contracts, and may be charged on an ad valorem or fixed basis. While the exact tax outcome depends on the specific asset class, document package, exemptions, and deal structure, the official tax framework itself is enough to show why the share-versus-asset decision should never be made without transaction-specific tax review.
Which structure is usually better?
There is no single answer under Turkish law. A share purchase is usually stronger where the buyer wants continuity, speed of operational transition, and ownership of the business as an intact legal entity. It is often the more natural route for acquiring a functioning Turkish company with ongoing commercial relationships. An asset purchase is usually stronger where the buyer wants to isolate part of the business, leave behind part of the enterprise, or structure a carve-out. But that selectivity comes with more transfer mechanics, more consent analysis, and more attention to labor and creditor rules.
Conclusion
In Turkish M&A, the decision between a share purchase and an asset purchase is fundamentally a decision about continuity versus selectivity. Share deals tend to preserve the legal shell and the operating platform, while asset deals allow the buyer to target specific assets or operations. Turkish law supports both structures, but it regulates them differently. Share transfers in joint stock companies are generally more flexible than transfers of LLC shares; business transfers can bring creditor-notice and joint-liability consequences; contract assignments may require counterparty consent; employee transfer rules may apply automatically; and both structures may trigger merger control if they change control and meet the thresholds.
For that reason, the best Turkish M&A transactions are usually the ones where the legal structure is chosen early, not late. Buyers and sellers who compare share and asset routes at the beginning of the process are better placed to price risk correctly, sequence approvals properly, and avoid avoidable closing surprises. In Turkey, structure is not a drafting detail. It is the legal architecture of the deal itself.
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