TRANSFER OF COMMERCIAL ENTERPRISE

A commercial enterprise is defined in Article 11 of the Turkish Commercial Code as an enterprise that conducts activities continuously and independently with the aim of generating income exceeding the limit stipulated for small businesses. Accordingly, for an enterprise to be considered a commercial enterprise under the law, it must meet the following criteria:

• Generating income beyond the level of a small business,
• Continuity,
• Independence,
• The goal is to generate income.

The transfer of commercial enterprises is regulated under the Turkish Commercial Code (TTK). Article 202 of the TTK examines the transfer of a commercial enterprise as the acquisition of a commercial entity with its assets and liabilities.

Formal requirements for the transfer of a commercial enterprise

• As a prerequisite for the transfer of a commercial enterprise, the contract providing for the transfer of the commercial enterprise must be existing and valid.
• A transfer agreement for the transfer of a commercial enterprise must be in writing.

Formal requirements of the contract in the transfer of a commercial enterprise

The contract to be drawn up for the transfer of a commercial business must include the following points:

• The full name or title of the parties and their address for official notification.
• Exclusions from the contract regarding the commercial enterprise.
• An unconditional statement that the commercial enterprise is transferred as a whole and in a manner that ensures its continuity.
• The commercial enterprise's selling price and payment terms.

Consequences of business transfer

• According to the Turkish Commercial Code, the following consequences occur when a commercial enterprise is transferred:
• If a person transfers a commercial enterprise, they lose their status as a "merchant" unless they own another commercial enterprise
• Upon the transfer of a commercial enterprise, all elements permanently allocated to the business are transferred to the transferee
• The transferee becomes liable to the creditors for the debts incurred in the assets or business from the date the transfer of the business is notified to the creditors or announced through a notice published in the Trade Registry Gazette for commercial enterprises, or in one of the newspapers distributed throughout Turkey for others.
• The company's liabilities are transferred to the transferee without the consent of the creditors.

What are the consequences of transferring a commercial enterprise? What are the formal requirements stipulated by the Turkish Commercial Code for the transfer of a commercial enterprise? How should a contract be prepared for the transfer of a commercial enterprise? What formal requirements are necessary for the validity of the contract and the interests of the parties? How long does the transfer of a commercial enterprise take? How beneficial is experienced legal support during these processes? For more information on similar matters, you can obtain consultancy services from our experienced commercial law attorneys.