What is Partnership Limited by Shares (Komandit Anonim Şirket or K.A.Ş.) in Turkey ?

In Turkey, a Partnership Limited by Shares (Komandit Anonim Şirket or K.A.Ş.) is a business entity that combines elements of both limited liability companies (Anonim Şirket or A.Ş.) and limited partnerships (Komandit Şirket or K.S.). This unique form of company allows for a flexible business structure where certain partners have limited liability (shareholders) while others have unlimited liability (general partners).

In Turkey, the Partnership Limited by Shares is regulated under Turkish commercial law, and it offers a way for investors to participate in a business with varying levels of risk and control.

Here are the key characteristics and features of a Partnership Limited by Shares (K.A.Ş.) in Turkey:

A Partnership Limited by Shares is composed of two types of partners:

  • Shareholders (A.Ş.): Shareholders are akin to the shareholders in a regular joint-stock company (A.Ş.). They have limited liability, meaning their liability is limited to the amount of capital they have invested in the company.
  • General Partners (K.S.): General partners are similar to the general partners in a traditional limited partnership (K.S.). They have unlimited personal liability for the company’s debts and obligations. General partners are typically responsible for managing the business.

The capital of a K.A.Ş. is divided into shares, just like in a joint-stock company. Shareholders contribute capital by purchasing shares, and this capital forms the basis for their limited liability. General partners may also contribute capital, and their liability is unlimited, extending to their personal assets.

General partners are actively involved in the management and decision-making processes of the company. Shareholders, on the other hand, typically do not participate in the day-to-day management and have a more passive role.

The distribution of profits and losses is defined in the partnership agreement. Generally, shareholders are entitled to a portion of the profits, while general partners may receive a larger share, as they are responsible for managing the business.

The company’s name must include the words “Komandit Anonim Şirket” or the abbreviation “K.A.Ş.” in the company’s name. Shareholders’ identities are publicly disclosed, but the identities of general partners may remain private.

To establish a Partnership Limited by Shares, partners must draft a partnership agreement and register the company with the Trade Registry Office in the province where the company’s headquarters is located. The partnership agreement outlines the rights, responsibilities, and profit-sharing arrangements of the partners.

K.A.Ş. entities are subject to corporate income tax, and tax liability is calculated based on the company’s profits. Tax rates and regulations may vary depending on the company’s annual revenue and other factors.

The transfer of shares in a K.A.Ş. is typically straightforward and does not require the consent of other partners. However, the partnership agreement may include provisions regarding share transfers.

The dissolution of a K.A.Ş. can occur due to various reasons outlined in the partnership agreement or as specified by Turkish commercial law. Dissolution often involves the liquidation of assets and the settlement of liabilities.

Partnership Limited by Shares (K.A.Ş.) in Turkey offers a flexible business structure that can be appealing to investors seeking limited liability while still allowing for active participation in the management of the company. As with any business entity, it is crucial to consult with legal and financial professionals to understand the legal requirements and implications fully.

Azkan Group can support you in your Employer of Record (EOR) and payroll requests (also called Umbrella Company) in Turkey. We can manage your HR requests even if you don’t have a legal entity in Turkey.