Principles of Asset and Business Transfers under Turkish Law

In Turkey, there is no single law governing asset or business transfers. Instead, the framework is spread across several codes, primarily the Turkish Code of Obligations (TCO) and the Turkish Commercial Code (TCC).

Liability under the TCO

• Article 202: Whoever acquires an asset or business as a whole (all assets and liabilities) becomes responsible for its debts. This liability starts once creditors are notified directly or an announcement is published in the Trade Registry Gazette (for businesses) or a national newspaper.
• The former owner remains jointly liable with the acquirer for two years:
  • For due debts → from the date of notification/announcement.
  • For future debts → from the date the debt becomes due.
• If notification/announcement is not made, the two-year joint liability period does not begin.
• Article 203: In case of a merger, all creditors may claim their receivables from the new or acquiring entity.

Provisions under the TCC

• Article 11: Defines the scope and transfer of a commercial enterprise.
• Articles 134–158: Regulate mergers in detail.

Other Key Legal Considerations

• Competition Law: Article 7 of Law No. 4054 prohibits mergers/acquisitions that create or strengthen market dominance. Transactions exceeding turnover thresholds require Competition Authority approval.
• Tax Liabilities:
  • Corporate Tax: Asset transfers may create taxable income for the seller.
  • VAT: Generally applied on the sales value of transferred assets (standard rate 18%; reduced rates 1% or 8% may apply). Incentives may reduce VAT burden.

Main Legal Sources

• TCO: Articles 202–203
• TCC: Articles 134–158
• Enforcement and Bankruptcy Law: Article 280
• Law on Collection of Public Receivables: Article 30
• Competition Law: Article 7

In summary: An acquirer who takes over a business with all assets and liabilities is legally responsible for its debts and receivables. A smooth transfer requires careful review of the TCO, TCC, competition rules, tax obligations, and sector-specific regulations.