Capital Reduction Services in Turkey

Capital reduction is a strategic financial process governed by the Turkish Commercial Code (TCC). Whether it is performed to offset losses or to return excess capital to shareholders, the procedure requires a meticulous legal and accounting approach to protect the rights of creditors and ensure regulatory compliance.

At Atlas Global Audit & Accounting, we manage the entire capital reduction process, ensuring a seamless transition for your company.

Key Requirements and the Legal Framework

According to the TCC, a capital reduction can only be executed if it is verified that the company’s remaining assets are sufficient to fully cover the rights of its creditors.

• CPA/Auditor Report:A comprehensive report must be prepared by a Certified Public Accountant (SMMM) or a Sworn-in CPA (YMM). This report confirms that the company’s assets are adequate to meet creditor claims despite the reduction.
• Creditors’ Protection:The law mandates a formal “Call to Creditors,” allowing them to request payment or security for their claims before the reduction is finalized.

The Step-by-Step Capital Reduction Process

1. Board Resolution:The Board of Directors (for JSCs) or Managers (for LLCs) prepares a proposal for the capital reduction.
2. Preparation of the Amendment Text:Drafting the new version of the company’s Articles of Association reflecting the reduced capital.
3. The Expert Report:Our experts prepare the required financial report stating that the reduction does not jeopardize the company’s ability to pay its debts.
4. General Assembly Resolution:Shareholders must convene to approve the capital reduction and the amendment to the Articles of Association.
5. Call to Creditors:A formal announcement is published in the Turkish Trade Registry Gazette to notify creditors.
6. Registration and Announcement:The final resolution is registered with the relevant Chamber of Commerce and officially announced.

Navigate the complexities of capital restructuring with confidence. Contact Atlas Global Audit & Accounting for professional guidance.