Entrepreneur's Handbook
STARTING TO BUSINESS
The person who is called an entrepreneur in terms of business science is referred to by different names in law such as tradesman, craftsman, merchant, entrepreneur. These people are those who are mentioned as "everyone" in article 48 of our Constitution and have the right to establish an enterprise. If these people run the business on their behalf, even partially, they will have the status of merchants and tradesmen. If they operate the business through the partnership or company they will establish, they have the status of partner or shareholder / shareholder.
Each status in question causes different rights and responsibilities to be assumed. Factors such as the anticipated annual business volume and field of activity of the enterprise to be established significantly affect the entrepreneur's legal status (his / her title) and the rights and responsibilities of this status. Sometimes, the entrepreneur's assets are separate from the company's assets. The entrepreneur and the company they will establish may have separate rights and responsibilities.
Right and responsibility are like twin brothers. The entrepreneur should determine the legal status of the undertaking, taking into account the rights and responsibilities that the entrepreneur may have and the undertaking to be established. An enterprise (commercial enterprise or tradesman enterprise) can be operated by natural persons or legal entities. If it is to be run by real persons, entrepreneurs have the right to use the title of tradesman, craftsman or merchant and bear their responsibilities. If the person is a merchant, he is registered with the trade, industry or maritime trade registry, if the person is a tradesman, he is registered with the registry of tradesmen and craftsmen. After registration, it is registered in the relevant chamber. Legal entities can operate commercial enterprises either as a partnership or as a company. They register with the relevant chamber of commerce, industry or maritime commerce.
Factors such as the field of activity, the annual business volume and the rights and responsibilities of the tradesman, trader or company shareholder and the rights and responsibilities of the company are effective in determining the legal status of the undertaking to be established. Certain activities such as banking and insurance cannot be carried out by tradesmen, craftsmen, real person merchants, or by every partnership or company. It can only be done by licensed joint stock companies or cooperatives. Those who base their economic activity on their physical work together with their capital and whose earnings are sufficient to gain the qualification of merchants or industrialists cannot operate a tradesman or a commercial enterprise. Being a company shareholder may result in the partner being responsible for all its assets or limited liability only to the amount of capital that it undertakes to put in the company to be established.
1.1. Tradesman-Merchant Distinction
The legal scope of the concepts of the tradesmen and the tradesmen businesses they run and the merchant and the commercial business they operate are different from those used in daily language. However, there are common aspects in the legal definitions of the concepts. For example, while in Article 11 (1) of the Turkish Commercial Code numbered 6102, the commercial enterprise is defined as "the enterprise where the activities aiming to generate income exceeding the limit foreseen for the tradesmen are carried out continuously and independently" In article 15 (1) of the same Law and article 3 (a) of the Tradesmen and Craftsmen Professional Organizations Law numbered 5362; tradesman is defined as "… Who bases its economic activity on physical work together with its capital and whose earnings do not gain the qualification of a trader or an industrialist,….". Therefore, the amount of income anticipated to earn is decisive in determining whether a person is a tradesman or a trader. The boundary between the commercial enterprise and the tradesman enterprise is determined by Presidential Decree. Tradesmen may be exempt from income tax, they may not be obliged to keep a commercial book, merchants cannot be exempt from tax, they have to keep a book (Article 9 of the Income Tax Law No. 213, Article 173 of the Tax Procedure Law). The obligation to keep books brings the burden of paying fees to the accountant. Wages such as bookkeeping, declaration preparation, establishment transactions, tax and SSI (Social Security Institution) transactions, dispute and settlement transactions, etc. are determined according to work groups and the number of workers. This burden can be taken into account in determining the type of enterprise to be established, its location and the number of workers it will employ.
A person who runs a business on his behalf, even partially, is called a merchant. Anyone who has notified the public that he established and opened a commercial enterprise through circulars, newspapers, radio, television and other advertisement means, or who declared his business by registering his business with the trade registry, is considered a merchant even if he has not actually started the business. A person who acts as a partner as if he has opened a commercial enterprise, either on his behalf, on behalf of an ordinary company or another company that is not legally deemed to exist by any means, shall be liable to third parties with good intentions as a merchant (TCC Art.12). A person who runs a business in violation of a prohibition arising from the law or a judicial decision, or without the permission or approval of another person or an official authority due to his personal situation or the nature of his business or his profession and duties, is also considered a merchant. (TCC Art. 14 (1). Trade companies, foundations, associations that operate a commercial enterprise to achieve their purpose, and institutions and organizations established by the state, special provincial administrations, municipalities and villages and other public legal entities to be managed or commercially operated in accordance with the provisions of private law in accordance with their own founding laws are also considered merchants. (Turkish Commercial Code (TCC) Art. 16 (1).
The merchant is subject to bankruptcy for any debt; it is also obliged to choose a trade name, register its commercial enterprise with the trade registry and keep the necessary commercial books (TCC Art. 18 (1). It is essential that a merchant's debts are commercial. However, if a trader, who is a real person, clearly informs the other party that it is not related to his commercial business at the time he performs the transaction, or if the business is not suitable to be considered commercial, the debt is deemed ordinary. Contracts that are commercial business for only one of the parties are considered as commercial business for the other, unless otherwise provided in the law (TCC Art. 19).
While the title that the merchants have to use distinguishes the merchant from the others, the merchants can also use the business name that distinguishes their commercial enterprises from other commercial enterprises. In case of registration, business names are protected like titles.
1.2. Capital
In order to establish a business, it is necessary to have capital as well as entrepreneurial capacity. Depending on the legal structure of the enterprise to be established, different values can be added as capital. Generally speaking; shares belonging to money, receivables, negotiable instruments and capital companies, intellectual property (trademark, patent / utility model, design etc.) rights, rights to use and use movable and all kinds of immovables, movable and immovables, personal labor, commercial reputation, commercial enterprises, all kinds of values that can be transferred and evaluated in cash, with the right to use transferable electronic media, values such as fields, names and signs, mining licenses and other rights with economic value, can be put as capital (TCC Art.127). However, it should not be forgotten that before the so-called capital in kind except cash and personal labor, their value should be determined by court. Another point that should not be forgotten is that it is mandatory to put a minimum amount of capital for some businesses.
1.3. Kind of Business
It is possible to classify companies according to the laws that enable them to be established. The companies that can be established in accordance with the Turkish Commercial Code consist of collective, limited partnership, joint stock, limited and cooperative companies. Among these, the collective and the limited company are considered to be private companies; A joint stock company, limited liability company, and a limited partnership divided into shares, are considered to be capital companies (TCC Art. 124). Roughly speaking, what is meant by the sole proprietorship is that the individuals of the founders or partners are important. Similarly, the concept of capital company is the companies in which the shares represented by the capital they have committed or put are more important than the personality of their founders, partners and shareholders. Thus, it should be noted that personal labor cannot be invested in private companies and capital companies as capital. Although the cooperatives are established according to the Cooperatives Law No. 1163, they are commercial companies in terms of the Turkish Commercial Code. Ordinary partnerships that can be established in accordance with the Turkish Code of Obligations No. 6098 are also private companies. Businesses can be established within the scope of the Tradesmen and Small Craftsmen Law No. 507.
In private companies, as long as the company continues, the personal creditor of one of the partners can take his right from the dividend of that partner and from the liquidation share if the company is dissolved. In capital companies, creditors can seize and convert the shares of their debtors, bound or not bound in a year, in addition to taking their receivables from the profit or liquidation share of that partner.
When establishing a business, it can be taken into account whether the founders are responsible for the personal assets of the partners due to the activities of the business to be established, whether a minimum capital is required, and whether they can perform all kinds of activities. The table below shows some issues that can be taken into account in the establishment of businesses (companies or partnerships). It should also be noted that some activities such as banking and insurance will only be carried out by joint stock companies or cooperatives.
|
Type |
Responsibility of Entrepreneur |
With At Least How Many People |
Possible Capital |
Minimum Capital |
|
Tradesmen Business |
Limitless |
1 |
Labor, cash, same values |
- |
|
Commercial company |
Limitless |
1 |
Labor, cash, same values |
- |
|
Ordinary Partnership |
Limitless |
2 |
Labor, cash, same values |
- |
|
Collective Company |
Limitless |
2 |
Labor, cash, same values |
- |
|
Commandite Company |
Limited or Limitless |
2 |
Labor, cash, same values |
- |
|
Incorporated company |
Limited |
1 |
Cash, same capital |
50.000.00 |
|
Limited company |
Limited |
1 |
Cash, same capital |
10.000.00 |
|
Cooperative |
Limited |
7 |
Cash, same capital |
Depending |
There is no direct link between an enterprise being considered an SME (Small and Medium Sized Enterprise) and the type of enterprise. In order to be considered as an SME, the number of personnel, annual net revenue and annual financial balance sheet are taken into account. However, an enterprise considered an SME may have exceeded the boundaries of the tradesman enterprise.
Establishing a business with a partner can result in the sharing of profit and management on the one hand, and the sharing of risk and the combination of experiences on the other hand. In cases where the Law does not stipulate minimum capital, capital is required as much as the nature of the work. In cases where the minimum capital is stipulated, ¼ of the committed capital is paid in advance and the rest is paid to the company within three years. While capital companies and cooperatives have separate legal entities from their partners, tradesmen and merchant enterprises and ordinary companies do not have separate legal entities. In companies with legal personality, there are also cases where the company is responsible for the debts of the company and the limited company partners can be held personally responsible for the SGK premiums. However, in case of breach of integrity rules, it is also possible that the legal entities of the companies can be removed by the court and the partners / shareholders can be held unlimitedly liable for the debts of the company.
The processes and procedures for establishing trading companies and cooperatives are more complex. This process is illustrated below.
Although the freedom of contract requires that the contract be prepared as the parties of the contract want, the elements of the TCC for the relevant company should be included in the articles of association of the trading companies. In case of deficiency, the registration of the company can be made after the necessary amendments are made in the contract. This causes wasted effort, time and money. Legal personality is acquired by registration.
Limited companies' contracts must contain at least the following:
- a) Company's trade name and location of headquarters,
- b) The company's field of operation with its essential points specified and defined,
- c) Nominal amount of basic capital, number of basic capital shares, nominal values, privileges, if any, groups of basic capital shares,
- d) Names, surnames, titles, citizenship of the managers and
- e) The form of the announcements to be made by the company (TCC Art. 576). In the titles, expressions that show the type of company such as limited company, joint stock company, unlimited company and limited liability company should also contain expressions that will distinguish it from other companies. In other words, the title to be determined should be such a title that it should not be confused with other companies. During the registration phase, similar titles are not registered. If it is understood that it resembles another title later, the first registrant can file a lawsuit for the change of the title.
1.4. Completing the Establishment of the Business
Upon the establishment or deemed to have been established of an enterprise, a tradesman enterprise must be registered with the relevant chambers of tradesmen and craftsmen, and a commercial enterprise with the relevant chamber of commerce, industry or maritime commerce and they must complete processes such as keeping their commercial books certified, establishing their liability at the relevant tax office, and registering the workplace in the relevant SSI Directorate if necessary. Failure to make the necessary registrations or notifications in time may result in fines being paid. Some of these notifications should be made on behalf of the company, and some should be made on behalf of both the company and its partners. For example, taxable tradesmen and craftsmen, self-employed, corporate taxpayers, collective and ordinary company partners and active partners of limited partnerships must notify the relevant tax office to start work (VUK art. 153).