Turkey chapter of “Lexology GTDT – Joint Ventures 2020” written by Elvan Aziz, Togan Turan, Stephanie Beghe S\u00f6nmez and \u015eansal Erbac\u0131o\u011flu is published.<\/p>\n
The most common and standard forms of joint venture under Turkish law are contractual or simple partnerships, jointstock corporations (JSCs) and limited liability companies (LLCs).<\/p>\n
Contractual or ordinary partnerships are generally used for short-term joint venture relations, mostly in cases where the partners are personally involved in either the operations or financing of the project and are, therefore, comfortable with having broad liability in the partnership. The most important feature of a contractual or ordinary partnership is that it is a pass-through vehicle; the partners are directly exposed to any profts or loss, including all liabilities of the partnership.<\/p>\n
JSCs and LLCs are the most common types of joint venture model used by investors. In most cases, when the parties enter into a joint venture agreement or a shareholders\u2019 agreement, they create a contractual relationship to govern their relationships as shareholders of the company during the term of their joint venture. In both JSCs and LLCs, the joint venture partners\u2019 liability would be limited to the amount of capital they contribute into the joint venture entity. It is generally the case that JSCs are preferred over LLCs in joint venture transactions owing to the more flexible nature of JSCs, from both a corporate governance perspective and regarding shareholding relations of the partners, including transfer abilities. LLCs are preferred for small-scale operations.<\/p>\n
Although joint ventures may be recognised by the Turkish Code of Obligations (Law No. 6098) as similar to a simple partnership structure, they are not specifically governed under Turkish law.<\/p>\n