What is a Limited Company and Joint Stock Company? What are the differences?

What is a Limited Company and Joint Stock Company?

Limited company

According to the Commerce Department's data, there are about 750,000 maintained a limited liability company in Turkey. The most preferred type of company among contractors is the limited company. One or more natural or legal persons may establish a limited liability company. The number of partners is limited to 50. In addition, it is obligatory to have an auditor if the number of partners exceeds 20. The responsibility of the partners is limited to the capital they commit. In other words, the partners are not responsible for the debts of the company, they are only obliged to pay the basic capital shares they have committed and to fulfill the additional payment and side performance obligations stipulated in the company contract.

In order to establish a limited company, the capital of the company must be at least 8.000$, while there is no limit on the upper limit. At least 25% of the nominal value of the shares committed in cash is paid before registration, and the remaining portion is paid within 24 months after the registration of the company. It is mandatory for the company contract to be made in writing and the founder's signatures to be notarized.

There are some reasons why the type of company that is most preferred by contractors in practice is the limited company. The most important of these are;

There is no need for a large amount of capital for the establishment of the company,
The responsibility of the partners towards company debts is limited to the capital they commit,
Competition ban of partners in limited companies is not too tight,
With the new law, even a single person can now establish a limited company.
Management in limited companies is quite simple. Management is carried out by the general manager and authorized managers. Company representation and management and managers are authorized. In small limited companies, the manager is usually the owner. In practice, accounting work for small and medium-sized companies is usually done by financial advisors. Therefore, management costs are low in limited companies. Registration is not easy to organizations, more than lack of capital needs and for reasons such as low management costs of the vast majority of contractors in Turkey, serves a limited liability company under the title.

Incorporated company

Another type of company, Joint Stock Company, is a company whose capital is determined and divided into shares, and is only responsible for its assets due to its debts. Shareholders are only responsible for the capital shares they have committed, as in a limited company. Joint stock companies can be established for all kinds of economic purposes and issues that are not prohibited by law, as well as limited companies. Follow: SNT, System, Networking, Server, Virtualization, Technology, System Solutions, Network Solutions, Server Solutions. The founding capital of the company is at least 8.000$. If the registered capital system is chosen, the company capital should be at least 20.000$. At least 25% of the nominal value of the shares committed in cash is paid before registration, and the remaining portion is paid within 24 months after the registration of the company. Incorporated company; shall be established by the articles of association, in accordance with the law, where the signatures of the founders, which they undertake to pay the full capital, are notarized.

Real and legal persons who commit a share and sign the articles of association are founders of joint stock companies. The existence of one or more shareholders that are shareholders is essential for the establishment of a joint stock company. Joint-stock company establishment is almost the same as limited company.

In joint stock companies, the first board members are appointed by the articles of association. With the new law, the board of directors can now consist of a single person. The board of directors may delegate its authority of representation to third parties. Joint stock companies may go public and issue bonds for borrowing money, unlike limited companies. In addition, the company does not have to make share transfers before a notary. If joint stock companies sell their shares 2 years after the acquisition, tax is not paid to the shareholders due to the increase in value. Partners that are not members of the board of directors in joint stock companies are not responsible for public debts. In limited companies, each shareholder is responsible in proportion.

Joint-stock company establishment and operation is more detailed than limited company. However, with the changes made in the law recently, the types of joint stock companies and limited companies have started to be very similar. One of these two types of companies has no advantage over the other. However, in some different cases these two types of companies may have advantages and disadvantages. Whether you are a limited company or a joint stock company, the need for professional structures increases as the size of the company increases.