How to Establish a Company? What are the Required Documents to Start a Business?

What should you pay attention to when establishing a company? In this blog content, we will examine company types, company establishment steps, and required documents in detail.

Recently, especially with the effect of the pandemic, people have started to either establish their own businesses directly or look for a second source of income through their existing jobs. Some are looking for ways to earn income as freelancers by utilizing their knowledge, while others are doing e-commerce to generate profit.

Whatever the case, if you want to start your own business, you need to establish at least a sole proprietorship. If you wish to carry out large-scale commercial activities, it may also be beneficial for you to establish a limited liability or joint-stock company.

In our country, the only way to engage in trade without establishing a company is to benefit from the artisan exemption. The main condition for this is that you produce the products you will sell at home without using industrial-type machinery. The details regarding the artisan exemption are included in Article 9 of the Income Tax Law.

Before establishing your company, do not forget to check your trade name, create the articles of association via MERSİS, and submit your KOSGEB application prior to establishment.

Steps to Establish a Company

The first step in establishing a company is to decide what type of company you want to set up. You must decide whether to establish a sole proprietorship or consider other options depending on the needs of your business.

We can talk about different criteria in choosing the company type. Decisions should be made by considering these criteria before the establishment. For example, regarding earnings expectations, if your annual earnings expectation is around 100-200 thousand TL, we can say that establishing a sole proprietorship will meet your needs. If you aim to exceed this amount, it would be more appropriate to establish a company that will be a corporate tax payer.

The main situation to consider regarding future issues such as receiving investment, transferring the company, and acquiring real estate is your special conditions. In other words, one of the criteria may direct you to establish a sole proprietorship, but you may face a legal restriction stating that only joint-stock companies can perform the business you will do. According to another example, all criteria might tell you to establish a limited liability company, but if you qualify for the young entrepreneur exemption, you can review the criteria accordingly and decide that establishing a sole proprietorship is more suitable.

Establishment of a Limited Liability Company

The first stage of establishment is the preparation of the articles of association. For this, the company name is determined through the mersis application of the chamber of commerce and sent to the relevant chamber for approval. Afterwards, the partners, directors, and members of the company are specified in the articles of association. In addition to this information, the fields of activity of your company must also be included in the articles of association. After all this information is determined, MERSİS is logged into and the potential tax number and tax office details are obtained from the system.

Today, the obligation to block one-quarter of the capital in limited liability companies has been abolished. For this reason, it is sufficient to transfer 10,000 TL, which is the minimum capital amount required for the establishment of a limited liability company, to the company account within 2 years. After all these stages are completed, an appointment must be made with the Chamber of Commerce for the trade registry registration of the company, and this process must be completed.

Establishment of a Joint-Stock Company

The stages of establishment can be listed as follows:

• Preparation of the articles of association

• Approval of the articles of association in the trade registry

• Obtaining a potential tax number

• Depositing the relevant amount of capital into the bank

• Paying the Competition Authority's share, which is four in ten thousand of the capital

• Submitting the documents required for establishment to the trade registry

• Submitting the opening notification to the tax office

• Registering with the relevant chamber if any (such as chamber of industry, professional chamber)

The first stage of establishment, just like in a limited liability company, is the preparation of the articles of association. After determining the company title, the members of the general assembly and board of directors are determined and included in the articles of association. The company's fields of activity must also be specified in the articles of association.

In fact, when we look at it in a general sense, the establishment of a joint-stock company and the establishment of a limited liability company are almost identical. Aside from some minor differences in the process, unlike limited liability companies, one-fourth of the minimum capital amount of 50,000 TL (or this amount if your capital is higher) in joint-stock companies is deposited and blocked in the bank. Then, the relevant documents are submitted to the trade registry.

The chamber of commerce completes the establishment by creating the necessary books. Following the chamber of commerce processes, the establishment of the company is reported to the relevant tax office, and finally, registration is made with the relevant professional chamber if necessary.

In fact, your company is established with the tax audit. However, business owners should decide on the invoice type they will use immediately after this process, and make agreements with marketplaces if necessary.

WorqCompany is a financial technology start-up company developed by software teams according to the needs of your company, helping you manage all your financial processes such as accountant management and pre-accounting services, e-invoices, income-expenses, and capital after establishing your company.