Special Purpose Determination Reports

Overview

For capital changes in joint stock and limited liability companies, and for transactions such as mergers, demergers and changes of legal form, the trade registry directorate (ticaret sicili müdürlüğü) requires a report containing certain determinations on the capital and equity. The Trade Registry Regulation (Ticaret Sicili Yönetmeliği) provides that these reports may be issued by a sworn-in certified public accountant (YMM) or a certified public accountant (SMMM) and, if the company is subject to audit, also by the auditor. (Trade Registry Regulation, Art. 73, 94, 126, 128, 130) The only exception is capital reduction: in joint stock companies whose incorporation and amendments to the articles of association are subject to Ministry permission, this report is issued only by a sworn-in certified public accountant (YMM). (Trade Registry Regulation, Art. 79/1-ç)

Under Law No. 3568, the profession of certified public accountant (SMMM) covers examination, analysis and review based on documents, and the preparation of written opinions and reports on financial statements. (Law No. 3568, Art. 2/A) Certification (tasdik) of financial statements and tax returns, by contrast, is a power granted only to sworn-in certified public accountants (YMM). (Law No. 3568, Art. 2/B, 12)

These reports are not independent audit reports and do not contain an audit opinion. The auditor referred to in the Regulation is a sworn-in certified public accountant (YMM) or certified public accountant (SMMM) authorised to perform independent audits by the Public Oversight, Accounting and Auditing Standards Authority (KGK), or an audit firm whose partners are such persons. (Turkish Commercial Code No. 6102, Art. 400/1) The valuation of capital in kind is likewise the task of an expert (bilirkişi) appointed by the court. (TTK Art. 343)

KEYBIZ CPAs & Advisors, as a certified public accountant (SMMM), prepares the reports that an SMMM may issue on the basis of the company’s statutory books and documents; for reports that must be issued by a sworn-in certified public accountant (YMM), an auditor or a court-appointed expert, it prepares the necessary financial data and statements. For the registration process for amendments to the articles of association, see our Amendments to the Articles of Association page.

Capital Loss and Over-Indebtedness

Loss of half: If, according to the latest annual balance sheet, half of the total of the capital and the statutory reserves has become uncovered due to losses, the board of directors immediately calls the general assembly to a meeting and presents the remedial measures it deems appropriate. (TTK Art. 376/1)

Loss of two-thirds: If this ratio reaches two-thirds, the general assembly meets without delay. If the general assembly does not resolve to content itself with one-third of the capital or to replenish the capital, the company is automatically dissolved. (TTK Art. 376/2)

Over-indebtedness: If there are indications giving rise to a suspicion of over-indebtedness (borca batıklık), the board of directors draws up an interim balance sheet in which the assets are valued both on a going-concern basis and at their probable sale prices. If the assets do not cover the claims, the board of directors notifies the commercial court of first instance at the place of the company’s registered office. The subordination declaration of creditors is verified by an expert appointed by the court. (TTK Art. 376/3)

Statements used in the calculation: The determination is made on the basis of the financial statements prepared under TTK Art. 88. (TTK Art. 376 Communiqué, Art. 13) Under provisional Article 1 of the Communiqué, foreign exchange losses arising from foreign currency liabilities not yet paid may be disregarded in the calculation, together with half of the rent, depreciation and personnel expenses accrued in 2020 and 2021. By an amendment dated 10.10.2026, this temporary rule has been extended to 1.1.2028.

TTK Art. 376 itself does not require a YMM or SMMM report for this calculation; the interim balance sheet is drawn up by the board of directors. A report is required for the merger of a company that has a capital loss or is over-indebted. (TTK Art. 376 Communiqué, Art. 14; Trade Registry Regulation, Art. 126/4) KEYBIZ CPAs & Advisors prepares the balance sheet and ratio calculations to be used by the board of directors.