What Should You Consider When Starting a Business?
What Should You Consider When Starting a Business? Starting a business in a productive city like Kahramanmaraş, with its strong entrepreneurial spirit, is a major goal for many people. However, building this endeavor on a solid legal foundation is essential for sustainability and success.
Unfortunately, many entrepreneurs in our country tend to overlook legal procedures, which over time leads to significant loss of rights, financial losses, and legal penalties.
In this article, I will discuss in detail the key legal steps to consider when starting a business.
1. Make Sure to Start With a Business Plan
The very first step in starting a business is conducting a thorough feasibility study.
Taking steps without first conducting a sector analysis, identifying your target audience, assessing the competition, determining your capital needs, and establishing a growth strategy could put you in a difficult position in the long run.
Seeking legal advice at this stage will help you anticipate any contractual risks you may face in the future.
“Identifying the needs of a society and working toward them will lead to success.”
For example, during the COVID-19 pandemic, freight transport became incredibly important.
2. Choose the Right Business Structure
According to the Turkish Commercial Code, there are five different types of companies in Turkey.
These are:
- Corporation,
- Limited Liability Company,
- General Partnership,
- Limited Partnership
(General Partnership / Limited Partnership with Capital Divided into Shares), - It is a cooperative.
The most common types of companies in Turkey are sole proprietorships, limited liability companies, and corporations.
Every type of company;
- Tax liability,
- Accountability structure,
- Capital requirements,
- Relationships among partners
leads to different outcomes in this regard.
Sole Proprietorships
The formation and dissolution processes for sole proprietorships are quick.
Accounting expenses are lower compared to other types of companies.
Taxation is progressive with respect to income tax.
It varies depending on annual income.
However, in terms of business liability, it imposes direct and absolute liability on the business owner.
“We recommend that you consult with financial advisors who specialize in this area, particularly regarding the financial aspects.”
Limited Liability Company
The limited liability company is the most commonly chosen type of business entity.
It can be established by a single individual or as a partnership.
Under the amendment made to Article 580 of Law No. 6102, the minimum capital requirement for limited liability companies has been increased from 10,000 TL to 50,000 TL.
Assets that can be valued in cash may also be contributed as corporate capital.
In this context, at least one-fourth of the initial capital must be paid in prior to registration.
The liability of the partners is limited to the capital they have contributed.
Corporation
Corporations are particularly preferred for larger-scale businesses and companies that may go public.
It can be established with a single partner, and there is no upper limit on the number of partners.
The minimum capital requirement for joint-stock companies that have not yet gone public has been raised to 500,000 TL.
The partners’ shares are transferable.
As in limited liability companies, the partners’ liability is limited to the capital they have committed.
These transactions are subject to corporate income tax.
This is a type of company that entrepreneurs seeking to work with national or international investors on high-budget projects may choose.
3. Commercial Lease Agreement and Location Selection
If you are renting a commercial space, you must draw up a detailed written lease agreement.
In this context, the main points to consider are:
- The lease term,
- The rent increase rate,
- The deposit amount,
- The intended use of the premises and its licensing status,
- Renovation permits,
- Cost-sharing arrangements,
- Termination conditions
creates.
In addition, the leased property must be eligible to obtain a business license from the municipality.
“Conducting commercial activities in a location where a license has not been obtained may result in both a fine and a closure order.”
4. Licenses, Permits, and Operating Documents
Including, first and foremost, the municipal business establishment and operating license;
- Approval from the Provincial Directorate of Agriculture for food establishments,
- A license from the Ministry of Health for businesses operating in the healthcare sector,
- Environmental Impact Assessment (EIA) reports for businesses that impact the environment,
- Exclusive permits related to the area in which the business operates,
In addition to the above, additional permits and documents may be required.
Failure to obtain these documents will result in both the suspension of operations and substantial administrative fines.
Company Formation via MERSIS
Users can start the company formation process by creating a free account on the MERSİS website at https://mersis.gtb.gov.tr/.
When drafting a company contract in MERSIS, Turkish citizens can be added as partners or authorized representatives using their ID numbers, while foreign nationals can be added using their passport numbers.
However, to complete this process, foreigners must first obtain a tax ID number from the tax office and then apply to the Commercial Registry Office to register themselves in MERSIS.
The signatures of the persons authorized to represent the company must be certified by the competent authority, and their signature declarations must be prepared.
In Turkey, this procedure can be carried out at any commercial registry office.
Result
The success of a business depends not only on a good idea but also on a solid legal foundation.
Entrepreneurs taking the right legal steps during the startup phase;
- To prevent any disputes that may arise in the future,
- To prevent financial losses,
- To ensure sustainable growth
is of great importance in this regard.
“Proper planning and legal safeguards are the strongest foundation for entrepreneurship.”
Best regards,
Attorney İdil Zeynep Yağlıca
