Turkish law requires joint-stock companies meeting the relevant capital threshold to engage legal counsel. The publication explains the scope, practical requirements and sanctions associated with this obligation.
Under Article 35(3) of Attorneyship Law No. 1136, joint-stock companies with a share capital equal to or exceeding five times the minimum share capital prescribed by the Turkish Commercial Code must retain legal counsel under contract.
Article 73/A of the Regulation on the Attorneyship Law, headed 'Conclusion of the Agreement and Mandatory Provisions', provides that continuous legal services must be governed by a written agreement compliant with the Attorneyship Law and the Minimum Attorneyship Fee Tariff. The lawyer must submit a copy of that agreement to the bar association with which the lawyer is registered.
Does the Obligation Apply to Every Joint-Stock Company?
Every joint-stock company whose share capital is at least five times the minimum amount specified in Article 332 of the Turkish Commercial Code must retain legal counsel.
Following an amendment made in 2023, the minimum share capital prescribed by the relevant provision of the Turkish Commercial Code was set at TRY 250,000 with effect from 2024.
Accordingly, five times that amount is TRY 1,250,000. Under Article 35(3) of the Attorneyship Law, joint-stock companies with share capital of TRY 1,250,000 or more are therefore subject to the obligation.
More specifically, the obligation applies to companies incorporated and registered with initial capital of TRY 1,250,000 or more. It also applies, following registration of the increase, to companies incorporated below that threshold whose capital later exceeds it through a capital increase or another method.
The share capital does not need to have been paid in full for the obligation to arise.
Monitoring Companies Subject to the Obligation
Article 73/C of the Regulation, headed 'Legal Persons Acting Contrary to the Law and the Annual Report', provides that the bar association where a legal person's registered office is located must file a criminal complaint regarding breaches of Article 35(3) of the Attorneyship Law.
Bar associations monitor compliance by joint-stock companies and issue formal notices to the relevant companies.
A company must respond within ten days of service. If counsel is employed by the company, payroll records for the previous three months may be submitted. If counsel is engaged independently, a copy of the self-employment receipt or another payment document showing the relevant fee will be sufficient.
Where more than one employed lawyer works for the company, it is sufficient to submit the payroll records of one lawyer.
Penalties and Sanctions for Non-Compliance
A breach of this requirement is classified as a misdemeanour and is punishable by an administrative fine.
Under Article 35(3) of the Attorneyship Law, the public prosecutor may impose, for each month in which contractual counsel was not appointed, an administrative fine equal to twice the gross monthly minimum wage applicable on the date of the offence to workers over the age of sixteen in the industrial sector.
Conclusion
This obligation is important for joint-stock companies and is actively monitored. Non-compliance can result in significant recurring administrative fines.
To avoid these fines, companies within the scope of the rule should appoint contractual counsel and obtain the legal support required for the relevant matters.
This content is provided for general information only and does not constitute legal advice.