Buying a company in Türkiye: due diligence and what comes with it

The acquisition closes. In the first month a social security debt surfaces, in the second a former employee's claim is served, in the third you learn the warehouse lease cannot be transferred. With the shares you bought the past: the legal entity did not change, so neither did its liabilities.

The basic choice

In a share deal you acquire the company itself, with everything known and unknown attached. In an asset deal you take only the assets you select and historic liabilities stay with the seller. The asset deal is safer for a buyer but is not always available: permits, licences, lease and supply contracts are often non-transferable or require consent. Where value sits in non-transferable licences, the share deal becomes unavoidable — and protection then has to come from the contract.

How transfer actually happens

• Limited company — a notarised transfer agreement, a shareholders' resolution and registration with the trade registry. Miss a step and the transfer is not complete.
• Joint stock company — registered shares pass by endorsement and entry in the share ledger. If no share certificates were issued, the transfer follows assignment rules instead, which changes both procedure and tax treatment.

What the review covers

1. Shareholding structure, share ledger, privileges and any existing shareholders' agreement
2. Tax and social security position, and any open audits
3. Employment: severance exposure, live claims, unpaid entitlements, health and safety compliance
4. Contracts, particularly change of control clauses giving the counterparty a right to terminate
5. Real estate, mortgages, attachments and guarantees given by the company
6. Permits and licences, and whether they survive the transaction
7. Intellectual property: whether the trade mark and the software are in fact registered to the company

Diligence is not there to talk you out of the deal. It is there to set the right price and the right security.

Turning findings into protection

Every risk identified is met one of three ways: a price reduction, a seller warranty, or retention of part of the price for a defined period. Do not rely on warranties alone — if the seller cannot pay, the best-drafted indemnity is unenforceable. In practice, retained consideration is the most effective protection there is.

Approvals shape the timetable

Transactions above defined turnover thresholds require clearance from the Turkish Competition Authority; without it the deal does not take effect and an administrative fine follows. Regulated sectors — banking, insurance, energy, telecoms — need their own regulator's consent as well. These processes set the date on which you can close, and the agreement has to be written to match.