Basic Distinctions Between A Joint Stock Company and A Limited Liability Company
The following are the major distinctions between joint stock companies and limited liability companies:
- The minimum number of shareholders required is one for a joint stock company and also for a limited liability company. A limited liability company may not have more than 50 shareholders, bu no such maximum applies to joint stock companies.
- The minimum capital required for a limited liability company is TL 10,000 as opposed to TL 50,000 required for a joint stock company.
- A joint stock company is managed by its board of directors. A limited liability company does not have a board of directors but is managed instead by its general manager and its shareholders. All authorities of the shareholders relating to the management of a limited liability company may be granted to a general manager or one of the shareholders.
- In some circumstances, (such as the rightful termination of the company), the TCC offers to the minority shareholders in joint stock companies a stronger protection than it offers to those of a limited liability company. However, similar extra protection may also be provided for in the articles of association of a limited liability company.
- A limited liability company’s shareholders, unlike a joint stock company’s shareholders, may be liable for amounts owed by the limited liability company to government authorities for taxes, duties and charges if the company cannot make the required payments. In both company types, the representatives i.e. the manager in the limited liability company and the board of directors in joint stock companies have same personal liability.
- Any transfer of shares in a limited liability company must be approved by the general assembly. A share transfer in a joint stock company does not need to comply with such requirement. Shares may be transferred in private and such transfer may be subsequently approved by the board of directors if the share certificates are registered; if the share certificates are bearer; not even such a board resolution is required.
- Under the Turkish Commercial code, provisions relating to limited liability company governance are less developed and less clear than those relating to joint stock company governance.
- Limited liability companies may engage in almost all activities that joint stock companies are eligible for. The major exceptions to this end are the banking and insurance activities that may only be engaged in by a joint stock company.
- Only joint stock companies may be listed with stock exchanges.