Legal Counsel Requirement for Joint-Stock Companies in Turkey
Turkish corporate law imposes a range of obligations on joint-stock companies (anonim şirket) due to their scale, structure, and economic significance. Among these obligations, one that is frequently overlooked — particularly by foreign investors establishing or managing companies in Turkey — is the mandatory requirement to retain a contracted lawyer. This requirement is not merely a bureaucratic formality; it carries real financial consequences and plays a meaningful role in ensuring that companies operate within the boundaries of Turkish law.
The Legal Basis
The obligation stems from Article 35, Paragraph 3 of Law No. 1136, the Turkish Bar Association Act (Avukatlık Kanunu). The provision reads:
“Joint-stock companies whose founding capital is five times or more the minimum capital amount stipulated in Article 272 of the Turkish Commercial Code, as well as construction cooperatives with one hundred or more members, are required to retain a contracted lawyer.”
While this provision originally referenced the old Commercial Code No. 6762, the current Turkish Commercial Code No. 6102 — specifically Article 332 — governs the minimum capital threshold today. Following Presidential Decree No. 7887 dated November 25, 2023, the minimum founding capital for joint-stock companies was raised from TRY 50,000 to TRY 250,000. Since the legal threshold is five times this amount, joint-stock companies with a registered capital of TRY 1,250,000 or more are required to retain a contracted lawyer as of 2025.
It is worth noting that this obligation applies exclusively to joint-stock companies operating under the standard founding capital system. Companies incorporated under the Capital Markets Law, or those operating under a registered or variable capital system, fall outside the scope of this requirement. Construction cooperatives with 100 or more members are similarly covered by the same provision.
What “Retaining a Lawyer” Actually Means
A common misconception is that employing an in-house lawyer (şirket avukatı) satisfies this requirement. It does not. Turkish law draws a clear distinction between an employment contract and a legal services agreement (avukatlık sözleşmesi). An in-house lawyer is engaged through an employment relationship, which is governed by labor law — not by the professional framework envisioned under the Bar Association Act. The law specifically requires an independent attorney, registered with any bar association in Turkey, to provide legal consultancy services under a formal contract.
Under Article 73/A of the Regulation on the Implementation of the Bar Association Act, this contract must be in written form and prepared in three copies, with one copy submitted by the attorney to the bar association where they are registered. The agreement must clearly define the scope of services, the duration of the engagement, the payment terms, and the conditions for termination. The company is required to pay at least the minimum fee specified under the Attorney Minimum Fee Schedule (Avukatlık Asgari Ücret Tarifesi) on a monthly basis, and the attorney must issue a self-employment receipt (serbest meslek makbuzu) in return.
Consequences of Non-Compliance
Failure to comply with this obligation carries a tangible administrative penalty. The relevant provision states:
“Organizations acting in violation of this paragraph shall be subject to an administrative fine imposed by the Public Prosecutor for each month they fail to appoint a contracted lawyer, equivalent to two months’ gross minimum wage applicable to workers over the age of sixteen employed in the industrial sector at the date of the offense.”
With the 2025 gross minimum wage set at TRY 26,005.50, the monthly administrative fine amounts to TRY 52,011. Each month of non-compliance is penalized separately, meaning the cumulative liability can grow substantially over time. Enforcement authority rests with the Public Prosecutor, but bar associations also hold the right to file criminal complaints under Article 73/C of the same Regulation. Bar presidents are required to submit annual reports to the Union of Turkish Bar Associations (Türkiye Barolar Birliği) documenting compliance activities and the attorneys involved in such contracts.
When Does the Obligation Begin?
For companies that undergo a capital increase, the obligation arises at the moment the registered capital reaches TRY 1,250,000. The triggering date is the registration of the capital increase with the trade registry (ticaret sicili). From that point forward, the company is expected to enter into a legal services agreement within a reasonable time. Company directors should therefore initiate the attorney search and contracting process in parallel with the capital increase procedure, rather than treating it as an afterthought. Delaying this step creates immediate exposure to monthly fines from the date of registration.
The Practical Value Beyond Compliance
Beyond its status as a legal mandate, the requirement to retain a contracted lawyer brings concrete operational benefits to joint-stock companies. Having a dedicated legal advisor available for day-to-day business matters — contract drafting, regulatory compliance, dispute prevention — reduces the risk of costly legal errors. In areas such as tax law, employment law, and commercial transactions, timely legal guidance allows companies to act in accordance with current regulations and avoid retrospective liabilities. Litigation and enforcement proceedings are handled more efficiently, and proactive legal risk assessment becomes a built-in feature of business operations rather than a reactive measure taken after damage has occurred.
For foreign-owned or internationally oriented joint-stock companies operating in Turkey, this requirement is especially significant. Navigating Turkish legal procedures without professional support can result in procedural errors, missed deadlines, and financial exposure that could otherwise be entirely avoided.
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