Inheritance of Shares in a Turkish Limited Liability Company

Inheritance of shares in a Turkish limited liability company (limited şirket) works differently from a normal sale: when a shareholder dies, the shares pass to the heirs automatically at the moment of death, but the company keeps a narrow right to buy them out within three months instead of admitting the heir as a partner. This guide explains how those shares pass under the Turkish Commercial Code, what "real value" means, what foreign heirs must do to claim, and how inheritance tax fits in.

How shares pass to heirs on death

In Turkish law a limited liability company (LLC), known locally as a limited şirket, is governed by the Turkish Commercial Code (TTK, Law No. 6102). Its capital is divided into shares (esas sermaye payları) held by partners. Each share is a property right, so it forms part of a deceased partner's estate, just like a house, a bank account, or a car.

Under the Turkish Civil Code (TMK, Law No. 4721, Art. 575 and Art. 599), heirs acquire the entire estate of the deceased automatically at the moment of death, as a single whole. This is the principle of universal succession. The LLC shares therefore transfer to the heirs by operation of law, with no contract and no consent from the other partners needed for the transfer itself.

Article 596 of the TTK confirms this. Shares that pass through inheritance, division of an estate, matrimonial property rules, or enforcement proceedings move to the acquirer together with all rights and obligations, without the general assembly's approval being required for the transfer to take effect. The heir becomes the legal owner of the share immediately. If you want background on how this entity type is built, see our guide on how a Turkish limited liability company is structured.

Owning the share vs. being a recognised partner

Owning the share economically and being recognised as a participating partner (with voting and management rights) are two separate questions. The heir automatically owns the share, but the company gets a short window to decide whether it actually wants that heir to join as a partner.

Under Article 596 of the TTK, the company may refuse to recognise the heir, or the person who acquired the share through estate division, matrimonial property rules, or enforcement, only if it offers, within three months of learning of the acquisition, to take over the share at its real value (gerçek değer) for itself, for the other partners, or for a third party.

• If the company makes a timely offer at real value, the heir's partnership status can be declined, but the heir is paid the real value of the share in cash.
• If the company does not reject in time, the law treats it as having given approval, and the heir is fully recognised as a partner.

One nuance matters for foreign heirs. Under TTK Art. 596/4 the company's refusal must be express and in writing within the three months. An oral grumble, a phone call, or an informal email saying the partners are unhappy does not count. Silence, or anything short of a clear written buy-out offer, means the heir stays.

What happens during the three-month limbo

Between death and the close of the three-month window, the heir's economic ownership of the share is already secure, but their full partner status is, on the leading view, treated as pending (the Turkish doctrine calls it askıda). In practice this means an heir should be cautious about assuming they can vote or run the company until status is settled, while still being entitled to the financial value of the share. If the company never makes a written offer, partnership crystallises once the window closes. Because the doctrine here is debated, the safe course is to document everything and get advice before exercising governance rights.

What "real value" means and how it is set

The central battleground in these matters is the real value of the share. If the company exercises its buy-out right, the heir is entitled to a fair, current valuation, not merely the nominal capital figure recorded in the articles of association. A share with a nominal value of, say, 10,000 TL can have a real value many times higher once the company's assets, contracts, and earning power are counted.

What expert valuers (bilirkişi) assess

Where the parties cannot agree on the figure, the value is set by the court. Under TTK Art. 597, the dispute is decided by the commercial court of first instance (asliye ticaret mahkemesi) at the company's registered seat, and that court's decision on value is final. In practice the court appoints expert valuers (bilirkişi), who typically weigh:

• Net asset value — what the company owns minus what it owes, including real estate and equipment;
• Goodwill — brand, client base, and ongoing contracts not shown in the capital figure;
• Profitability — recent earnings and realistic future cash flow;
• Market comparables — what similar businesses change hands for;
• Valuation date — the value is fixed as of the relevant date, not whenever the dispute happens to be heard.

Because the gap between nominal and real value is so often where the money is, an heir should usually obtain an independent valuation before accepting any figure the company puts forward. Our team can help structure these share transfers and buy-outs and test the company's number.

When several heirs inherit one share

A single LLC share is, in principle, indivisible toward the company. Where several heirs inherit together, they hold it in joint ownership (elbirliği mülkiyeti, TMK Art. 640) and, under TTK Art. 599, should appoint a common representative to exercise the rights attached to the share toward the company. Until a representative is named, the company may decline to deal with the co-heirs collectively. Turkish case law does, however, allow co-heirs to exercise or protect certain rights individually in some situations, so the position is not a complete freeze. Either way, prompt coordination among co-heirs avoids deadlock and protects the value of the share.

Registration: share ledger and trade registry

Although the heir becomes owner automatically, the change must still be documented so it is effective and visible toward the company and third parties.

• Certificate of inheritance (veraset ilamı / mirasçılık belgesi): heirs first obtain this document, which proves who the legal heirs are and their respective shares (TMK Art. 598). A Turkish notary may issue it in straightforward cases, but where the deceased or the heirs are foreign, the notary route is usually unavailable and the certificate must be obtained from the civil court of peace (sulh hukuk mahkemesi).
• Share ledger (pay defteri): the company records the heir as the new holder of the share once status is settled.
• Trade registry (ticaret sicili): for an LLC, partners and their holdings appear in the trade registry, so the change of partner is registered and announced. A general assembly resolution is usually prepared to reflect the new shareholding structure.

Getting these steps right matters: an heir who is the rightful owner but is not properly recorded can struggle to vote, collect dividends, or sell the share later. If a wider restructuring is needed, our setting up or restructuring a Turkish company team can handle the registry work.

LLC vs. JSC: how inheritance differs

The three-month buy-out veto is specific to the limited liability company. In a joint-stock company (anonim şirket, JSC), inherited shares generally pass freely to the heirs, who become shareholders without any equivalent right for the company to refuse them and buy them out. This contrast often decides which structure a family business should use.

This is a general comparison; the articles of association of either company can change the default picture, so always check the specific company's rules.

What the articles of association can change

The company's articles of association (esas sözleşme) are the first document any heir or adviser should read. Within the limits of the TTK, they can shift the default rules in several ways:

• Pre-consent to succession — the articles can make clear that heirs are accepted as partners, removing uncertainty.
• Tighter restrictions — alternatively, they can reinforce the company's right to keep the share inside the existing partner group.
• Buy-out price formulas — some articles set a method for calculating the price, which interacts with the statutory "real value" rule.
• Drag-along or pre-emption clauses — these can affect what an heir can ultimately do with the share.

Special considerations for foreign heirs

Foreign heirs of a Turkish LLC partner face an extra procedural layer, but the substantive right to inherit is the same as for a Turkish heir.

Which country's law applies?

Under the Turkish Act on Private International Law and Procedure (MÖHUK, Law No. 5718, Art. 20), inheritance is generally governed by the national law of the deceased. Immovable property located in Turkey is subject to Turkish law, and the opening, acquisition, and distribution of estate assets in Turkey follow Turkish procedure. Company shares are movable assets, so the deceased's national law usually governs who the heirs are, while Turkish procedure governs how the share is claimed here. For a fuller treatment, see our guide on which country's inheritance law applies.

Recognising foreign documents

Foreign wills, probate decisions, and inheritance certificates generally need to be recognised or processed in Turkey to take effect here. Documents typically require an apostille (for Hague Convention countries) or consular legalisation, plus a sworn Turkish translation. In many cases foreign heirs also obtain a Turkish certificate of inheritance so they can deal cleanly with the company and the trade registry.

You usually do not need to travel

Most of this can be handled by a Turkish lawyer acting under a power of attorney, so heirs who never set foot in Turkey can still claim, register, and, if needed, litigate over the share. You can grant power of attorney from abroad at a Turkish consulate or before a local notary with apostille, and our inheritance and succession team handles the steps end to end.

Inheritance tax on Turkish company shares

Inheriting an LLC share is not only a corporate-law event; it is a tax event too. Inheritance and transfer tax in Turkey is governed by the Inheritance and Transfer Tax Law (Veraset ve İntikal Vergisi Kanunu, Law No. 7338). Heirs, including foreign heirs, are generally required to declare inherited assets, and inherited shares are valued for tax purposes, broadly in line with their worth rather than just the nominal figure.

The tax operates on a progressive scale with periodically updated brackets, exemption thresholds, and filing deadlines, and the tax can usually be paid in instalments. Because these rates, thresholds, and deadlines change and depend on the heir's circumstances and any double-tax or treaty position, you should confirm the current figures with a Turkish tax adviser before relying on them.

Common disputes and how they arise

Inheritance of LLC shares often triggers conflict because value, control, and family relationships collide. Typical disputes include:

• Valuation fights when the company buys out the heir, especially where it holds valuable property or contracts not reflected in nominal capital.
• The three-month deadline — whether the company's written buy-out offer was made in time, and from what date the period began to run.
• Co-heir deadlock, where joint heirs cannot agree on a common representative or on whether to keep or sell the share.
• Assets stripped before or after death, including share transfers or sales designed to reduce what reaches the heirs. Recovering these may require separate litigation; see our guide on recovering assets sold to evade heirs.

One related scenario sits inside the same provision. Article 596 lists not only inheritance but also acquisition through enforcement. If a partner's share is seized and sold to satisfy a debt under the Enforcement and Bankruptcy Code (İİK, Law No. 2004), the buyer takes it on similar terms, and the company has the same kind of buy-out option. Creditors and buyers in that position should review our enforcement (İİK) proceedings service. Because the outcome turns on company records, timing, and valuation evidence, early legal review is usually decisive. Every matter should be checked by a qualified Turkish lawyer against the specific company's articles of association and facts.

Practical steps for heirs of an LLC partner

1. Obtain a certificate of inheritance establishing the heirs and their shares.
2. Read the company's articles of association for any clauses affecting succession.
3. Notify the company and request entry in the share ledger and the trade registry.
4. Watch the three-month window for any express, written company buy-out offer at real value.
5. If the company offers to buy out, get an independent valuation before accepting any figure.
6. Co-heirs should appoint a common representative to act toward the company.
7. Foreign heirs should arrange apostille or legalisation and sworn translation early, and consider a power of attorney so a Turkish lawyer can act without you travelling.
8. Diarise the inheritance tax declaration deadline alongside the corporate steps.

To start the process or have your situation assessed, contact Lexin Legal and our succession lawyers will guide you through each step.

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