Types of Commercial Cooperation Under Turkish Law

Commercial Cooperation Under Turkish Law

Commercial cooperation is a cornerstone of business relationships, providing companies with the flexibility to pursue joint ventures, partnerships, and strategic alliances. Under Turkish law, various legal structures are available to formalize these collaborations, each offering unique advantages and regulatory considerations. This article provides an overview of the primary types of commercial cooperation available to businesses operating in Turkey.

1. Joint Ventures

Joint ventures are a popular form of commercial cooperation where two or more parties come together to undertake a specific business project or commercial activity. Under Turkish law, joint ventures can be structured as:

• Contractual Joint Ventures (Consortiums) – Typically formed for a specific project with each party retaining separate legal identities. These are governed primarily by the Turkish Code of Obligations (No. 6098) and relevant commercial contracts.
• Corporate Joint Ventures – Established as a separate legal entity, such as a joint stock company (Anonim Şirket) or a limited liability company (Limited Şirket), under the Turkish Commercial Code (No. 6102). This structure offers the benefits of limited liability and corporate governance.

2. Partnerships

Partnerships are another common form of commercial cooperation. Under Turkish law, partnerships can take several forms, including:

• Ordinary Partnerships (Adi Ortaklık) – Formed through a simple partnership agreement, these are not separate legal entities but rather contractual relationships governed by the Turkish Code of Obligations.
• Collective Partnerships (Kollektif Şirket) – Similar to general partnerships in other jurisdictions, where partners have unlimited liability for the debts and obligations of the business.
• Commandite Partnerships (Komandit Şirket) – In this structure, at least one partner has unlimited liability (active partner), while others (silent partners) have limited liability up to their capital contribution.

3. Strategic Alliances and Consortia

Strategic alliances are less formal than joint ventures or partnerships and are typically formed for mutual benefit without creating a separate legal entity. These alliances may involve cooperation in research, marketing, distribution, or technology sharing.

Consortia are another form of cooperation, often used in large-scale infrastructure or construction projects where multiple companies collaborate to share risks and resources while retaining their individual identities.

4. Agency and Distribution Agreements

Businesses often choose agency or distribution agreements to expand their market reach without establishing a direct presence. These agreements are governed by the Turkish Commercial Code and typically define the rights, obligations, and compensation structures for agents and distributors.

• Agency Agreements (Temsilcilik Sözleşmeleri) – Agents act on behalf of the principal, usually with the authority to negotiate and conclude contracts.
• Distribution Agreements (Distribütörlük Sözleşmeleri) – Distributors purchase products from the principal and sell them independently, often with exclusive territorial rights.

5. Franchising

Franchising is a well-established form of commercial cooperation in Turkey, allowing businesses to expand rapidly using an established brand and business model. Franchising agreements are regulated under general commercial law and competition regulations.

6. Licensing Agreements

Licensing allows one party (the licensor) to grant another (the licensee) the right to use intellectual property, such as trademarks, patents, or copyrights, in exchange for royalties or fees. These agreements are particularly common in the technology, entertainment, and manufacturing sectors.

7. Memoranda of Understanding (MoU) and Letters of Intent (LoI)

MoUs and LoIs are preliminary agreements that outline the general terms of a future commercial relationship. While generally non-binding, these documents can create certain binding obligations if they include confidentiality or exclusivity clauses.

8. Mergers and Acquisitions (M&A)

M&A transactions are another common form of commercial cooperation, involving the purchase or consolidation of companies. These are governed by the Turkish Commercial Code, Capital Markets Law, and competition regulations.

Conclusion

Choosing the right form of commercial cooperation is crucial for businesses seeking to optimize their legal structure, manage risks, and maximize commercial opportunities in Turkey.

Understanding the legal implications and regulatory requirements of each structure is essential for successful collaboration.

This material is provided for informational purposes only. The provision of this material does not create an attorney-client relationship between the firm and the reader, and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this [blog, article, newsletter, etc.] are not a substitute for legal counsel. Do not take action in reliance on the contents of this material without seeking the advice of counsel.