Lawyer in Turkey: Corporate law: seizure of shareholder's private assets

Tuesday, October 1, 2019

Corporate law: seizure of shareholder's private assets

Doing business is usually taking risks. Of course, it is preferable to do business with companies that are financially powerful. But the main issue is; how do we know for sure that a company is financially strong enough, or that it will last through time?

In case you have a right of claim against a company that appears to be no longer solvent; there is a very minimal chance that the claim will be successful. You will understand, that a won court case does not guarantee the recovery and collection of your claim.

If you are doing business with a company (a Turkish Ltd. or A.Ş.), your contact person is the company as legal entity and not its shareholders personally. If the company is a "bare chicken", a simple debt collection procedure against the company will not yield.

Nevertheless there are still possibilities to hold the shareholders of the company privately liable in addition to the company. This is possible if the company has right of claim against its shareholders. In that case the creditor certainly has a chance to recover his claim from the private assets of shareholders of the company.
Situations where the shareholder can be held personally liable are as follows;

  • Be in default with the capital full payment,
  • Loan from the company account,
  • Owe money to the company for obtained services or goods,
  • Claims in the benefit of the company that have been collected privately,
  • Personal debts advanced by the company.

You will understand that the accounting of the company is very determining as a burden of proof.

In short, if you have a claim against an insolvent company while the shareholders are driving in expensive cars, or a legal claim against a company that in the meanwhile has gone bankrupt, or otherwise let us advise you further about your legal options.

Or do you have a company in Turkey and you are not sure about proper accounting, let our experts advise you in order that you later on will not be private liable for unexpected collection procedures.

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