Decision Quiz
LLC or JSC? — Decision Quiz
The choice between a Limited Şirket and an Anonim Şirket is usually framed around capital and prestige; the real difference shows up not when you incorporate but when you take on a shareholder and when you sell. This quiz settles the structure in five questions and sets the two side by side across twelve criteria.
Five questions, two minutes. Both give you limited liability, a single-shareholder option and 100% foreign ownership — where they diverge is what these questions ask about. There is no point-scoring: one clear “yes” usually settles it on its own.
Side-by-side across twelve criteria
| Criterion | Limited Şirket (LLC) | Anonim Şirket (JSC) | Edge |
|---|---|---|---|
| Minimum capital (2026) | TRY 50,000 | TRY 250,000 | LLC |
| Upfront capital deposit | None — 24 months to pay | 25% blocked before registration | LLC |
| Setup cost & simplicity | Lower cost, lighter governance | Higher cost, formal board | LLC |
| Management organ | Manager(s); at least one shareholder must manage | Board of directors | Same |
| Liability for public debt (tax, social security) | Shareholders personally and secondarily liable, pro rata | Shareholders not liable; exposure sits with the board | JSC |
| Share transfer | Notarial deed + general assembly approval + registry filing | Delivery of share certificate; no notary needed | JSC |
| Capital gains on exit (shares held >2 years) | No exemption; the gain is taxable | Exemption available if issued as share certificates | JSC |
| Raising outside investment | Harder; each entry is a formal transfer | Built for a moving cap table | JSC |
| Share classes / privileged shares | Limited flexibility | Flexible (registered, privileged, etc.) | JSC |
| Public offering & bond issuance | Not permitted | Permitted | JSC |
| Ministry representative at general assembly | Not required | Required for certain meetings | LLC |
| Corporate tax treatment | 25% + domestic minimum tax | 25% + domestic minimum tax | Same |
This quiz applies general decision rules for information only and is not a substitute for professional advice. The result is a pointer — the final structure decision should be made by weighing your activity and shareholding plans together.
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The three axes that decide it
This question is usually argued over capital and prestige. Neither decides it. Three things actually do.
Liability for public debt. In an LLC a shareholder can be held directly liable for unpaid public debt in proportion to their shareholding. In a JSC that liability attaches to board members rather than shareholders, so a shareholder who stays off the board can sit outside the risk.
Share transfer. In an LLC a transfer needs a notary and a shareholders’ resolution; the process is heavy. In a JSC it is far more flexible. If you intend to run an employee share plan or take investment, this alone can decide it.
Tax on exit. In a JSC where share certificates have been issued and held for a period, a sale can produce a different capital gains outcome. An LLC has no such mechanism. If there is any chance of selling the company later, this is the most expensive decision made at formation.
Why capital and prestige do not decide it
The difference in minimum capital is small against what a company spends over its life, and it is one-off. Choosing on that basis means picking a structure you will live with for years on the strength of a single payment.
Prestige is not measurable. In practice customers, banks and investors look at the financial statements and the quality of the records, not the entity type. Being a JSC does not fix a disorderly set of books.
Converting later is possible, but the timing is bad
An LLC can be converted into a JSC. But it takes time, money and a shareholders’ process.
The problem is that the need usually arises at the worst moment: when a round opens, when an acquisition conversation starts, or when equity has been promised to an employee. Dealing with a conversion in those weeks delays the process itself and weakens your position.
So where investment or share participation looks likely, choosing a JSC at formation is usually cheaper.
Frequently asked
- LLC or JSC: which is better?
- Neither is better in general; the answer follows the company’s plan. If investment, share transfers or a future sale are likely, a JSC; for a closely held structure with no expected transfers, an LLC is usually enough. The difference in liability for public debt also enters the picture.
- What is the difference in liability for public debt?
- In an LLC a shareholder can be held directly liable for unpaid public debt in proportion to their holding. In a JSC that liability attaches to the legal representative, meaning a board member, rather than the shareholder. A JSC shareholder who is not on the board is better protected in this respect.
- Which structure supports an employee share plan?
- In practice, a JSC. In an LLC every transfer needs a notary, which makes running a plan very heavy. It is one of the main reasons most companies planning to raise convert to a JSC.
- Can an LLC be converted to a JSC later?
- It can. But the process takes time and money, and the need usually arises at the tightest moments, such as a funding round or a sale discussion. If that possibility is visible at the outset, choosing a JSC from the start is cheaper.