Dissolve your business through the proper regulatory channels to formally close and remain
compliant. (Aware: This fee does not include Chamber of Commerce expenses.)
We’re sorry you’re considering closing your company. As ETITAX, we will be with you in this process.
ETITAX flawlessly manages the process of your company’s closure. This process can take up to 6-8 weeks after the initial request entry. Your tax payments will continue during this period. You can track when your tax payments will end on the ETITAX customer portal.
Liquidation
According to the definition of the Turkish Language Institution, liquidation means “purification, refinement, cleaning”. Indeed, this is what liquidation means in commercial terms. The company entering the liquidation process eliminates itself by cleaning its assets and debts.
In technical terms, liquidation is the process of closing down a company. In this process, creditors are distributed their receivables, company assets are disposed of and the company enters into dissolution in such a way that the financial value of the company is lost. All values in the financial statement are converted into cash. The English word for liquidation, “liquidation”, comes from this liquidation process.
Purpose of Entering into Liquidation
Liquidation indicates the intention of the company to disappear completely. In other words, it refers to the termination of its commercial activities. The sole purpose of the company after entering the liquidation process is to ensure that it is completely converted into cash assets. After this process is completed, its commercial activities will end. Article 291 of the Turkish Commercial Code, which explains the purpose of liquidation, also expresses this view.
“The liquidators are authorized and obliged to complete the works and transactions that have been started during the period when the company was in operation but have not yet been finalized, to fulfill the debts and commitments of the company, to collect the company’s receivables, to take them by judicial action when necessary, to convert the assets into money, and to carry out all works and transactions aimed at and useful for obtaining net assets.”
Conclusion
The liquidation process is the declaration of the company’s (the company’s shareholders’) intention to withdraw from commercial life. Liquidation is not announced today and the company self destructs tomorrow. Therefore, it may cover a certain period of time. However, this period should be utilized by the company (and the liquidator will manage the liquidation process) in accordance with its purpose.
All of the transactions established during the liquidation process should be based on the conversion of company assets into cash and the fulfillment of company obligations. In this process, the sale and export of the remaining stocks of the company, and the VAT refund receivable due to export can be considered as acceptable commercial transactions. This is because the company has no more natural right than selling its stocks in accordance with the law in the liquidation process.
On the other hand, it is diametrically opposed to the spirit of the liquidation process to make new
purchases by taking advantage of the opportunities in the market or to enter into obligations that may put the company under debt burden in the long term. A company that has been awarded a tender for a new project is not in liquidation; it is continuing its commercial life under normal conditions. In light of the above explanations, it is natural for a company in liquidation to continue its commercial activities “provided that its limits are in accordance with the purpose of liquidation”. However, it should be kept in mind that liquidation is not a normal process of commercial life, and commercial transactions should be selected and implemented to ensure that the process ends as soon as possible.
