DEVLET MEMURU ŞİRKET KURABİLİR Mİ? ŞİRKET ORTAĞI OLABİLİR Mİ?

CAN A CIVIL SERVANT ESTABLISH A COMPANY? CAN HE BE A COMPANY PARTNER?

What is the Civil Servants Law No. 657?

Article 28 of the Civil Servants Law No. 657 limits the right of public officials to engage in commercial activities. This article clearly states that civil servants are prohibited from establishing companies and engaging in other gainful activities. The relevant article discusses in detail which activities civil servants cannot engage in. The text of the article is as follows:

"Civil servants cannot engage in any activity that requires them to be considered as (Merchants) or (Craftsmen) according to the Turkish Commercial Code. They cannot work in commercial and industrial institutions, they cannot be commercial representatives or commercial attorneys, they cannot be partners in collective companies or limited partners in limited companies. (Except for the duties they will undertake to represent their institutions in the subsidiaries of the institutions they work for)"

This provision requires civil servants to stay away from any activity related to trade. This ban was imposed considering that civil servants' involvement in commercial activities could undermine the principle of impartiality in public services and negatively affect the effectiveness of the service.

Can a Civil Servant Establish a Private Company?

Civil Servants Law No. 657 comprehensively limits the ability of public employees to engage in commercial and gainful activities. Under this law, civil servants are strictly prohibited from taking an active role in the bodies of commercial companies - for example, in bodies such as the board of directors, disciplinary board - or holding company directorships and similar positions. The scope of this prohibition is so broad that a civil servant does not even have the right to establish a private company, including the right to be the founder of such a company.

Can a Civil Servant Establish a Joint Stock or Limited Company?

There are certain restrictions on civil servants, including the prohibition of establishing a sole proprietorship. However, the situation is slightly different in joint stock companies. In joint stock companies, the responsibilities of partners are limited to the capital shares they have committed. This means that partners will not be personally liable for company debts. Therefore, there is no ban on civil servants establishing joint stock companies. A similar situation exists in limited companies; partners are liable for debts only limited to their assets. This makes it possible for civil servants to establish limited companies. The law states that civil servants can take part in the establishment of joint stock and limited companies, and information on the establishment stages of such companies can be obtained here. However, the exception to this situation is when civil servants take part in the company management. Civil servants are prohibited by law from being in the management of such companies and performing management activities.

Can a Civil Servant Become a Partner in a Joint Stock or Limited Company?

There is no specific provision as to whether civil servants can be partners in joint stock and limited companies. This situation creates uncertainty about whether public employees have the opportunity to become partners in joint stock or limited companies. However, general evaluations on this subject show that civil servants can be partners in joint stock and limited companies. In other words, it does not constitute a legal obstacle for civil servants to become partners in joint stock and limited companies. This includes the right of officers to become shareholders in such companies. Civil servants can even become co-founders of the company together with another person who is not a civil servant. In this case, there is no legal obstacle regarding company shareholding. However, it has been stated that civil servants cannot serve as board members or managers in these companies. That is, civil servants cannot take an active role in the management of the companies in which they are shareholders.

Why Are Civil Servants Prohibited from Establishing a Company?

Public employees are prohibited from establishing sole proprietorships due to unlimited liability against potential negative consequences, in order to prevent them from suffering economic losses and to ensure that they work regularly and efficiently. That is, such an initiative carries risks that may negatively affect the financial security of public employees. This is part of the state's efforts to protect the financial stability and job performance of public employees.

In the case of joint stock and limited companies, a civil servant is not legally prevented from becoming a founding partner of such companies or from becoming a partner of an existing company later, as long as he does not take an active role in the management mechanism. This shows that public employees can access entrepreneurial opportunities under certain conditions.

If you are working in the private sector as an insured person and want to learn how the process of establishing a company works, "Can an Insured Employee Establish a Company?" You can read our article titled. This article provides an overview of the process of establishing a company, especially for insured employees, and indicates important points to consider in this process.

 Ifaturk is with you when establishing a joint stock and limited company!

Ifaturk provides significant savings in terms of both money and time, compared to personally undertaking the process of establishing and managing your company. It is a partner that will be with you throughout all processes, starting from the establishment of your company. This covers a wide range of topics, from preparing your business plan to officially registering your company to properly managing your tax processes. Ifaturk prevents you from wasting more time and energy by offering you an end-to-end solution in all these processes. This way, you can focus more on the success of your business and focus on the growth of your business.

Mesut SENEL | Ifasturk CEO

Independent Accountant Financial Advisor