Powers and Liabilities of Managers in a Turkish Company: What Foreign Partners Need to Know

Most foreign investors who set up a company in Turkey in 2026 run into the same question once the incorporation process is complete: what exactly can the manager appointed to run the company do, and what can they not do? The relevant provisions of the Turkish Commercial Code (TTK) place both broad powers and serious personal liabilities on the office of manager, and this balance is not immediately obvious to many foreign partners.

Who Is the “Manager” Under Turkish Company Law?

In a limited liability company (limited sirket), the manager is the corporate body responsible for managing and representing the company; in a joint-stock company (anonim sirket), this role is performed by the board of directors. The TTK provides that the liability rules applicable to members of the board of directors of a joint-stock company also apply, by analogy, to the managers of a limited liability company (TTK Art. 644, referring to Art. 553 et seq.). In other words, a manager is not merely an employee handling day-to-day business, but an authorized corporate body that legally binds the company.

Consider a concrete example: a German investor who set up a limited liability company in Antalya to provide real estate consultancy services, and who could not be permanently present in Turkey, appointed a trusted Turkish partner as sole manager. Six months later, he discovered he had known nothing about a lease agreement signed on the company’s behalf, because the authority of a manager carries broad representative power unless it is expressly limited.

What Are the Manager’s Legal Powers?

Unless otherwise stated in the articles of association or a general assembly resolution, the manager has the authority to represent the company vis-a-vis third parties, manage bank accounts, sign contracts, and make day-to-day business decisions. This authority becomes official through registration with the trade registry and the signature circular.

A question we hear often: “Can I appoint an outside professional manager instead of one of my own partners?” The answer is yes. Under Turkish law, a manager is not required to be a shareholder; appointing a third-party manager (a non-shareholder manager) is entirely possible, though this requires a general assembly resolution and registration. In companies with more than one manager, the articles of association should clearly state whether signature authority is to be exercised individually or jointly; otherwise, the trade registry will apply the generally accepted interpretation, which can create uncertainty in practice.

The Manager’s Liabilities and Personal Risk

The broader the authority, the greater the liability. Under TTK Art. 626, managers owe the company a duty of care and loyalty; breaching this duty can give rise to personal financial liability toward the company, its shareholders, and, in certain circumstances, its creditors.

Consider a real-world scenario: a foreign partner appointed as manager of a software company in Izmir discovered, only upon leaving the role, that the company’s SGK contributions had gone unpaid for months. He faced the risk of personal enforcement proceedings for the payments that went unmade during his term, since it could be argued that he had failed to exercise the required care while in office. Such risks are not confined to tax and SGK matters; personal liability can also arise where a manager’s culpable conduct is established in connection with damage the company causes to third parties. For this reason, it is essential to understand the scope of this liability before taking on the role of manager.

The Manager’s Personal Liability for SGK Contribution Debts

The general risk described above becomes particularly concrete in the case of SGK contribution debts. A company manager is jointly and severally liable, with his or her personal assets, for SGK (Social Security Institution) contribution debts that relate to his or her term of office and that cannot be collected from the company. This liability is based on Article 88 of Law No. 5510 and the provisions of Law No. 6183 on the Collection Procedure for Public Receivables.

• Only his or her own term of office: A manager is liable only for SGK debts that accrued and went unpaid during his or her own term. As a rule, a manager cannot be held liable for debts relating to periods before taking office or after leaving it.
• Enforcement against personal assets: SGK receivables are classified as public receivables. Where the debt cannot be collected from the company, enforcement may be sought against the manager’s personal assets, such as his or her home, vehicle, and bank accounts.
• Scope: This liability covers all SGK debts in monetary terms, including principal contributions, administrative fines, and late-payment surcharges.

Liability for Debts Owed to Third Parties

The key distinction in a manager’s liability toward third parties lies in the source of the debt and in whether or not the manager was at fault.

• The rule (the principle of separate legal personality): Company debts belong to the company’s own legal personality. In limited liability and joint-stock companies alike, the manager is not personally liable for ordinary commercial debts owed to the market, suppliers, or banks; creditors must pursue the company directly.
• The exception (fault and breach): Under Article 553 of the Turkish Commercial Code, where a manager culpably breaches obligations arising from law or from the articles of association and thereby causes damage to third parties or to the company, he or she may be held personally liable for that damage. Examples include conducting off-the-books transactions, keeping company books improperly, or deliberately dissipating company assets.

Legal Grounds and Limits of Liability

A manager’s personal liability is not arbitrary; it is tied to specific statutory provisions and to the manager’s fault. Understanding this framework allows a foreign partner to correctly assess both the risk and the limits of that liability.

• Parallel liability for public receivables: The same principle that applies to SGK contributions also applies to tax debts. Under Article 10 of the Tax Procedure Law and repeated Article 35 of Law No. 6183, a legal representative may be held personally liable, with his or her own assets, for tax and other public receivables that cannot be collected from the company.
• Joint and several liability, differentiated: While Article 553 of the Turkish Commercial Code establishes the joint and several liability of managers, Article 557 introduces the principle of “differentiated joint liability,” meaning each manager is liable only to the extent of the damage attributable to his or her own fault. Having more than one manager does not mean that all of them bear equal liability.
• The fault principle and the possibility of exculpation: Liability under the TTK is fault-based. A manager can escape liability by showing that no fault attributable to him or her contributed to the damage and that he or she exercised the required care in office. Liability for public receivables is stricter, and it becomes important for the representative to prove that he or she duly performed his or her duties.
• Discharge (ibra) and limitation periods: A general assembly resolution discharging the manager limits the right of the company, and of the shareholders who voted in favor, to bring a claim (TTK Art. 558); however, the rights of company creditors are not affected by this discharge. A liability claim must be filed within two years of learning of the damage and the party responsible, and in any event within five years of the act that caused the damage (TTK Art. 560).

The liability of limited liability company managers is governed by the provisions applicable to the board members of a joint-stock company, by reference under TTK Art. 644; the principles above therefore apply, to a large extent, to both company types. For this reason, reviewing the company’s financial position, its past public debts, and the limits on authority set out in the articles of association before taking on the role of manager significantly reduces the potential for personal risk.

What Should You Watch Out for as a Foreign Partner?

For foreign partners who are not permanently resident in Turkey, the most critical issue is clearly defining to whom you grant managerial authority, and how broad that authority is. If the limits of that authority are not set out in the articles of association, the manager you appoint may bind the company to transactions without your knowledge.

For example, a UK national who set up an e-commerce company in Istanbul, not wanting major decisions to be made on the company’s behalf while he was abroad, had the articles of association include a requirement for shareholder approval on expenditures above a specified amount. Tailored provisions of this kind go a long way toward preventing disputes down the line.

How Are a Change of Manager and a Limitation of Authority Carried Out?

A change of manager or a limitation of authority becomes official through a general assembly resolution followed by registration with the trade registry; changes made before registration cannot be asserted against third parties. For this reason, an internal company resolution alone is not sufficient.

When a dispute arose between the partners of a manufacturing company in Mersin, a foreign partner sought to revoke the former manager’s authority but, before the registration process was completed, was unable to challenge the validity of certain transactions the former manager had entered into with third parties. A former manager’s authority legally remains in effect until registration is completed, a detail that is often overlooked but matters a great deal in practice.

Most foreign investors who complete the company incorporation process in Turkey have the most questions, after incorporation, about the management structure. Drafting the articles of association clearly and in a way suited to your needs on this point is a decisive step for your company’s long-term security.

In short, serving as manager entails both broad representative authority and serious personal liability. As a foreign partner, clearly defining in the articles of association to whom you grant authority, and how much, protects both your company and yourself from potential risk.