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COMMERCIAL LAW
51
Conversion of Commercial Enterprises into Commercial
Companies
The TCC defines a commercial enterprise as an enterprise that
exceeds the scope of an artisanal enterprise, aims to generate profit and
continuously and independently realizes its activities. Pursuant to TCC
Art. 11/3, the commercial enterprise is deemed to own the assets which
have been continuously allocated to its use (i.e. machinery constantly used
and allocated to the activities of a factory). A commercial enterprise is an
enterprise bearing the above qualifications and has no legal personality.
Pursuant to TCC Art. 194/2, a commercial enterprise may convert
to a commercial company. Thus, a commercial enterprise that has no
legal personality may convert to commercial company that has a legal
personality. The TCC regulates that provisions governing the conversion
of type by commercial companies (Articles 182 to 193) shall apply by
analogy to this transaction.
Accordingly, the provisions governing the establishment of the
company towhich the enterprise will convert will be applicable. Therefore,
the necessary documentation for the establishment of the relevant
company will be prepared and relevant transactions will be executed. The
provisions governing the preservation of rights, preparing a balance sheet,
a conversion of type plan and report will also apply by analogy. However,
as the commercial enterprise has neither a legal personality nor organs,
such as a general assembly, no decision for conversion will be adopted,
and the relevant provisions will not be applicable.
Similarly, the principle of continuity of the converted company under
the new type will also be applicable (TCC Art. 180). Thus, the commercial
company established by conversion will be considered a continuation of
the former commercial enterprise.
The Trade Registry Regulation specifies that in the event a
commercial enterprise is converted to a commercial company, an asset
valuation report on the former must be prepared by a sworn financial
auditor or independent accountant and financial auditor and submitted to
the Trade Registry. Furthermore, in the event the assets of the commercial
enterprise comprise certain rights or goods registered to the land registry,
the registry of ships, the intellectual property registry or to other registries,
a statement providing information on such rights and goods as well as on