Ordinary Partnership in Türkiye
"When can a project become an adi ortaklık, and who is liable?"
Quick Answer
An ordinary partnership (adi ortaklık) is a contract in which two or more persons combine contributions for a shared purpose under Articles 620–645 of the Turkish Code of Obligations. It has no separate legal personality. Its partners may be personally and jointly liable for obligations undertaken on behalf of the partnership, subject to the rules on representation and the particular transaction.
What Creates an Ordinary Partnership?
Article 620 of the Turkish Code of Obligations describes a partnership agreement: two or more persons undertake to combine their work or assets to achieve a common purpose. A project may therefore raise ordinary-partnership issues even where the parties call it a consortium, collaboration or joint venture. The legal substance of the arrangement and the parties' conduct matter more than its label.
An ordinary partnership is a contractual relationship rather than a company with its own legal personality. It should not be confused with a registered collective company, a limited liability company or a joint stock company. Formation of a company, sector licences, tax treatment and registration duties require a separate assessment.
Key Points to Remember
- Governing law: Articles 620–645 of the Turkish Code of Obligations provide the core rules.
- Separate entity: The partnership itself does not become a distinct legal person merely by signing an agreement.
- Liability: Partners need to understand when a transaction binds them and when joint personal liability arises.
- Structure: A company may be preferable where the project needs a separate legal entity or a different liability profile.
Who Signs Contracts and Who Owes the Debt?
Because there is no separate legal person, identify the contracting parties rather than using only a project name. Under Article 638, whether the other partners become creditors or debtors of a contract made by one partner depends on the rules of representation. Partners are jointly liable for obligations they undertake together or through a representative acting for the partnership, unless a different arrangement with the creditor is validly made. An internal liability cap between partners should not be assumed to bind a third-party creditor.
Check the proposed signatory's authority, the wording of each external contract, bank-account arrangements and the ownership of assets acquired for the venture. These points are especially important when a foreign business works with a local delivery partner.
Terms to Agree Before the Project Starts
- Purpose and contributions: Define the project, cash, work, equipment, intellectual property and deadlines each partner commits to provide.
- Management and authority: State who may place orders, hire staff, sign customer contracts and incur debt, including any approval thresholds.
- Economics: Allocate costs, profits, losses, tax administration and record-keeping responsibilities.
- Exit: Address duration, withdrawal, breach, death or insolvency of a partner, winding up and settlement of outstanding obligations.
- Disputes: Agree on information rights, governing language, governing law and a workable dispute-resolution process.
For a long-term investment with staff, regulated activity or substantial third-party exposure, compare the partnership with a Turkish company before committing. Our joint venture guide explains the company-based alternatives.
Official Legal Text
Turkish Code of Obligations No. 6098, Articles 620–645 (Turkish text, published by the Grand National Assembly).
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Disclaimer: This content is for informational purposes only and does not constitute legal advice. For advice on your specific situation, please contact us or review our full disclaimer.