The obligation of a joint stock company (anonim şirket) to retain a contracted lawyer is a statutory duty arising from article 35 of Attorneys’ Act no. 1136 (1136 sayılı Avukatlık Kanunu) and covering joint stock companies whose capital exceeds a particular threshold. Companies that fail to comply with this duty face an administrative fine (idari para cezası) that is repeated every month. In this article we examine which joint stock companies are required to retain a contracted lawyer (sözleşmeli avukat), how the fine is calculated as of 2026 and how companies can satisfy the obligation.
Key Takeaways
- Joint stock companies that are subject to the fixed capital system (esas sermaye sistemi) and whose nominal capital exceeds the threshold set by law are required to retain a contracted lawyer (Avukatlık Kanunu m.35).
- Where the obligation is not complied with, an administrative fine of twice the gross minimum wage is imposed for each month of non-compliance.
- Since the 2026 gross minimum wage has been set at 33.030 TL, the monthly fine is calculated on that basis.
- Certain companies subject to Sermaye Piyasası Kanunu (the Capital Markets Act) that have moved to the authorised capital system (kayıtlı sermaye sistemi) may be left outside this obligation; each company’s position must be assessed separately.
- For the mandatory lawyer’s fee, the minimum amount set each year by the Union of Turkish Bar Associations (Türkiye Barolar Birliği, TBB) in the Minimum Attorney Fee Tariff (Avukatlık Asgari Ücret Tarifesi, AAÜT) is taken as the basis.
Where Does the Obligation to Retain a Lawyer in a Joint Stock Company Come From?
Under Avukatlık Kanunu m.35/3, joint stock companies whose nominal capital exceeds the amount laid down in the law are required to retain a contracted lawyer to conduct their legal affairs; the purpose of this rule is to ensure that the legal processes of capital companies of a significant size are conducted under the supervision of a specialist lawyer (Avukatlık Kanunu, mevzuat.gov.tr; relevant legal bulletins, 2026). The provision is designed to support the character of the legal profession as a public service and as a constituent element of the judiciary, and to prevent large-scale commercial structures from taking decisions without legal scrutiny.
In practice, many company directors learn of this obligation not when the company is incorporated but only during an inspection or a dispute; this is a significant factor that increases the risk of retrospective fines. For that reason, it is advisable that the amount of nominal capital be assessed against this threshold together with a certified public accountant (mali müşavir) and a lawyer during the incorporation process.
Which Companies Does the Obligation Cover?
This obligation covers only joint stock companies subject to the fixed capital system; publicly held companies that are subject to Sermaye Piyasası Kanunu and have moved to the authorised capital system may be governed by a different regime, so a company’s own position needs to be examined separately on this point. No such obligation is laid down for limited liability companies (limited şirket) in Avukatlık Kanunu m.35. In limited liability companies, the ownership structure and the procedures for withdrawing from the company are subject to different rules; we addressed that topic in our article on withdrawal from a limited liability company.
How Much Is the Administrative Fine Applied in 2026?
Joint stock companies that fail to comply with the obligation are subject to an administrative fine of twice the gross minimum wage for each month of non-compliance; since the 2026 gross minimum wage has been set at 33.030 TL (csgb.gov.tr, 2026), the monthly fine calculated on that basis is in the region of 66.060 TL. The precise amount of the fine is determined by the relevant Chief Public Prosecutor’s Office (Cumhuriyet Başsavcılığı) in accordance with the legislation in force.
| Item | 2026 information |
|---|---|
| 2026 gross minimum wage | 33.030 TL (csgb.gov.tr) |
| Formula for the monthly administrative fine | Twice the gross minimum wage |
| Authority imposing the fine | Chief Public Prosecutor’s Office |
| How the fine is repeated | Imposed separately for each month |
Is the Fine Repeated?
Yes; this sanction is not a one-off. For as long as the company fails to fulfil its obligation to retain a lawyer, an administrative fine continues to be imposed separately for each month. For that reason, entering into a contract with a lawyer as soon as the obligation comes to light reduces the risk of accumulated fines.
The Purpose of the Rule and the Other Bodies Within Its Scope
Avukatlık Kanunu m.35 subjects not only large-scale joint stock companies but also associations, foundations, trade unions and professional organisations with public institution status that exceed a certain number of members or employees to a similar obligation to retain a lawyer; the legislature’s aim is to guarantee that decisions capable of producing significant legal and financial consequences are subjected to legal scrutiny. This provision has undergone various amendments since Attorneys’ Act no. 1136 was first adopted, and the capital threshold has been updated from time to time in line with inflation and economic conditions.
Why Are Joint Stock Companies Regulated Separately?
Because joint stock companies are structures carrying significant responsibilities towards the capital market and towards third parties under Türk Ticaret Kanunu (the Turkish Commercial Code), the legislature has made it compulsory for such companies to obtain professional legal advice once they exceed a certain size. The aim is to ensure that the lawfulness of transactions such as general assembly resolutions, capital increases, mergers and acquisitions is scrutinised from the outset.
What Form and Content Should the Contract Have?
The contracted lawyer relationship must be established by a written contract that clearly sets out the rights and obligations of the parties; the contract should state the matters on which the lawyer will provide services, the manner of payment of the fee, the term of the contract and the provisions on termination. The absence of a written contract, or a contract that does not reflect a genuine service relationship, may be interpreted during an inspection as a failure to fulfil the obligation.
Notification of the Contract to the Bar Association
Notifying the relevant bar association (baro) of the contracted lawyer relationship is important both for the lawyer’s compliance with professional rules and for the company’s ability to document its obligation; such notification makes it easier to prove, in any inspection, since when the obligation has been fulfilled.
What Are the Duties of the Contracted Lawyer?
The contracted lawyer is the person who reviews the compliance of the company’s general assembly and board of directors resolutions with the legislation, the legal risks in its contracts and the management of potential disputes; this duty does not mean that the lawyer must personally conduct all of the company’s litigation, and the company may, if it wishes, grant a separate power of attorney for the conduct of proceedings.
Should the Lawyer Be Full-Time or Contracted?
The law does not require the company to employ a lawyer on its payroll; the contracted lawyer relationship may be established within the framework of a service contract. What matters is that the lawyer is genuinely involved in the company’s legal affairs and that the relationship is documented by a written contract. Small and medium-sized joint stock companies generally prefer the model of an external contracted lawyer, whereas large companies with a high volume of legal work may combine an in-house legal counsel with external lawyers conducting litigation.
How Is the Mandatory Lawyer’s Fee Determined?
The Minimum Attorney Fee Tariff (AAÜT), published annually by the TBB, also sets the minimum monthly fee for lawyers who must be retained by joint stock companies; in the 2025-2026 tariff this amount was set at 45.000 TL and it remains in force in the 2026 calendar year as well (TBB AAÜT, 2025-2026 period). The parties may agree a fee above this amount, but they cannot agree on a fee below it. Who bears the opposing party’s attorney fee if an action to which the company is a party is lost is a separate matter; that point is addressed in our article on who pays the opposing party’s attorney fee.
What Does Non-Payment of the Fee Mean?
Paying the contracted lawyer a fee below the minimum set in the AAÜT, or a contract that remains on paper only with no service actually being received, may be assessed during an inspection as a failure genuinely to fulfil the obligation, and does not remove the risk of an administrative fine.
How Is the Inspection Carried Out and How Does the Fine Procedure Work?
Whether joint stock companies comply with the obligation to retain a lawyer may be inspected by the relevant bar associations and Chief Public Prosecutor’s Offices of their own motion or upon a report; where a breach of the obligation is established, the Chief Public Prosecutor’s Office serves the administrative fine decision on the company.
Is It Possible to Object to the Fine?
An objection may be made to the criminal judgeship of peace (sulh ceza hakimliği) against the administrative fine within the period laid down by law, running from the date of service; in the course of the objection, matters such as whether the company actually fulfilled the obligation and whether the date of the contract is accurate are examined. Submitting with the notice of objection any contract and payment records showing that the obligation was fulfilled, even if belatedly, plays an important role in the judgeship’s assessment.
Time-Barring of the Fine
Administrative fines, like other administrative sanctions, are subject to the limitation periods (zamanaşımı) laid down in Kabahatler Kanunu (the Misdemeanours Act); once that period has expired, no new fine can be imposed for breaches of earlier periods that are subsequently identified. This does not, however, remove the obligation for the current period.
Other Bodies Subject to the Obligation to Retain a Lawyer
In addition to joint stock companies, Avukatlık Kanunu m.35 subjects associations and foundations whose membership exceeds a particular threshold, employee and employer trade unions, and professional organisations with public institution status to a similar obligation; however, the threshold required and the procedure applied may differ for each type of body.
| Type of body | What triggers the obligation |
|---|---|
| Joint stock company | Nominal capital exceeding the statutory threshold |
| Association | Number of members exceeding the specified threshold |
| Trade union | Number of members and size of the organisation |
| Professional organisation with public institution status | Criteria laid down in the relevant special legislation |
Application of the Fine to Different Types of Body
Although the method of calculating the administrative fine is largely similar for each type of body (indexed to the gross minimum wage), the authority imposing the fine and the inspection procedure may vary according to the type of body; for that reason, when the obligation of an association or a trade union is being assessed, examples relating to joint stock companies should not be applied directly, and the legislation specific to the body in question must be examined separately.
Common Mistakes
One of the most frequent mistakes companies make in practice is failing to notice that the threshold has been exceeded following a capital increase, and therefore starting the process of retaining a lawyer late. Another mistake is establishing the contracted lawyer relationship orally only and never reducing it to writing; this can cause problems of proof during an inspection. Some companies may also think that they have formally satisfied the obligation by entering into a contract for an amount below the minimum fee set in the AAÜT, but this may breach both Avukatlık Kanunu and the mandatory character of the AAÜT.
Other Risks of Failing to Fulfil the Obligation
Beyond the administrative fine, a company that does not retain a contracted lawyer and conducts its legal processes without specialist supervision also exposes itself to indirect legal risks, such as contractual risks going unnoticed and general assembly resolutions being taken in breach of procedure; remedying those risks after the event may be far more costly than a preventive legal advisory relationship.
How Is the Contracted Lawyer Process Started in Newly Incorporated Companies?
For a joint stock company incorporated with nominal capital above the threshold, it is advisable to start the contracted lawyer process at the same time as incorporation; in this way the company does not face the risk of an administrative fine from its very first day of operation. The process generally proceeds as follows: first the company’s nominal capital and any planned increase are reviewed, then a suitable lawyer is approached and the scope of services is determined, a written contract is signed, and finally the contract is notified to the relevant bar association.
Points to Consider When Choosing a Lawyer
When choosing a contracted lawyer, companies should have regard not only to the amount of the fee but also to the lawyer’s command of company law, commercial law and the legislation specific to the relevant sector; this is because the contracted lawyer relationship may cover a wide field, from the company’s general assembly and board of directors processes to its commercial contracts. The protection of the company’s trade mark and other intellectual property rights may also be considered in this context; for example, opposition to a trade mark application is among the matters a contracted lawyer may handle.
Illustrative Case Study
The following example is entirely fictitious and is not based on any real client or file; it has been prepared purely by way of illustration in order to explain how the process works. One may imagine a scenario in which a joint stock company whose nominal capital is above the threshold laid down in the law is found, in an inspection carried out a year after its incorporation, not to have retained a contracted lawyer; on the basis of that finding the Chief Public Prosecutor’s Office imposes administrative fines for the past months, and the company, immediately after service of the fine, signs a contract with a lawyer and thereby fulfils its obligation. In such a case, although the company’s right to object to the fines for the earlier period is reserved, actually fulfilling the obligation prevents fines for the future.
How Does a Capital Increase Trigger the Obligation?
Even if a joint stock company was incorporated with capital below the threshold, if a subsequent capital increase takes its nominal capital above the limit laid down in the law, the obligation to retain a lawyer arises as from the date on which the increase is registered with the trade registry. For that reason, companies planning a capital increase are advised to assess in advance whether the post-increase amount exceeds the threshold and, if necessary, to start the contracted lawyer process at the same time as the increase.
Does a Capital Reduction Remove the Obligation?
Where a company subsequently reduces its nominal capital so as to bring it below the threshold, the obligation to retain a lawyer may come to an end as from the date on which the reduction is registered; however, the obligation continues for the period until the reduction is registered, and any fines relating to that period are reserved.
How Should Companies Manage This Process?
Newly incorporated joint stock companies, and those carrying out a capital increase, are advised to check the amount of their nominal capital at the time of incorporation or of the increase and to assess whether they fall within the scope of the obligation; this check is one of the preventive benefits of receiving regular legal advice in the field of company law.
The Benefits of a Corporate Advisory Relationship
The contracted lawyer relationship may be regarded not merely as a legal requirement but also as a corporate advisory mechanism that enables risks to be identified in advance in many areas, from the company’s general assembly processes to its commercial contracts. In companies that receive regular legal advice, the rate at which contractual disputes and disputes concerning administrative acts are resolved before reaching the litigation stage is generally higher. Since applying to a mediator before bringing an action is compulsory in commercial disputes concerning monetary claims, that process is addressed in detail in our article on mandatory mediation in commercial actions.
A Recommendation for an Annual Internal Audit
Reviewing the amount of nominal capital and whether the existing contracted lawyer relationship is up to date at the end of the financial year both prevents the risk of an administrative fine and enables the company to monitor its level of legal compliance on a regular basis. An internal audit of this kind is particularly important for companies going through a capital increase, a merger or a restructuring. As part of that internal audit, the compliance of the company’s personal data processing operations with the legislation, and the notification obligations to be followed in the event of a data breach, should also be reviewed; for details, you may refer to our article on KVKK data breach notification.
The Tax and Accounting Dimension
The fee paid to a contracted lawyer may be taken into account as an expense in determining the company’s commercial profit; however, that expense must be documented in accordance with tax legislation (by invoice or by a self-employment receipt, serbest meslek makbuzu). In addition, since the application of withholding tax (stopaj) and VAT (KDV) to attorney fees may vary according to the way the lawyer works (independent lawyer or law partnership), coordination with a certified public accountant is important on this point. 
What Will the Other Side Do?
In an inspection or objection process concerning the obligation to retain a lawyer, being prepared for the arguments that the authority imposing the fine, or the other side, will put forward shapes the course of the process.
The argument that the nominal capital exceeded the threshold and that the obligation arose as from the stated date. This is clarified by an examination of documents based on the registration date in the trade registry gazette; the company can prove the actual registration date of the capital increase from that record.
The argument that the contracted lawyer relationship was not actually operated and remained on paper only. This allegation is met with the written contract, the notification made to the bar association and regular payment receipts.
The argument that the fee paid fell below the minimum amount laid down in the AAÜT. In that case, a contract brought into line with the current AAÜT and the payment records are submitted.
The allegation that the starting date of the obligation was wrongly determined in the calculation of fines for earlier periods. This is assessed by comparison with the company’s financial records and the trade registry registration date.
Which argument comes to the fore varies according to the company’s particular circumstances; for that reason it is important that the contract and notification documents are kept in order before any objection process begins. To review in advance which argument your file is likely to meet, you may get in touch.
Frequently Asked Questions
Are limited liability companies also required to retain a lawyer?
No; the obligation in Avukatlık Kanunu m.35 covers only joint stock companies subject to the fixed capital system, and no such obligation is laid down for limited liability companies.
If the company’s own staff member holds the title of lawyer, is the obligation regarded as fulfilled?
It is possible for a lawyer who works within the company and is registered with a bar association to carry out this duty in practice; what matters is that the lawyer is registered with a bar association and that the duty is documented.
By when must a newly incorporated company retain a lawyer?
Companies incorporated with capital above the nominal capital threshold fall within the scope of this obligation upon incorporation; for companies that exceed the threshold by way of a capital increase, the date on which the increase is registered is taken as the basis.
Can the same lawyer provide services to more than one company?
Yes; a lawyer may establish a contracted lawyer relationship with more than one company. What matters is that a separate contract is drawn up for each company and that the service is actually provided.
Does the obligation come to an end automatically once the fine has been paid?
No; payment of the fine concludes the sanction relating to the earlier period, but if the company does not continue to retain a contracted lawyer, fines start to run again for the following months.
Must the company lawyer and the lawyer engaged to conduct litigation be the same person?
No; while the mandatory contracted lawyer carries out the general legal advisory function, the company may grant a separate power of attorney, to another lawyer or to the same lawyer, for whichever cases it wishes; these two relationships are legally independent of each other.
Sources
- Union of Turkish Bar Associations (Türkiye Barolar Birliği)
- Legislation Information System (mevzuat.gov.tr)
- Ministry of Trade (Ticaret Bakanlığı)
- Official Gazette (resmigazete.gov.tr)
Related Articles
- Withdrawal and Expulsion from a Limited Liability Company
- Who Pays the Opposing Party’s Attorney Fee? (2026 AAÜT Guide)
- Opposition to a Trade Mark Application and the Similarity Assessment
- Mandatory Mediation in Commercial Actions: Scope, Time Limits, Final Minutes
- KVKK Data Breach Notification: The 72-Hour Rule and Article 12
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- Reinstatement Action 2026: Conditions, Time Limits, Mediation
- In Which Cases Is Severance Pay Not Paid? (2026)
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This article is for general information purposes only and does not replace legal advice. Your specific situation requires a separate assessment of your file.
This article has been prepared on the basis of the legislation in force as of 17.09.2026. Updates to the capital threshold and to the amounts of the fines can be followed from the communiques published in the Official Gazette.
Av. Mehmet İlker Dinç
Insurance Law, Compensation Law, Employment Law, Company Law, Corporate Advisory
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