What happens when two 50/50 shareholders cannot agree in a Turkish company? Learn about deadlock clauses, buyouts, share valuation, court-ordered exit, dissolution, director liability and urgent remedies in Turkey.

A 50/50 shareholder deadlock in a Turkish company can become one of the most serious forms of corporate dispute, because neither partner has sufficient voting power to overcome the other on matters requiring shareholder approval. The company may still own valuable assets and operate a profitable business, yet disagreements over management, banking authority, budgets, dividends, investments, director appointments or related-party transactions can make effective decision-making impossible. For a foreign shareholder, the situation can be particularly difficult where the other 50% shareholder manages the Turkish operations, controls accounting information or refuses to negotiate a commercially reasonable buyout. Turkish law does not provide one automatic rule stating that every 50/50 disagreement results in dissolution or that one shareholder must purchase the other’s shares. The available remedy depends principally on whether the business is structured as a limited liability company (Ltd. Şti.) or joint stock company (A.Ş.), the articles of association, any shareholders’ agreement, the nature and duration of the deadlock and whether circumstances amounting to just cause (haklı sebep) exist. Depending on those factors, the solution may involve a negotiated buyout, contractual deadlock procedure, share transfer, judicial withdrawal in a limited company, dissolution for just cause, an alternative court-ordered exit, challenges to corporate resolutions, management-liability proceedings or urgent interim measures designed to protect company assets.

What Is a 50/50 Shareholder Deadlock?

A deadlock exists when shareholders with equal or effectively blocking voting positions cannot reach the decisions necessary for the company to function properly.

Not every disagreement is a legal deadlock.

Two shareholders may disagree about whether to open a new office, hire additional employees or purchase machinery while the company continues functioning normally. That is an ordinary commercial disagreement.

A serious deadlock emerges when the conflict becomes persistent and begins preventing effective corporate governance.

Typical 50/50 Deadlock Scenario

Consider a Turkish company owned by two shareholders:

Foreign Investor: 50%

Turkish Business Partner: 50%

The partners initially manage the business together.

Their relationship subsequently deteriorates.

One shareholder wants to distribute profits.

The other wants to retain them.

One wants to replace the general manager.

The other refuses.

One wants to approve a new budget.

The other blocks it.

Neither side agrees on banking authority.

General assembly meetings repeatedly fail to produce workable decisions.

The shareholders then begin negotiating an exit but disagree about which party should leave and what the shares are worth.

At this point, the dispute may no longer be an ordinary difference of business opinion.

Why 50/50 Companies Are Particularly Vulnerable

Equal ownership can work extremely well while shareholders trust each other.

Once that relationship collapses, equal ownership can become structurally problematic.

Neither shareholder may have a casting vote.

Neither may be able to replace the other through ordinary majority voting.

Neither may be willing to sell.

Neither may accept the other’s valuation.

The company can consequently remain economically valuable but practically ungovernable.

First Question: A.Ş. or Ltd. Şti.?

Before selecting a legal remedy, determine the company’s legal form.

The remedies applicable to a Ltd. Şti. and an A.Ş. are not identical.

This distinction is particularly important for judicial withdrawal and dissolution proceedings.

First Review the Articles of Association

The articles may already contain mechanisms affecting the dispute.

The shareholder should examine provisions concerning management, representation, voting, transfer restrictions, privileged shares and other governance arrangements.

Then Review the Shareholders’ Agreement

Many international joint ventures have a separate shareholders’ agreement.

This document can be decisive.

It may contain a specific definition of deadlock and a contractual procedure that must be followed when deadlock occurs.

What Does the Contract Define as Deadlock?

The agreement may state that deadlock occurs only after a specified matter has been rejected at two consecutive meetings.

Another agreement may require escalation to senior representatives before deadlock is formally triggered.

The contractual definition should be followed precisely.

Negotiation Period

Some agreements require shareholders to negotiate for 15, 30 or 60 days before invoking an exit mechanism.

Failure to follow the contractual sequence may create additional disputes.

Mediation

The agreement may require mediation or another agreed dispute-resolution step.

Buy-Sell Mechanism

Some shareholders’ agreements provide a procedure under which one shareholder offers a price and the other must either sell at that price or buy the initiating shareholder’s interest according to the contractual mechanism.

Such clauses require careful strategic analysis.

A shareholder should not trigger one without having the financial capacity to deal with either possible outcome.

Put Option

A deadlock may trigger a contractual put option permitting one shareholder to require the other to purchase the shares.

The triggering conditions and valuation provisions should be checked carefully.

Call Option

Conversely, the agreement may provide a right to acquire the other shareholder’s interest following defined events.

Independent Valuation Mechanism

The contract may require an independent expert to determine fair market value.

Where such a mechanism exists, it may provide a commercially efficient route to settlement.

Option 1: Negotiate a Voluntary Buyout

A negotiated buyout is frequently preferable to destroying a profitable business.

The first question is:

Which shareholder should remain?

The second is:

What is 50% of the company actually worth?

Do Not Start With Nominal Capital

Suppose the company’s registered capital is TRY 20 million.

Each shareholder’s nominal interest is TRY 10 million.

But the company owns a factory, commercial property, machinery, intellectual property, customer contracts and substantial retained profits.

TRY 10 million does not automatically represent the economic value of either shareholder’s 50% stake.

Obtain a Company Valuation

A proper buyout analysis may consider assets, liabilities, cash, debt, receivables, real estate, machinery, inventory, profitability, future earning capacity, intellectual property and other relevant factors.

The methodology should reflect the nature of the business.

50% Is Not an Ordinary Small Minority Position

This matters when discussing valuation.

A 50% shareholder can have substantial governance power and blocking rights.

Accordingly, the economic characteristics of a 50% interest should not simply be equated with those of a small passive minority holding.

Do Not Accept an Arbitrary Minority Discount

One shareholder may say:

“Nobody would buy your 50%, so I am applying a 40% minority discount.”

That does not automatically establish the appropriate legal or economic value.

The valuation context and applicable exit mechanism matter.

Option 2: One Shareholder Buys the Other

Where both parties accept that continued co-ownership is impossible, the commercially rational solution may be to determine value and allow one party to continue the business.

The buyout agreement should address more than the share price.

Shareholder Loans

Suppose each partner initially invested EUR 1 million in equity.

The foreign shareholder later provided another EUR 750,000 as a shareholder loan.

A buyout of the shares should not automatically extinguish that separate EUR 750,000 receivable.

Unpaid Dividends

Existing dividend receivables should be identified separately.

Personal Guarantees

This is critical.

A shareholder may sell the entire 50% interest but remain personally liable for company bank debt under a guarantee.

The economic exit is not complete until those exposures have been addressed.

Management Positions

A shareholder may also be a director, board member or manager.

Share transfer and management resignation are separate matters.

Representation Authority

Banking and company representation authority should be addressed at closing.

Option 3: Sell to a Third Party

One shareholder may seek an external buyer.

Whether this is practically possible depends on the company type, transfer restrictions and corporate documents.

A third-party purchaser may also be reluctant to acquire 50% of a company while the remaining shareholder is openly hostile.

Resolving governance arrangements may therefore be essential to making the shares marketable.

What If the Other Shareholder Blocks a Third-Party Sale?

Document the conduct.

A pattern in which one shareholder blocks outside buyers and simultaneously offers an artificially low price may become relevant in the broader dispute.

However, the legal consequences depend on the company form, contractual restrictions and specific facts.

Option 4: Judicial Withdrawal From a Ltd. Şti.

For a Turkish limited company, TCC Article 638 is particularly important.

Where just cause exists, a shareholder may request judicial permission to withdraw from the company.

A genuine, severe and continuing 50/50 deadlock may therefore require analysis under this provision, especially where the conflict is accompanied by other serious circumstances.

Deadlock Does Not Automatically Equal Just Cause

This distinction is important.

A temporary disagreement does not automatically justify judicial withdrawal.

The court will evaluate the seriousness and persistence of the conflict and its effect on the shareholder relationship and company.

Evidence of Persistent Deadlock

Evidence can include repeated unsuccessful general assembly meetings, rejected budgets, inability to appoint management, conflicting management instructions, blocked banking decisions and extensive correspondence demonstrating that attempts at resolution have failed.

Breakdown of Trust

In a closely held company established around personal cooperation, an irreversible collapse of trust can become particularly significant.

Financial Misconduct Alongside Deadlock

The case becomes materially more serious where deadlock accompanies allegations such as unexplained withdrawals, related-party payments or withholding of financial records.

Information Rights Violations

Repeated obstruction of legitimate information and inspection rights can also form part of the factual picture.

Exit Compensation Following Ltd. Şti. Withdrawal

Where a shareholder validly exits a limited company, the statutory framework concerning exit compensation (ayrılma akçesi) becomes relevant.

TCC Article 641 provides, in principle, for compensation corresponding to the real value of the departing shareholder’s capital share.

This can make valuation one of the central issues in a 50/50 deadlock case.

Example

Company real economic value: EUR 6 million.

Each shareholder: 50%.

This does not mechanically establish every aspect of the eventual legal valuation, but it immediately demonstrates why a nominal-capital offer may be economically unrealistic.

The company should be properly valued under the applicable legal framework.

Option 5: Dissolution of a Ltd. Şti. for Just Cause

A more serious remedy exists under TCC Article 636.

Where just cause exists, a shareholder may request dissolution of the limited company.

This can be highly relevant where a 50/50 conflict has made the company effectively impossible to govern.

Court Does Not Necessarily Have to Dissolve the Company

This is one of the most important points for business owners.

The purpose of litigation does not necessarily have to be destroying an otherwise valuable operating company.

Instead of dissolution, the court may adopt another suitable solution within the statutory framework, including a solution under which the claimant receives the real value of the interest and leaves the company.

This can effectively transform a dissolution dispute into a judicial exit.

Why Alternative Remedies Matter

Suppose the company employs 100 people and remains commercially profitable.

The shareholders hate each other and cannot cooperate.

Liquidating the entire company may destroy significant going-concern value.

A solution separating the shareholders while preserving the business may therefore be substantially more rational where legally appropriate.

Option 6: Dissolution for Just Cause in an A.Ş.

For a Turkish joint stock company, TCC Article 531 provides a significant minority remedy.

In a non-public A.Ş., shareholders representing at least one tenth of the capital may request dissolution for just cause.

A 50% shareholder clearly exceeds that statutory capital threshold.

However, meeting the percentage threshold does not itself establish just cause.

Can a 50% Shareholder Use Article 531?

The statutory threshold is not limited to shareholders holding exactly 10%.

A 50% shareholder may fall within the capital requirement, but the specific facts and existence of just cause remain central.

Court Can Choose an Alternative to Dissolution

Article 531 gives the court flexibility.

Instead of dissolving the company, the court may order a solution under which claimant shareholders receive the real value of their shares at a date close to the decision and leave the company, or another appropriate and acceptable solution may be adopted.

This makes Article 531 highly significant in severe A.Ş. deadlock disputes.

Dissolution Is Not Automatic

The claimant should not assume:

“We are 50/50 and cannot agree, therefore the court will close the company.”

The court must evaluate whether just cause exists and what remedy is appropriate.

Option 7: Challenge Specific Corporate Decisions

Sometimes the problem is not that the entire company relationship must immediately end.

Instead, one shareholder may have caused a specific unlawful corporate resolution to be adopted.

The appropriate remedy may involve challenging that resolution rather than seeking dissolution.

Deadlock and Invalid Corporate Decisions Are Different Problems

A company may simultaneously face both.

Each requires separate legal analysis.

Option 8: Director or Manager Liability

A shareholder dispute often becomes more complicated where one 50% shareholder also controls management.

Management authority creates duties separate from ownership.

A shareholder cannot necessarily defend questionable transactions simply by saying:

“I own half the company.”

Corporate assets belong to the company.

Example: Company Money Transferred to One 50% Shareholder

Suppose Shareholder A controls company banking.

During the deadlock, EUR 900,000 is transferred from the company to Shareholder A.

Shareholder A describes the payment as:

“Money I was entitled to as owner.”

Ownership of 50% of the shares does not automatically create a personal right to withdraw 50% of company cash.

The legal basis of the payment must be established.

Company Damage Is Different From Shareholder Damage

If management improperly removes company money, the immediate loss may belong to the company.

The other 50% shareholder does not automatically acquire a direct personal claim for half of every amount removed.

The correct claimant and liability mechanism must be determined.

Option 9: Information and Inspection Remedies

Deadlock frequently causes one shareholder to lose access to company information.

The appropriate shareholder information rights depend on the company form.

The foreign shareholder should formally document requests concerning company accounts, financial statements, banking transactions and material corporate affairs.

Do Not Rely Only on Informal WhatsApp Requests

Important corporate requests should be documented in a manner suitable for later proof.

Option 10: Special Audit in an A.Ş.

Where the statutory requirements are satisfied, an A.Ş. shareholder may consider the special-audit mechanism concerning defined transactions.

This can be useful where the deadlock includes disputes about related-party payments, asset transfers or other specific financial events.

Special Audit Should Be Specific

A request such as:

“Investigate payments made by the company to businesses controlled by Shareholder B between January 2025 and June 2026”

is more focused than:

“Investigate everything the company has ever done.”

Option 11: Interim Court Protection

Deadlock litigation can take time.

The company may continue operating while the dispute is pending.

Where there is a concrete risk of serious harm, interim protection may therefore become critical.

Company Assets Being Sold

Suppose one shareholder attempts to sell the company’s principal factory during the dispute.

The available legal response depends on authority, corporate approvals and the specific risk.

Company Bank Accounts Being Emptied

Urgent action may be necessary where evidence indicates ongoing transfers that could cause irreparable or difficult-to-recover losses.

Evidence Being Destroyed

Preservation mechanisms may need consideration where accounting or digital evidence is genuinely at risk.

Precautionary Injunction

Depending on the underlying dispute and statutory conditions, ihtiyati tedbir may be relevant to protection of particular rights or assets.

Precautionary Attachment

Where there is an appropriate monetary receivable and the statutory requirements are satisfied, ihtiyati haciz may instead require consideration.

These remedies are not interchangeable.

Do Not Request a Blanket Freeze Without Legal Basis

The requested interim measure should be proportionate and connected to an identifiable legal risk.

Can the Court Appoint a Trustee Because Shareholders Are Deadlocked?

Parties sometimes assume that any shareholder dispute automatically permits appointment of a trustee or kayyım.

That is incorrect.

Trustee appointment is an exceptional intervention requiring an appropriate legal basis and circumstances. A 50/50 disagreement alone should not automatically be equated with entitlement to replace company management through a trustee.

What If the Company Cannot Function at All?

The more severe the operational paralysis, the more important the deadlock becomes.

Relevant evidence may include inability to approve essential corporate matters, persistent failure of decision-making bodies, inability to maintain necessary management arrangements or other concrete consequences demonstrating that the company cannot function normally.

General Assembly Minutes Are Critical Evidence

Every failed meeting should be documented accurately.

The minutes can demonstrate which proposals were made, how each shareholder voted and why the company could not reach a decision.

Preserve Board and Manager Records

Management-level deadlock should likewise be documented.

Preserve Emails

Emails may show failed negotiations and conflicting instructions.

Preserve Financial Information

Where deadlock involves allegations of misuse of funds, preserve all lawfully available banking and accounting records.

Preserve Buyout Offers

These can later establish the history of settlement negotiations and valuation disagreement, subject to applicable evidentiary considerations.

Create a Deadlock Timeline

A useful chronology might read:

January 2026: Budget rejected.

February 2026: General assembly fails to appoint manager.

March 2026: Banking authority dispute.

April 2026: First buyout negotiation fails.

May 2026: Financial records withheld.

June 2026: Second general assembly fails.

July 2026: Related-party transfer discovered.

August 2026: Final settlement attempt fails.

A chronology is far more persuasive than simply saying:

“We cannot work together.”

Create a Financial Dispute Matrix

For each questioned transaction record:

Date → Amount → Recipient → Legal Basis → Accounting Treatment → Approval → Disputed By → Supporting Documents.

Create a Governance Deadlock Matrix

Record:

Decision Required → Corporate Body → First Vote → Second Vote → Result → Effect on Business.

Create an Exit Matrix

Compare:

Share Sale → Negotiated Buyout → Contractual Deadlock Mechanism → Ltd. Şti. Withdrawal → Ltd. Şti. Dissolution → A.Ş. Article 531 Remedy → Other Corporate Claims.

The objective is to determine which route solves the actual problem with the least destruction of company value.

Share Valuation in a 50/50 Deadlock

A buyout can fail even when both shareholders agree that one must leave.

The disagreement then becomes purely economic.

One says:

“My 50% is worth EUR 3 million.”

The other says:

“It is worth EUR 800,000.”

A professional valuation may become necessary.

Asset-Based Valuation

This can be important for property-heavy companies.

Income-Based Valuation

Profitable operating companies may require analysis of future earning capacity.

Market-Based Valuation

Comparable transactions or companies may provide additional evidence where reliable comparables exist.

EBITDA-Based Negotiations

Commercial buyouts frequently use normalized EBITDA and an agreed multiple.

The parties must still determine which expenses should be normalized and what debt and cash adjustments apply.

Related-Party Expenses Can Distort EBITDA

Suppose one shareholder causes the company to pay unusually high consultancy fees to another business they own.

Reported profitability falls.

A valuation that blindly uses reported EBITDA may therefore understate the company’s economic performance.

Hidden Assets Can Distort Value

Company real estate, intellectual property and receivables should be investigated.

Artificial Liabilities Can Distort Value

Alleged shareholder loans and related-party debts should be verified.

Valuation Date Is Important

The legally relevant date depends on the remedy.

This can materially affect the result where company performance or asset values change during lengthy litigation.

Do Not Strip the Company During Negotiations

A shareholder who anticipates an exit should not use management control to transfer value away from the company.

Such transactions may create separate disputes and liability.

Buyout Agreement Should Resolve the Entire Relationship

A well-structured settlement should address share price, payment mechanics, shareholder loans, dividends, guarantees, management resignation, representation authority, pending claims, company property, confidentiality, restrictive covenants where relevant, tax allocation and releases.

Broad Release Clauses Require Caution

Do not release unknown financial claims before understanding the company’s transactions.

Payment Security Is Essential

A shareholder who transfers 50% of a valuable company in exchange for an unsecured promise payable over several years may exchange one corporate dispute for a collection dispute.

Simultaneous Closing

Where commercially possible, payment and share-transfer mechanics should be coordinated.

Foreign Shareholder Issues

A foreign 50% shareholder may pursue corporate remedies in Turkey even if they reside abroad.

Appropriate powers of attorney and foreign corporate documents may need formalization, translation or legalization depending on the circumstances.

Foreign Company as the Shareholder

If the 50% shareholder is itself a foreign legal entity, the authority of the persons instructing Turkish counsel and approving settlement should be documented correctly.

First 24 Hours After Serious Deadlock Emerges

Preserve the articles of association, shareholders’ agreement, general assembly minutes, management decisions, financial statements and communications. Identify whether any urgent transaction threatens company assets.

First 48 Hours

Determine the company form, governance structure and contractual deadlock provisions. Identify which corporate decisions are actually blocked and whether the company remains operational.

First 72 Hours

Prepare a preliminary valuation, identify all shareholder loans and guarantees, document any financial irregularities and compare negotiated buyout, contractual and judicial remedies.

What Not to Do During a 50/50 Shareholder Dispute

Do not withdraw company money merely because you own 50%. Do not destroy or remove corporate records. Do not use unauthorized access to the other shareholder’s private accounts. Do not sign a distressed buyout without understanding company value. Do not assume a criminal complaint is a substitute for corporate litigation. Do not assume dissolution is automatic. Do not assume the court will appoint a trustee merely because the shareholders cannot cooperate. Most importantly, do not allow personal hostility between shareholders to destroy a profitable business before evaluating an economically rational separation.

2026 Legal Strategy for a 50/50 Shareholder Deadlock in Turkey

A successful deadlock strategy should focus on separating the shareholders while preserving company value whenever legally and commercially possible. First determine whether the company is an A.Ş. or Ltd. Şti. and review the articles and shareholders’ agreement. Identify whether a contractual deadlock, put, call, buy-sell or valuation mechanism already exists. Document the corporate decisions that cannot be made and distinguish temporary disagreements from persistent governance paralysis. Obtain reliable financial information and determine the company’s approximate economic value. Investigate related-party transactions, shareholder loans and asset transfers that could distort valuation. Attempt a structured buyout where commercially realistic and protect deferred payments with appropriate security. For a Ltd. Şti., consider whether the circumstances establish just cause for judicial withdrawal under TCC Article 638 or dissolution proceedings under Article 636, including the possibility of an alternative judicial exit rather than liquidation. For an A.Ş., evaluate whether the conditions for a just-cause dissolution action under TCC Article 531 are satisfied and whether an alternative real-value exit may resolve the dispute. Separately evaluate unlawful corporate decisions, shareholder information rights and director or manager liability where financial misconduct is involved. If company assets or evidence face a concrete immediate threat, consider proportionate interim protection. The practical roadmap is therefore: identify company form → review articles → review shareholders’ agreement → define the deadlock → document failed decisions → preserve financial evidence → investigate company transactions → obtain valuation → calculate shareholder loans separately → identify guarantees → attempt negotiation → trigger contractual deadlock mechanisms where appropriate → negotiate a buyout → secure the purchase price → evaluate judicial withdrawal for a Ltd. Şti. → evaluate just-cause dissolution → evaluate Article 531 for an A.Ş. → pursue separate management-liability claims where necessary → seek proportionate interim protection → obtain a judicial or negotiated separation → preserve the operating value of the business.

Frequently Asked Questions

1. What happens when two shareholders each own 50% of a Turkish company?

If they cannot reach the votes necessary for important corporate decisions, the company may enter a governance deadlock. The legal consequences depend on the company type, corporate documents and seriousness of the paralysis.

2. Can one 50% shareholder force the other to sell?

There is no universal rule allowing one 50% shareholder to force the other to sell merely because they disagree. A compulsory exit may instead arise from a contractual mechanism or an appropriate judicial remedy where its legal requirements are satisfied.

3. Can a 50% shareholder leave a Turkish Ltd. Şti. through court proceedings?

Potentially. Where just cause exists, judicial withdrawal under TCC Article 638 may be available. A persistent and serious deadlock should be evaluated together with all surrounding circumstances.

4. Can a 50/50 Ltd. Şti. be dissolved by the court?

A shareholder may seek dissolution for just cause under TCC Article 636 where the statutory conditions exist. The court may also consider an appropriate alternative remedy rather than dissolution.

5. Can a 50% shareholder in an A.Ş. bring a just-cause dissolution action?

A 50% shareholder exceeds the capital threshold specified for the minority remedy under TCC Article 531 in a non-public A.Ş., but the claimant must still establish just cause. Meeting the ownership threshold alone is insufficient.

6. Will the court necessarily liquidate a profitable company?

No. Turkish company law provides flexibility in relevant just-cause proceedings, and an appropriate alternative solution may be preferred where the legal conditions are satisfied.

7. How is the buyout price determined?

The appropriate valuation depends on the business and legal mechanism. Company assets, liabilities, profitability, real estate, receivables, debt, intellectual property and other relevant economic factors may need to be considered.

8. Can one 50% shareholder withdraw half of the company bank balance?

No automatic entitlement arises merely from owning 50% of the shares. Corporate funds belong to the company, and withdrawals require a valid legal and corporate basis.

9. Can a court appoint a trustee because the shareholders are deadlocked?

Not automatically. Trustee appointment is an exceptional remedy requiring an appropriate legal basis and factual circumstances; ordinary shareholder disagreement does not itself guarantee such an appointment.

10. What should a foreign 50% shareholder do first?

Preserve the corporate and financial evidence, identify the decisions that are genuinely blocked, review the shareholders’ agreement for deadlock mechanisms and determine the company’s approximate value before choosing between negotiation, buyout and litigation.

Legal Support for 50/50 Shareholder Deadlock Disputes in Turkey

Foreign investors and company partners facing a 50/50 deadlock in Turkey may require coordinated legal assistance concerning shareholder buyouts, company valuation, deadlock clauses, judicial withdrawal, just-cause dissolution, shareholder information rights, director liability, related-party transactions and protection of company assets.

Fırat Fesih Kaya Law Office assists foreign shareholders, international investors and business partners in complex Turkish corporate disputes. Fırat Fesih Kaya can assist with analyzing deadlock provisions, investigating company finances, negotiating a shareholder buyout, determining an appropriate valuation strategy and pursuing withdrawal, dissolution or other corporate remedies where the legal requirements are satisfied.

Phone: +90 312 434 22 22
Mobile Phone: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yildirim Tower, Balgat, Cankaya / Ankara, Turkey