Company Director Withdraws Money as a Shareholder Loan in Turkey: When Does Personal Liability Arise? 2026 Updated Guide

When can a company director or shareholder become personally liable for money withdrawn from a Turkish company as a shareholder loan? A 2026 guide to repayment, tax, creditor and director-liability risks.

Money transferred from a Turkish company to a director or shareholder is not automatically unlawful. However, describing a withdrawal as a “shareholder loan” does not by itself protect the director from personal liability. The legal position depends on the type of company, whether the recipient is also a shareholder, the company’s financial condition, the accounting treatment of the transaction, whether there is a genuine repayment obligation, corporate approvals, tax consequences and whether the withdrawal prejudices the company or its creditors. Where company funds are repeatedly used for personal expenses without a genuine commercial or legal basis, the issue can develop from an ordinary receivable into a significant corporate, tax, civil and potentially criminal dispute.

Can a Director Borrow Money From Their Own Company in Turkey?

The answer depends heavily on the corporate structure and the director’s legal capacity.

A person may simultaneously be a shareholder and company manager or board member. The transaction must therefore be analyzed separately from both perspectives. A payment that appears in the accounting records as a shareholder receivable does not automatically establish that it complies with Turkish company law.

Shareholder Status Is Critical

The first question should be whether the director receiving the money is actually a shareholder.

If the recipient is not a shareholder, rules specifically governing shareholders’ indebtedness to the company may not apply in the same manner, but directors’ duties, unauthorized payments, employment arrangements and general civil-law principles can still become relevant.

Joint Stock Companies Require Particular Attention

For joint stock companies, the Turkish Commercial Code contains restrictions concerning shareholders becoming indebted to the company.

Whether a particular withdrawal violates those restrictions requires examination of the company’s capital position, statutory reserves, distributable resources and the precise nature of the transaction.

Limited Liability Companies Must Also Be Reviewed Carefully

In a limited liability company, payments to partners and managers should similarly be examined according to the applicable company-law framework, articles of association, corporate resolutions and financial circumstances.

A company account should never be treated as the manager’s personal bank account merely because the manager controls the company.

Calling the Payment a “Loan” Is Not Enough

The actual substance of the transaction matters.

Questions include whether there is a loan agreement, repayment date, interest arrangement, corporate authorization, accounting entry and evidence that repayment was genuinely expected.

If the shareholder continuously withdraws money without making repayments, authorities, creditors or other shareholders may question whether a genuine loan ever existed.

Accounting Records Are Important Evidence

The company’s ledger may record the amount as a receivable from the shareholder. This can be important evidence that the company expects repayment.

However, accounting treatment alone does not necessarily determine whether the original withdrawal was lawful.

Was the Company’s Capital Fully Paid?

The company’s capital position should be checked before analyzing shareholder indebtedness.

Unpaid capital obligations can materially affect whether a shareholder is permitted to become indebted to the company.

Reserves and Distributable Resources Matter

Another important question is whether the company’s financial structure satisfies the conditions imposed by company law.

A company experiencing capital loss or serious financial difficulty presents a substantially different risk profile from a financially healthy company making a properly documented transaction.

What If the Company Needs the Money to Pay Creditors?

This can significantly increase the risk.

If a director withdraws substantial company funds while taxes, employees, suppliers, banks or other creditors remain unpaid, the transaction may later be scrutinized as part of attempts to determine why the company became unable to satisfy its obligations.

Personal Liability of Directors

Directors and managers can face personal liability where they breach duties imposed by law, the articles of association or corporate governance rules and the required conditions for liability are established.

A director should therefore consider not only whether the company technically transferred the money, but whether approving or receiving that transfer complied with their management duties.

Conflict of Interest Can Become Important

A director deciding whether the company should lend money to themselves is in an obvious conflict situation.

Corporate decision-making procedures, approvals and documentation should therefore be examined carefully.

Other Shareholders May Challenge the Transaction

In companies with multiple shareholders, one shareholder may object to another shareholder or director using corporate money for personal purposes.

This can lead to claims for repayment, director-liability proceedings, disputes concerning company records and broader shareholder litigation.

Minority Shareholders Should Review Bank Records

Where unexplained withdrawals are suspected, company bank statements, accounting ledgers, general assembly records, board or managers’ resolutions and related-party accounts can become important evidence.

Repeated transfers described vaguely as “advance,” “loan” or “current account” deserve particular examination.

When Must the Director Repay the Money?

The answer depends on the legal nature and terms of the transaction.

Where the company has a genuine receivable, repayment obligations should be determined from the contract, corporate records and applicable legal rules. An indefinite practice of withdrawing money without meaningful repayment can increase both corporate and tax risks.

Interest-Free Loans Can Create Tax Questions

A company allowing a shareholder or related person to use corporate funds without appropriate consideration can create tax issues, particularly where related-party and transfer-pricing principles become relevant.

The accounting and tax treatment should therefore be reviewed together with the corporate-law analysis.

Transfer Pricing Risks

Transactions between a company and related persons can attract scrutiny if they do not reflect conditions that independent parties would reasonably accept.

The fact that a shareholder controls the company does not eliminate the need to consider the economic terms of the transaction.

Could the Withdrawal Be Treated as a Hidden Profit Distribution?

Depending on the facts and tax analysis, transactions providing inappropriate economic benefits to related persons may raise disguised-profit-distribution questions.

This can result in tax assessments and additional financial consequences separate from the company’s civil claim for repayment.

Salary and Shareholder Loans Should Not Be Mixed

If the director is entitled to salary, management fees or another form of remuneration, those amounts should be documented accordingly.

Recording personal withdrawals as shareholder loans and later attempting to characterize them retrospectively as salary can create significant accounting and evidentiary problems.

Dividend Payments Are Also Different

A dividend is not the same as a shareholder loan.

Dividend distributions must satisfy the applicable corporate requirements and should be supported by proper corporate decisions and financial statements.

Personal Expenses Paid by the Company

Luxury purchases, holidays, personal credit-card payments, private rent, family expenses and similar payments made from company funds require careful examination.

The fact that they are booked to a shareholder current account may establish a company receivable, but it does not automatically eliminate other legal or tax consequences.

Company Credit Cards Can Create the Same Problem

A director using a company credit card for private expenditure should maintain a clear distinction between legitimate business expenses and personal spending.

Repeated private expenditure can become significant evidence in later shareholder, creditor or tax disputes.

Can the Company Sue the Director for Repayment?

Potentially, yes.

If the company’s records establish a receivable and the director fails to repay it, the company may pursue the debt through the appropriate legal proceedings.

The precise claim depends on how the transaction was structured and documented.

What If the Director Controls the Company and Refuses to Sue Themselves?

This is a particularly important issue in shareholder disputes.

Corporate representation, general assembly rights, director-liability mechanisms and other remedies may need to be examined to prevent the controlling director from using their position to block recovery.

Liability Can Become More Serious During Insolvency

If the company later becomes insolvent, shareholder and director withdrawals can receive much greater scrutiny.

Creditors, insolvency bodies and other interested parties may investigate transactions that removed value from the company before financial collapse.

Repayment After the Dispute Begins Does Not Erase Everything

Repaying the principal may reduce the company’s outstanding financial loss, but it does not necessarily eliminate every consequence.

Interest, tax exposure, corporate liability or other claims may remain depending on the circumstances.

Can Creditors Pursue the Director Personally?

Company debts and directors’ personal liabilities are not automatically identical.

However, personal exposure may arise under specific corporate, tax, public-receivables or other legal rules where their statutory conditions are satisfied. Each basis of liability should be analyzed separately rather than assuming that being a director automatically makes the person responsible for every company debt.

Public Debts Require Separate Analysis

Tax and other public receivables involve special statutory liability regimes.

A dispute concerning an ordinary shareholder loan should therefore be separated from questions concerning personal liability of company representatives or partners for unpaid public debts.

Criminal Liability Is Not Automatic

An irregular shareholder loan does not automatically constitute a criminal offense.

However, where company assets are deliberately misappropriated, records are falsified, fraudulent documents are used or other criminal elements exist, the matter can extend beyond ordinary corporate liability.

Intent and Evidence Become Critical

Where criminal allegations arise, investigators may examine bank movements, accounting records, corporate resolutions, invoices, communications and the ultimate use of company funds.

The legal characterization should be based on the actual facts rather than simply the accounting label attached to the payment.

Directors Should Avoid Retrospective Documentation

Creating a loan agreement after a dispute begins and presenting it as though it existed when the money was withdrawn can seriously damage credibility.

Any later agreement should accurately state when and why it was created.

Foreign Shareholders Face the Same Corporate Risks

Foreign ownership does not create an exemption from Turkish corporate rules.

Foreign investors serving as directors or managers of Turkish companies should maintain clear documentation for related-party payments, particularly where the company forms part of an international group.

Parent Company Transactions Should Be Distinguished

A payment to an individual shareholder is different from an intercompany loan between a Turkish subsidiary and its foreign parent.

Intercompany financing raises additional corporate, tax, transfer-pricing and potentially foreign-exchange considerations.

What Should a Company Do If Large Shareholder Loans Already Exist?

The company should first establish the exact balance.

Reconcile bank statements, accounting entries, payments, repayments, expenses and any accrued amounts. Then identify the legal basis for each transaction rather than treating the entire current-account balance as one undifferentiated figure.

Create a Transaction-by-Transaction Table

For significant disputes, prepare a table showing:

Date of withdrawal, amount, recipient, bank account, accounting description, corporate approval, stated purpose, repayment date, actual repayment and supporting document.

This frequently reveals whether the balance represents genuine loans or a mixture of unrelated transactions.

Review Limitation Periods

Old shareholder receivables should be reviewed promptly for applicable limitation issues.

The relevant period can depend on the legal characterization of the claim, so companies should not assume that an accounting receivable can remain collectible indefinitely without action.

Preserve Digital Evidence

Emails, messages and internal accounting instructions may show why a payment was made and whether the recipient acknowledged an obligation to repay it.

Such evidence can become particularly important where formal contracts are missing.

What Should Minority Shareholders Do?

A minority shareholder concerned about unexplained withdrawals should obtain and preserve available corporate records, identify the transactions precisely and evaluate company-law remedies before making broad accusations.

A transaction-specific approach is usually much stronger than alleging generally that “money was taken from the company.”

What Should Directors Do Before Taking a Shareholder Loan?

Before any payment, the company should examine whether the transaction is legally permissible, whether corporate approval is required, whether the company’s financial condition permits it, how interest and repayment will be structured and how the transaction will be treated for accounting and tax purposes.

2026 Practical Risk-Control Checklist

Companies should maintain a written related-party financing policy, require proper corporate approvals, distinguish salary and dividends from loans, use written repayment terms, reconcile shareholder accounts regularly, document interest and tax treatment, prohibit undocumented personal spending and review large outstanding balances before year-end.

Frequently Asked Questions

Can a company director borrow money from their company in Turkey?

Potentially, but the transaction must comply with the applicable company-law, corporate, financial and tax requirements. The director’s shareholder status is particularly important.

Does recording the money as a shareholder loan make it legal?

No. Accounting classification is relevant evidence but does not automatically establish legal compliance.

Can the company demand repayment?

Potentially, yes, where the payment creates a genuine receivable owed to the company.

Can other shareholders sue over the withdrawal?

Potentially. Depending on the circumstances, shareholder and director-liability remedies may become available.

Can an interest-free shareholder loan create tax liability?

Potentially. Related-party and transfer-pricing rules should be examined.

Can the withdrawal be treated as a disguised distribution of profit?

Depending on the transaction and applicable tax rules, that issue may arise where a shareholder receives an inappropriate economic benefit.

Is a shareholder loan the same as a dividend?

No. A loan creates an obligation to repay, while a dividend is a distribution governed by separate corporate requirements.

Can personal expenses be paid through the company?

Personal expenditure should not be confused with legitimate company expenses. Recording the payment as a shareholder receivable does not necessarily eliminate corporate or tax consequences.

Can a director become personally responsible if the company later fails?

Potentially, but personal liability depends on the particular legal basis and facts. Insolvency can lead to increased scrutiny of earlier withdrawals.

Can shareholder-loan disputes become criminal cases?

Potentially, where additional facts indicate conduct satisfying the elements of a criminal offense. An ordinary unpaid corporate receivable is not automatically a criminal matter.

Client-Focused Legal Support for Shareholder Loan and Director Liability Disputes

Disputes involving shareholder withdrawals can develop into repayment claims, director-liability proceedings, minority shareholder disputes, tax assessments, creditor claims and investigations concerning misuse of company assets. Fırat Fesih Kaya Law Office assists Turkish and foreign-owned companies, shareholders, investors and directors with corporate disputes involving shareholder current accounts, related-party transactions and management liability. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing company records and bank movements, recovering corporate receivables, defending directors and managers, protecting minority shareholders and coordinating corporate litigation with related tax and enforcement proceedings.

Phone:
+90 312 434 22 22

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+90 532 769 22 22

Email:
info@firatfesihkaya.av.tr

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06520 Balgat, Çankaya, Ankara, Turkey