Electronic Ledger Practice in Cases of Merger and Spin-off

The procedures and principles regarding the creation, keeping, storage, and submission of commercial ledgers that are not related to a company’s accounting in electronic format under the Electronic Commercial Ledger System (ETDS) were set out in the Communiqué on the Keeping of Commercial Ledgers Not Related to Company Accounting in Electronic Format (Communiqué) published in the Official Gazette dated 14 February 2025 and no. 32813. The ledgers required to be kept under the ETDS for joint stock companies include the share ledger, the board of directors’ resolution ledger, the board of managers’ resolution ledger, and the general assembly meeting and negotiation ledger. The electronic ledger practice may also directly affect corporate restructurings such as mergers, spin-offs, and conversions of company type. The “Guideline on the Electronic Commercial Ledger System (ETDS) in 100 Questions” (Guideline), published by the Directorate General of Domestic Trade of the Ministry of Trade on 17 June 2025, also provides explanations regarding mergers, spin-offs, and conversions of company type.

Key considerations regarding the implementation of the Electronic Commercial Ledger System in cases of company mergers, spin-offs, and conversions of company type are summarized below:

Merger

• In a merger by acquisition, the legal entity of the acquired company is terminated, and its ledgers on the ETDS are closed. Since the acquiring company’s legal entity continues, its existing electronic ledgers remain in use via the ETDS.
• In the case of a merger between a company that keeps its ledgers electronically and a company that keeps them in physical format, the method of the acquiring company shall prevail. The ledgers shall continue to be kept in whichever format, electronic or physical, the acquiring company currently uses.
• In a merger by new establishment, the legal entities of all participating companies are terminated, and their commercial ledgers are closed on the ETDS upon their deregistration from the trade registry. If the newly established company is founded during the period between 01.07.2025 and 31.12.2025 and is subject to the approval of the Ministry of Trade, it should keep electronic ledgers. If it is not subject to such approval, it may choose to keep its ledgers either electronically or in physical format. However, for all companies established after 01.01.2026, keeping ledgers in electronic format is mandatory.

Spin-off

• If a new company is established as a result of the spin-off, the provisions applicable to new incorporations shall apply to this company. In cases where the acquiring companies are established between 01.06.2025 and 31.12.2025 and are not subject to the approval of the Ministry of Trade, they may keep their ledgers either electronically or in physical format. However, for all companies established after 01.01.2026, keeping ledgers in electronic format is mandatory.
• If the assets of the spun-off company are transferred to a previously established company, the existing ledger-keeping method of the acquiring company shall prevail. Accordingly, ledgers shall continue to be kept in the same format, electronic or physical, as currently used by the acquiring company. However, the acquiring company may voluntarily switch to the ETDS.

Conversion of Company Type 

• Upon the deregistration of the limited liability company from the trade registry, its commercial ledgers are automatically closed in the ETDS by the system, and the commercial ledgers of the newly established joint stock company, as the successor of the limited liability company, are created via the ETDS at the time of incorporation. If the new company is established between 01.07.2025 and 31.12.2025 and is not among the companies subject to the approval of the Ministry of Trade, it may optionally keep its ledgers either electronically or in physical format. However, for all companies established after 01.01.2026, it is mandatory to keep ledgers in electronic format.

In this context, it is understood that the obligation to keep electronic ledgers in corporate restructuring processes may vary depending on (i) the type of transaction, (ii) whether the company is subject to the approval of the Ministry of Trade, and (iii) the registration date of the company to be established through merger/spin-off. The electronic ledger obligations of the companies subject to the restructuring project should be considered for a safe registration of the transaction. 

Apart from this, board of directors’ resolutions regarding the issuance of share certificates and share transfer would be important for the planning of any future merger and/or spin-off transactions. 

You can access the Communiqué on the Electronic Commercial Ledger System (ETDS) here, and the full text of the Guideline published by the Ministry of Trade in Turkish here.