Factoring is a financing method in which businesses can immediately turn the checks they receive in return for their sales into cash, without waiting for their maturity. Businesses transfer the sales invoice they have issued to their customers in return for the check they receive to factoring companies and they immediately receive the necessary cash for their business. Factoring companies can offer –Financing, -Guarantee, -Collection services. There are 52 factoring companies actively trading at the moment.
A.Factoring Company Establishment Process and Transactions
Entrepreneurs who want to establish a factoring company need to fulfill some conditions, and they need to get permission from some institutions. Explanatory information about the steps to be followed by these companies, which are established by obtaining a preliminary permission from the Undersecretariat of Treasury, is presented below:
Undersecretariat Permits
Before the permission to be obtained from the Undersecretariat of Treasury, these companies must have the status of a joint stock company, and all of the owned shares must be registered. They should also issue these shares for cash. Their capital must also be paid in TL 20 thousand. The main documents to be prepared after these conditions are met are as follows:
• A copy of the Commercial Registry newspaper in which the articles of association of the company were published.
• Notarized circular of signatures of authorized signatories
• In case the founders are natural persons, detailed curriculum vitae, identity card, residence report, income tax return for the previous year, introduction form of the founder, criminal record report
• If the founders are legal entities, income statement, balance sheet, activity reports, if any, and criminal record report for the last three years
• Graduate certificates of one of the higher education institutions such as economics, business administration, law, engineering, finance, banking, regarding directors, assistant directors and first-degree officials
• Report that these people have not requested liquidation, bankruptcy or bankruptcy before
• Role and authorization definition documents indicating that the service units of the factoring company will operate and their personnel are appointed.
• Clean reports obtained from the competent authorities regarding the shareholders and managers of the Factoring Company that these persons have not been sentenced to imprisonment for more than 5 years, have not been convicted of disgraceful crimes such as embezzlement, bribery, extortion, fraud, fraudulent bankruptcy, and have not been convicted of crimes such as attempted tax evasion.
B.Factoring Company Tax Obligations
There are special provisions regarding factoring transactions carried out by factoring companies. This taxation is examined within the scope of the general provisions of tax laws. These companies are subject to Joint Stock company corporate tax and hence their earnings are taxed under corporate tax. Detailed information should be obtained from Factoring special provisions regarding other taxation and payments, and updates should be followed.
C.Factoring Company Capital Structure and Auditing
By BRSA Financial Institutions Association; Efforts are underway to increase the paid-in capital figures of companies that are members of factoring, financial companies and leasing companies to 30 million TL by the end of 2019. It is expected that there will be a decrease in these types of companies due to the capital requirement requirement and the liquidity shortage brought about by the economic environment.
Treasury Undersecretary; Factoring companies that will operate in accordance with the provisions of the decree issued on money lending business will be informed by the T.R. The Central Bank has the authority to determine and release it by taking its opinion. The activities of these companies are supervised by the Ministry of Finance and the Undersecretariat of Treasury. It is obligatory to keep all kinds of documents, information and books required by these institutions to be submitted by the factoring company and its personnel.
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Ünal § Partners Legal Team
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