"What is my company worth?" has no single answer: it depends on the purpose, date and definition of value. A partner exit looks for "fair value", a sale negotiation for "market value", tax for the "arm's length price".
When is valuation needed?
| Situation | Basis |
|---|---|
| Exit or expulsion of a limited company partner (exit payment) | TCC 641: fair value of the share |
| Purchase of shares in a joint stock company dissolution case for just cause | TCC 531 |
| Exit payment and exchange ratio in mergers, demergers, change of form | TCC 141 and the merger agreement |
| Acquisition of a share at fair value when a transfer is not approved | TCC 493 (joint stock), 597 (limited) |
| Contribution in kind | TCC 343: court-appointed expert |
| Sale of shares or assets between related parties | CTL 13: arm's length |
| Capital markets transactions | CMB regulations, International Valuation Standards |
Methods
| Method | When strong? | Note |
|---|---|---|
| Discounted cash flows | Businesses with predictable cash flow | Projections and discount rate must be in the same currency and price level |
| Capitalisation of earnings | Mature, stable businesses | Requires normalised profit |
| Market multiples and comparable transactions | Where comparable data exists | Foreign multiples adjusted for country risk; control premium / minority discount separated |
| Adjusted net assets | Asset-heavy or dormant companies | Non-monetary items brought to current value |
| Liquidation value | Closure, enforcement, creditor scenarios |
Why the balance sheet alone is not enough
As inflation adjustment is not made in tax records for the 2025–2027 periods, book values can be far below current value, especially for property, machinery and inventory. To reach enterprise value, bridge items are also adjusted: net debt (loans, leases, payables to partners, severance liability, restructured tax debt), normal working capital, non-operating assets and one-off items, and normalisations such as partner salaries.
Tax side
- A non-arm's-length price with related parties is a hidden profit distribution (CTL 13).
- Gain on sale of participations: part of the gain on shares held for at least 2 full years is exempt if kept in a special fund account (CTL 5/1-e).
- Individual partner: gains on limited company shares are taxable regardless of holding period; for joint stock companies exempt if share certificates were issued and held for more than 2 years.
- Competition Authority: approval required for acquisitions above the turnover thresholds.
A defensible report
Purpose and addressee, definition and basis of value, valuation date, scope and limitations, assumptions (growth, margin, investment, discount rate), reasons for the choice and weighting of methods, sensitivity analysis, statement of independence.
Duration: usually 2–4 weeks for a mid-sized company with complete data.
FAQs
Can company value be calculated with a formula? Only as a range. A multiple-based value without adjusting net debt, non-operating assets and one-off items cannot be defended.
Is the exit payment made at book value? No; book value is an input but does not reflect fair value alone.
Can a court expert report be challenged? Yes, with a technical opinion showing errors in assumptions and their numerical effect.
How long is a report valid? Only for the date it states; results change as interest rates, exchange rates and company results change.
Sources
Turkish Commercial Code No. 6102 arts. 141, 343, 493, 531, 597, 641; Corporate Tax Law No. 5520 arts. 5/1-e and 13; Tax Procedure Law No. 213 art. 267 (arm's length price); Law No. 7571; CMB Communiqué III-62.1 on Valuation Standards; TFRS 3 and TFRS 13.