A sole proprietorship is the simplest form of business to establish, characterized by individual initiative, non-legal entity status, and single ownership. At Mete CPA & Auditing, we provide you with accurate information and the most up-to-date procedures for 2026 regarding sole proprietorships.
İçindekiler
What is a Sole Proprietorship?
A sole proprietorship is a business type established by a single individual who is personally responsible for all business debts. Even if the trade name is different, all collections and payments are made in the individual’s name, and the person’s name appears on all official transactions rather than a corporate entity.
Advantages and Disadvantages of a Sole Proprietorship
It is a popular business form due to its single ownership, simplicity, ease of setup, and nominal costs. The owner only needs to register their name and the company. However, there is a significant disadvantage: the sole owner remains personally liable for all business debts. Therefore, if the business faces financial issues, creditors can file a lawsuit against the owner. If successful, the owner must pay business debts with their personal assets.
Advantages of Starting a Sole Proprietorship
The biggest advantage is the fast and easy business establishment process.
Other advantages include:
- No partners are required. The company can be established individually.
- It can be opened without initial capital.
- Legal procedures are completed rapidly.
- Minimal bureaucracy makes it easier to build a solid foundation.
- Low establishment and maintenance costs.
- Easy to open and equally easy to close.
- Low accounting and bookkeeping expenses.
Disadvantages of a Sole Proprietorship
The main disadvantage is that the owner is solely dependent on their own efforts, capital, management skills, and entrepreneurial identity for all debts and payments. Additionally, commercial prestige may be lower compared to Limited (LTD) or Joint Stock (A.Ş.) companies in the eyes of official institutions and large corporations.
While the corporate tax rate is fixed at 25% for capital companies, the tax rate for sole proprietorships increases proportionally with income. Therefore, the progressive tax rate can reach up to 40%.
Requirements for Establishing a Sole Proprietorship
The most important requirement is a Certified Public Accountant (CPA). Once you agree with a CPA, many steps are handled for you. The required documents and steps are:
- Copy of ID card (Passport for foreigners),
- Signature declaration (Notarized),
- Workplace rental contract or title deed,
- E-Government (E-Devlet) credentials,
- Power of Attorney for the CPA.
2026 Sole Proprietorship Formation Costs
As of 2026, the cost of establishing a sole proprietorship typically ranges between 3,500 – 5,000 TRY. It remains the most cost-effective business type. Estimated average prices are as follows:
- Notarized signature declaration: ~650 TRY
- Tax office contract stamp duty: ~850 TRY (Varies based on rent)
- Notarized CPA power of attorney: ~1,850 TRY
Additional one-time expenses:
- Company stamp: ~250 TRY
- Electronic Register (E-Defter/E-Fatura) setup: ~1,500 – 2,500 TRY
- Chamber of Commerce registration (if required): ~5,500 – 7,500 TRY
If you want to open your dream company quickly and professionally with Mete CPA & Auditing, you can contact us during business hours. Also, do not forget to read our guide on Limited Company Formation to understand the differences between sole proprietorships and limited companies.
