This is the English version of a Turkish article. The original, with further detail and linked petition templates, is at Esnaf ve KOBİ'ler İçin Hukuki Risk Kontrol Listesi.
Most legal problems in small businesses come from gaps in contracts and paperwork. Work done without a written contract, unsigned delivery documents and disorderly account records make collecting debts directly harder. The checklist below sets out the ten headings most likely to turn into disputes.
Most of the legal problems small businesses face are preventable. Solving them after they arise is expensive and slow.
This article lists the ten traps small traders and SMEs fall into most often, and the precautions against them.
Contracts and Paperwork
1. Not putting the contract in writing. “We trust each other” is the most expensive mistake there is once a dispute arises. Oral agreements are valid but hard to prove.
Put at least these in writing: the scope of the work, the price and payment timetable, the delivery period, penalties for delay, the grounds of termination, and (if you are a trader) the competent court.
2. Sending invoices without proof of service. Under Article 21 of the Commercial Code, a recipient who does not object to an invoice within eight days is treated as having accepted its content. But that consequence requires proof that the invoice was properly served.
So send invoices by a method that leaves a record — e-invoicing, registered electronic mail, or recorded delivery post.
3. Not obtaining a delivery or acceptance document. Without a signed document showing that the goods were delivered or the service performed — a delivery note, a handover record, an acceptance form — collecting the debt becomes far harder.
Debts and Cheque Risk
4. Letting a debt become time-barred. The periods vary with the nature of the debt: three years on cheques and promissory notes, five years for certain debts, and ten years as the general rule.
Keep a schedule of debts and do not delay notice and enforcement once they are overdue. Limitation is interrupted by enforcement or proceedings.
5. Taking a cheque without checking it. What to check: the date and place of issue, the signature, the chain of endorsements, and the drawer's cheque report through the QR code enquiry.
Where a cheque is dishonoured, presentation to the bank within the period is essential. Once the endorsement of dishonour is made, a complaint can lead to a ban on drawing cheques and opening cheque accounts, and to a judicial fine.
6. Ignoring guarantees and shareholder liability. Shareholders of a limited company are liable in proportion to their shares for public debts that cannot be collected from the company. Legal representatives are liable under the repeated Article 35 of Act no. 6183.
For personal guarantees given for a company, check the formal requirements of Article 583 of the Code of Obligations: the maximum amount, the date and the words describing the guarantor as jointly and severally liable must be in the guarantor's own handwriting.
Employment Risks
7. Contracts of employment and payroll. Declaring a wage below the real figure is a risk for the employer too: in claims to establish employment and the true wage it produces backdated contributions, late-payment surcharges and administrative fines.
Paying wages through a bank is compulsory for employers above a certain size, and it makes proof straightforward.
8. Not following the procedure on dismissal. For employees within job security, a dismissal must be in writing, the reason stated clearly and precisely, and for reasons of conduct or performance the employee's defence must be taken (Labour Act, Art. 19).
A dismissal that ignores the procedure leads to reinstatement and compensation. And a dismissal for just cause must be within six working days (Art. 26).
The commonest mistake in small businesses is dismissing orally and never writing down the reason.
Tax and Records
9. Buying without documents. Purchases made without an invoice cannot be deducted and create a risk of false-document allegations. Paying through a bank proves the transaction was real.
Where an allegation of using false or misleading documents arises, the defence rests on payment records and evidence of the movement of goods: delivery notes, transport invoices, weighbridge tickets, stock records.
10. Keeping the books. Commercial books and documents must be kept for the periods the legislation prescribes. Failing to produce them can be treated as concealment under Article 359 of the Tax Procedure Act, with serious consequences.
Under Article 82 of the Commercial Code, commercial books and the other records and documents that must be kept are retained for ten years.
Where the books are lost in a fire or flood, an application must be made to the court for a certificate of loss (Art. 82/7); without it, their absence is construed against you.
The Annual Check
Headings worth reviewing once a year:
- Are your standard contracts current? Do they contain penalty, default, termination and evidence clauses?
- Are overdue debts being monitored for limitation?
- Are contracts of employment in writing, and do the payslips show the real wage?
- What is the scope and duration of the guarantees you have given? A guarantee by a natural person ends automatically after ten years.
- Are your trading name and trade mark registered? Registering a trading name does not give trade mark protection.
- Data protection compliance: privacy notices, registration, and a retention and destruction policy.
- Do your contracts contain an address for service clause?
- Are the commercial books and documents kept for ten years?
The cost of these checks is far below the cost of a single dispute.
Under Article 21 an invoice not objected to within eight days is treated as accepted — but only where you can prove it was properly served. Use e-invoicing, registered electronic mail or recorded delivery. Commercial books and documents must be kept for ten years.
Frequently Asked Questions
Is an oral agreement valid?
Yes, but proving it is the problem. Put the scope, price, timetable, delivery period, penalties, termination and competent court in writing.
Why does the way I send an invoice matter?
Because an invoice not objected to within eight days is treated as accepted — but only if you can prove it was served. Use e-invoicing, registered electronic mail or recorded delivery.
What should I check before accepting a cheque?
The date and place of issue, the signature, the chain of endorsements, and the drawer's cheque report through the QR code enquiry.
What makes a personal guarantee valid?
The maximum amount, the date and the words describing the guarantor as jointly and severally liable must be written in the guarantor's own hand. A guarantee by a natural person also ends automatically after ten years.
How long must I keep the books?
Ten years under Article 82 of the Commercial Code. Failing to produce them can be treated as concealment under the Tax Procedure Act.