Starting a software company — how does choosing a NACE code affect partnership and invoicing?

Here is how the process works: You write the purpose and scope clause broadly when drafting the articles of association. Your primary NACE code is determined at trade registry registration and after the company is formed you can easily have 3-4 different secondary NACE codes added to the system by submitting a petition via the interactive tax office.

Go with 62.01 as recommended by your CPA and add 62.02 alongside it as a secondary code. There's zero issue with writing "Software Consulting Service Fee" in the invoice description line. Besides, 62.01 is already the most reputable code for technoparks.

When we founded the company two years ago, we went with a consulting-heavy code. Last year, when we applied for the KOSGEB advanced entrepreneur grant, our application got rejected because our code wasn't considered software manufacturing. Revising the code to 62.01 and updating it in the trade registry gazette cost us 3 weeks and 4.500 TL.

Do you already have a concrete R&D project ready for the technopark application? Technoparks don't just look at the NACE code; they look at whether the work invoiced by the company is genuine in-house R&D activity and what the licensing revenue looks like.

our main code is 62.01 with design and consulting as secondary codes. been invoicing for all sorts of things for three years now without any issues. the key is having software, design, and consulting explicitly mentioned in your articles of association.

Accountants usually just pick one code and move on because they don't want to bother adding secondary codes. Down the road, when you invoice corporate clients or bid on public tenders, they'll check your activity certificate for the relevant NACE code; so be persistent about getting them added from the start.

Since issuing invoices in an area not specified in your company's articles of association could trigger scrutiny under the Turkish Commercial Code and the Tax Procedure Law, listing all business activities exhaustively during formation will provide legal safeguard.

Best of luck with your partnership. 62.01 is a solid starting point. Make sure to tell your CPA during the setup phase that you want the secondary codes registered right away, so you won't have to deal with petitions later. Wishing you all the best.

I partly agree, partly disagree. When making decisions, write down the worst-case scenario too, not just the best.

This is my opinion, I'm not claiming it's absolute truth.

i was thinking the same thing and i mean when we decide without measuring, we allways end up in the same place.

valuation methods for exits must be defined by formula; "market value" isn't enough then just leaving this note it might be useful.

let me summarize the topic since several different answers were given. any unwritten clause becomes a point of disagreement later as both sides remember it differently.

if you have questions, write them; I'll answer as best I can.

Absolutely. If I were to add anything: The answer varies greatly by industry; there is no one-size-fits-all rule.

Proven by experience.

Generally correct, but one part is missing. If you get three different answers on a topic, the question was asked wrong.

Exactly, and not many people know this. Valuation methods for exits must be defined by formula; "market value" isn't enough.

Proven by experience.

i'd appreciate it if you shared the outcome.

Exactly like that. When making decisions, write down the worst-case scenario too, not just the best.

the answer above hits the nail on the head and trying to do this alone is the most expensive way.

good luck with that.

You're right, I've been down that road too. honestly the harder it is to reverse a decision the slower you should make it.

Proven by experience.