By: Att. Ecem Susoy
Introduction
Foundations are defined under Turkish Civil Law No. 4721 ("Civil Law") as a group of properties with legal personalities, established through the allocation of appropriate assets and rights for a certain and constant purpose by real persons or legal entities. Foundations are considered to be legal entities.
The Civil Law, Law on Foundations No. 5737, Regulation on Foundations, Bylaw on the Registration and Announcement of the Foundations that was published in the Official Gazette dated 26.04.2013 and numbered 28269, as well as other relevant legislation, comprises provisions regarding the incorporation of foundations. This article briefly analyzes the establishment steps, management, auditing, purposes and activities, and termination of foundations within the framework of the aforementioned legislation.
Establishment of Foundations
Foundations that are established in accordance with the abrogated Law numbered 743 and Civil Law are considered as new foundations. For new foundations, the will to establish a foundation may be declared either before a notary public through an official deed ("deed") issued in statutory form or by a testamentary disposition.
Real persons or legal entities declare their will to establish a foundation before a notary public through a deed issued in statutory form. Following the issuance of the deed, the founder or the representative of the founder, submits the deed to the authorized civil court of first instance. The foundation to be established by a testamentary disposition may be established by registration following the death of the founder.
The court to which the submission shall be made requests the opinion of the General Directorate of Foundations. Nonetheless, the court may hear the founders, request expert examination, and eventually, decide as to whether or not the foundation shall be registered.
If the court renders a decision regarding refusal of the registration request, the decision of the court may be appealed. On the other hand, if the court renders a decision in favor of registration, the foundation shall be granted legal entity status, and then, it shall be registered with the court that has jurisdiction over the foundation's headquarters, and, as well, with the central registry kept by the General Directorate of Foundations.
The foundation that is registered with the central registry shall be announced in the Official Gazette. The said announcement consists of information, such as the names of the founders, name, headquarters, purpose of the foundation, its managerial bodies, assets and rights devoted thereto, and information regarding the court that will render the registration decision.
The deed is the document that is comprised of information on the assets and conditions of the foundation. The deed includes the name, headquarters and purpose of the foundation, the acts and actions to be performed in order to fulfill the purpose of the foundation, the establishment asset, managerial bodies, management, and termination procedures of the foundation.
