What Is a Foundation ?

According to Article 101 of the Turkish Civil Code, a foundation is:
“A legal entity formed by real or legal persons who allocate sufficient assets and rights to a specific and continuous purpose.”
A foundation is a non-profit legal entity established to serve a designated social, cultural, educational, or humanitarian objective and is based on an asset dedicated solely to that purpose.

2. How Is a Foundation Established?
The main steps for establishing a foundation in Turkey are as follows:

1. Drafting the Foundation Charter (Deed of Trust)
The foundation’s charter must clearly state:

• Its purpose
• Governing bodies
• Initial assets
• Scope of activities
• Conditions for termination

Article 102 of the Turkish Civil Code:
“A foundation is established through an official deed or a testamentary disposition.”

2. Application to the General Directorate of Foundations
The foundation charter prepared by the founder(s) must be submitted to the General Directorate of Foundations to initiate the registration process. Registration is mandatory for the foundation to acquire legal personality.

3. Registration and Legal Entity Status
The foundation attains legal personality upon its registration by court decision. During this process, the court reviews the foundation charter for compliance with legal requirements.

3. Fields of Activity for Foundations
Foundations typically operate in the following areas:

• Education (schools, scholarships, dormitories)
• Healthcare (hospitals, clinics)
• Culture and Arts (libraries, museums)
• Social Aid (humanitarian and poverty relief)
• Scientific Research

However, all activities must remain within the scope defined in the foundation charter. Otherwise, as a result of audits, the foundation’s operations may be restricted or terminated.

4. Governance and Representation of Foundations
Foundations are managed by a board of directors as stipulated in the foundation charter.
The board is responsible for:

• Safeguarding the foundation’s assets
• Maintaining financial balance
• Ensuring the fulfillment of the foundation’s purpose

Article 113 of the Civil Code:
“The management of the foundation is carried out by a governing body formed in accordance with the procedure set out in the foundation charter.”

5. Supervision of Foundations
Foundations are supervised by the General Directorate of Foundations. The audit typically includes:

• Financial records (balance sheets, income and expense statements)
• Compliance of activities with the charter
• Procedures for donations and expenditures
• Acquisition of immovable properties

Foundations that act unlawfully or operate outside their designated purpose may face dissolution lawsuits.

Article 115 of the Civil Code:
“If the foundation’s objective becomes unlawful or immoral, or its realization becomes impossible, the court shall decide on the dissolution of the foundation.”

6. Distinction Between New and Mazbut Foundations

• New Foundations: Foundations established by real or legal persons after 2002.
• Mazbut Foundations: Historical foundations originating from the Ottoman era, managed by the General Directorate of Foundations. The assets of these foundations are used for public benefit.

7. Legal Support: Minimizing Legal Risks
Establishing and managing a foundation is not a routine task.
Errors in drafting the foundation deed or internal regulations may lead to the invalidation of the foundation or legal proceedings.

At Türeli & Ceylan Attorney-at-Law, we offer comprehensive services for individuals and institutions aiming to establish a foundation:

• Drafting foundation deeds and internal regulations
• Managing registration and all official procedures
• Legal consultancy for foundation boards
• Pre-audit preparation and risk analysis
• Ensuring compliance with the legal framework
• Legal review of immovable property acquisitions and donation processes

Conclusion: A Strong Legal Foundation Ensures a Strong Future
Foundations are essential structures that deliver long-term societal benefit. However, without a solid legal foundation, their continuity is at risk.
Professional legal assistance from the outset can make a lasting difference.

If you are considering establishing a foundation, restructuring an existing one, or preparing for an audit, feel free to contact us for expert legal support.