NEWSLETTER-2017

361 MISCELLANEOUS Operation of Economic Enterprises by Foundations* Att. Piraye Erdem Introduction Pursuant to Art. 101 of the Turkish Civil Code (“CC”) No. 4721, foundations are an ensemble of assets that have legal personality, which comprises of sufficient assets and rights that are allocated by real and legal persons for a determined and perpetual objective. Foun- dations are legal persons that have “ideal objective”. In other words, the foundations do not have a purpose to derive a profit 1 . However, as stated inArt. 26 of the Law of Foundations No. 5737, foundations may establish economic enterprises and become a partner of an established company in order to accomplish their objectives and provide income to the foundation. In this regard this article succinctly elaborates the principles regarding the operation of economic enterprises by founda- tions and its legal consequences. Situations in which Foundations Manage Economic Enterprises The fact that foundations are legal persons with ideal objective doesn’t pose an obstacle for them to operate an economic enterprise in order to actualize their objective 2 . It is particularly worthy of note the fact that, foundations’ operating economic enterprises does not open the way for establishing foundations based on economic objectives. Although there is not any explicit provision regarding this matter in the relevant codes, it is stated in the doctrine that establishment of * Article of November 2017 1 Dural, Mustafa; Öğüz, Tufan, Türk Özel Hukuku Kişiler Hukuku V. II, İstanbul 2013, p. 359. 2 Demir, İlhan, Yeni Vakıfların Temel Kitabı, Ankara 2005, p. 77.