NEWSLETTER-2017

366 NEWSLETTER 2017 be audited by the General Directorate. In the event that foundations operate an economic enterprise to accomplish their objective, this enterprise shall be operated in conformity with the economic and com- mercial principles. With these audits, the balance sheets and financial statements of enterprises shall be examined and the productivity of the enterprise shall be audited. In case the productivity of enterprises is determined in a low degree in these audits, the required measures shall be taken into account 16 . Conclusion Although the foundations are not established with the purpose of deriving a profit, they may operate economic enterprises in order to actualize their objectives pursuant to Art. 101 of the CC and they can obtain income accordingly. In such case, the economic enterprise shall be registered to the Trade Registry in compliance with Art. 55 and 56 of the Trade Registry Regulation. Moreover, an economic enterprise can also be assigned to a foundation during the establishment phase of the latter pursuant to Art. 101/2 of the CC. For the existence of an economic enterprise of a foundation, the conditions required by Art. 11 of the TCC must be available, which are continuity, independence and a aiming for obtaining income. The foundations that operate an economic enterprise meeting the abovementioned requirements shall be deemed as merchant pursuant to Art. 16 of the TCC. It is impor- tant to note that, the foundation that use more than half of its income to the tasks that are qualified as public service are not considered as merchants whether they operate the enterprise directly or through a legal person who is operated and directed according to public law provisions. As per Art. 1 of the Corporation Tax Law, the economic enterprises of foundations are subject to corporation tax. Furthermore, pursuant to Art. 111 of the CC and Art. 33 of the Law of Foundations, the economic enterprises are also subject to audit that is conducted by the General Directorate of Foundations 16 Ballar, Suat, p. 621.