Under Turkish law, an association is a non-profit organization established to carry out a specific or common objective, without the intention of earning or sharing profit by its members.
All associations in Turkey are registered with the Department of Associations under the Republic of Turkey's Ministry of the Interior. The function of the Department of Associations is primarily to make the procedures for creating, registering, and maintaining associations more efficient and cost-effective. To this end, the Information System of Associations ("Derbis") has been initiated by the Department of Associations to enable the directors of associations to submit declarations and notifications on-line without having to physically visit the Provincial Directorates of Associations. Accordingly, all formal/regulatory procedures of associations may be implemented by using e-signature through Derbis. At the time of the writing of this article, further infrastructural enhancements within Derbis were underway.
General Rules for Associations
General rules and principles regarding the establishment, licensing, operation and liabilities of non-profit organizations are generally regulated under the Law on Associations (published in the Official Gazette as Law No: 5253 on November 23, 2004, and numbered 26649) and the Associations Regulation (published in the Official Gazette on May 31, 2005 and numbered 25772). Provisions of the Law on Associations are applicable for all associations in Turkey including branches and representative offices of pre-existing associations domiciled abroad.
Associations are established with a minimum of seven founding members. Real and legal entities with the capacity to take legal actions have the right to establish associations without obtaining any prior permission. However, members of the Turkish Armed Forces, law enforcement and public authorities and institutions are subject to the provisions of special laws with respect to founding or joining associations. Also, adults over 18 cannot become founders or members of what are known as child associations.
The application for the creation of a non-profit association is filed with the Department of Associations within the Ministry of the Interior. Associations are required to have articles of association and their internal management is composed of the general assembly, the board of directors and the board of auditors. Articles of association of an association should include the items that are explicitly set forth in the Law on Associations, as well as any other matters that are particular to that specific organization.
With respect to titles of associations, names such as Türk (Turkish), Türkiye (Turkey), Milli (National), Cumhuriyet (Republic), Atatürk, Mustafa Kemal, and other phrases originated by adding abbreviations at the beginning or the end of such words may only be used with the permission of the Ministry of the Interior.
Activities of Associations
An association may be engaged in local or international activities within the scope of its articles of association, and also may establish or join other associations or institutions abroad. Likewise, foreign associations may also pursue their activities in Turkey through establishing or joining parent institutions, opening branches or representative offices, or cooperating with already established associations in Turkey with the permission of the Ministry of the Interior in consultation with the Ministry of Foreign Affairs.
There are certain restrictions with respect to the scope of the activities of associations. Accordingly, associations may not carry out (i) activities that are not stated in their respective articles of association, (ii) activities that are prohibited by law and the Constitution, and (iii) preparatory educational or training activities for military service, national defense or security services, nor may they open camps or training centers for such purposes. To avoid confusion or misidentification with governmental, police, or military organizations, associations may not use special clothing or uniforms for their members. Moreover, the operation of dormitories and lodging for educational purposes, establishment of clubhouses for members and offering of alcoholic beverages in such clubhouses by associations are further subject to receiving the permission from the local administrative authority.
Internal auditing is an essential element in the management of associations. In this respect, the principle internal body responsible for the audit of associations is the board of auditors. This board is required to monitor the activities of an association to ensure compliance with its objectives and the subject of work carried out for the purpose of achieving such objectives, and to keep all books and records in the appropriate manner. Having said that, the general assembly or the board of directors may also conduct internal audits or hire an independent audit firm for this purpose.
Associations are also allowed to buy or sell real properties upon board decision based on the authority given by their general assemblies. Associations are obliged to declare the real properties they have acquired to the local administrative authority within the month following the registration of title to such real property.
Activities of associations may be conducted by volunteers and/or employed personnel.
Activities of associations are highly regulated and audited, and the Law on Associations includes a number of penalties for non-compliance, as set forth in detail within the law. Accordingly, members or administrators of associations who do not comply with certain provisions of the Law on Associations may be subject to penalties ranging from fines to imprisonment, depending on the severity of non-compliance.
Association Income and Collection of Charitable Donations
Public benefit associations are determined by the Decree of the Council of Ministers upon proposal by the Ministry of the Interior in consultation with other relevant ministries and the Ministry of Finance. Public benefit status is granted to associations which pursue activities yielding socially beneficial outcomes for at least one year. In addition to the receipt of charitable donations in Turkey, associations may receive donations from individuals, institutions, and organizations located abroad provided that prior notification of such contributions is provided to the local administrative authority. Monetary funds may only be received through bank transfers.
Collection of charitable donations by associations is further regulated under the Law on Charity Collection (Law No: 2860 published in the Official Gazette dated December 12, 1999 and numbered 23919). This law provides that associations are allowed to collect charity so long as they submit a petition to the relevant governorship explaining the aim and amount of the charitable collection together with the names of the cities in which donations will be solicited and collected.
An association may establish a fund for the purpose of meeting its members' essential food and clothing needs and providing short-term loans to its members, provided that no profits or any other sort of income is distributed to the members. In order to establish a fund, an association is required to have explicit provisions allowing such a fund in its articles of association and also obtain the approval of the general assembly. All assets of the fund are deemed to be the assets of the association. The Associations Regulation sets forth the types of income funds may receive as follows:
- The one-time membership entry fee;
- Membership fees;
- Profit generated from economic activities;
- Service fees or interest to be obtained from the loans granted to members;
- Interest from the funds deposited in banks;
- Cash, the owner of which is unknown and has been recorded as income after being kept in the escrow account for at least one year;
- Charitable contributions;
- Indebtedness proceeds; and
- Other income not specifically prohibited by law.
The general assembly, board of directors or the board of auditors may always audit its own fund. Furthermore, the board of auditors is authorized to, and responsible for, auditing the accounts and activities of the subject fund at least once a year.
Associations are required to submit a declaration regarding the income and expenses as well as their activities to the local administrative authority by the end of April every year. The basis and procedures on issuance of declarations are further detailed by the Associations Regulation. If it is deemed necessary, the Interior Minister or local administrative authority may inspect an association to determine whether its activities are conducted in line with the objectives stated in their articles of association and whether their records and books are kept in compliance with the relevant laws. If any illegal activities are detected, such finding is notified to the chief public prosecutor's office by the local administrative authority, as well as to the association itself.
The legal framework and structure of associations in Turkey have attracted an increasing amount of interest, both from local organizations as well as large, international organizations. Currently, there are 252,138 associations in Turkey; 100,840 being active and 151,298 being inactive. These figures change every day. The number of foreign associations have also increased as the Turkish laws continue to provide a workable environment for associations with specific eleemosynary purposes or common goals.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.