Israel Companies Law 1999Definitions Chapter 1: Incorporation Article A: Right of Incorporation The right to incorporate One-person company Article B: Legal Personality Legal personality of a company Existence of company Lifting the corporate veil Restriction of employment Article C: Establishment and Registration of a Company Application for registration Fees Certificate of incorporation Article D: Purpose of Company Purpose of company Article E: Acts Performed by a Promoter Approval of act Status of a third party regarding a promotion Lack of awareness of promotion Chapter 2: Articles of Association Article A: Contents of Articles and their Alteration Articles of association of a company Validity of articles of association Articles of association as a contract Details that must be included in the articles of association Details that may be included in the articles of association Amendment of articles of association Validity of alteration and reporting Limitation on altering the articles of association Signature of articles of association Transitional provisions regarding memorandum and articles of association Article B: Name of the Company Choice of name Notation of Ltd. at the end of the name of a company Misleading name Name contrary to public policy Registrar’s authority to order change of name Injunction Change of name Article C: Objects of the Company Notation of purposes of the company in its articles of association Article D: Registered Share Capital and Distribution Thereof Registered share capital Nominal value of shares Article E: Limitation of Liability Limitation of liability Chapter 3: The Registrar of Companies Article A: The Companies Registry Appointment and qualification of Registrar and Deputy Registrar Powers of the Registrar Article B: Keeping of Registers Keeping registers and receipt of documents Submitting documents for registration Validity conditional upon registration Copies as evidence Negation of knowledge Inspection Regulations Article C: Appeal Appeal Chapter 1: Organs of the Company, their Powers and the Liability for their Acts Article A: Organs The organs Acts of an organ like acts of the company Article B: Division of Powers Among Principal Organs Powers of organs Residual power Transfer of power among organs pursuant to articles of association Assuming powers of general manager Organ that is precluded from fulfilling its role Article C: Liability of Company for Acts of Organs Liability of company in tort Article D: Liability of Individuals in an Organ Liability of individuals in an organ Article E: Avoidance of Unauthorized Acts Act departing from authorization Act departing from objects or without authorization Chapter 2: The General Meeting Article A: Powers of the General Meeting Powers conferred on the general meeting Prohibition on stipulation Appointment of directors Article B: Annual General Meeting and Special General Meeting Convening of annual general meeting Non-holding of annual general meeting Convening of annual general meeting by the court Convening of special general meeting Convening of general meeting by shareholders Application to the court Article C: Convening and Direction of General Meeting Agenda Dates of delivery of invitations for private company Contents of invitation to general meeting of a private company Notice of general meeting of public company, and contents thereof Regulations regarding resolutions at general meetings Proof of ownership of shares in a public company Convening meeting by court Meeting in Israel Meeting adjourned by resolution of the meeting Class meeting Article D: General Meeting of a Private Company Resolution without convening Holding of meeting through means of communication Article H: Quorum at General Meeting and Chairman of General Meeting Quorum at general meeting Quorum at adjourned meeting Chairman of general meeting Freedom to contract our Article F: Voting at General Meeting Freedom to vary Manner of voting at meeting Voting by counting Majority at general meeting Declaration as evidence Article G: Voting by Voting Paper and Statement of Position Voting at general meeting by written vote Addressing shareholders Regulations Article H: Minutes of the Meeting Minutes at a general meeting Article I: Defects in Convening Meetings Defects in convening meetings Chapter 3: The Board of Directors Article A: Powers of the Board of Directors Powers and duties of the board of directors Board of directors numbering one person Article B: Chairman of Board of Directors Election of chairman of board of directors Limitation on election of chairman of the board of directors Management of meetings of board of directors Article C: Convening of Meetings of Board of Directors Meetings of board of directors Convening of meetings of the board of directors Article D: Meetings of the Board of Directors and their Direction Agenda Notice of meeting of board of directors Holding of meeting by telecommunication Convening of meeting without notice Passing of resolutions without convening meeting Quorum at meetings of the board of directors Article E: Voting at the Board of Directors Voting at the board of directors Voting agreements Passing of resolutions Article F: Minutes of Meetings of the Board of Directors Minutes of meetings of the board of directors Article G: Defects in Convening Meetings of the Board of Directors Defects in convening meetings Article H: Committees of the Board of Directors Setting up of committees Acts of committees Restriction on delegation of power Abrogation of resolutions of committee Article I: Audit Committee Appointment of committee Members of committee Invitation to meetings Functions of audit committee Audit committee in private company Chapter 4: The General Manager Appointment of general manager Liability of general manager Powers of general manager Duty to report to board of directors Chapter 1: Registered Office Registered office Documents to be kept at the registered office Manner of keeping documents Receipt of copies Chapter 2: Register of Shareholders and Register of Substantial Shareholders Article A: The Registers Register of shareholders Register of substantial shareholders Inspection of registers Article B: Register of Shareholders Contents of register of shareholders Registration of trustee on register of shareholders Nominee company Register of shareholders as evidence Amendment of registration Article C: Registration of Share Warrant Issue of share warrant Cancellation of share warrant Article D: Register of Substantial Shareholders and Additional Register of Shareholders Outside Israel Contents of register of substantial shareholders Additional register of shareholders Regulations Chapter 3: Reporting Article A: Reports of Private Companies Reporting by private companies Annual report by private company Article B: Reporting by Public Company Reporting public company Inspection at the Securities Authority Regulations regarding reporting, filing and fees Reporting by public company to Registrar Chapter 4: Internal Auditor in a Public Company Duty to appoint internal auditor Internal Audit Law Person responsible for internal auditor Work program Urgent examination Role of internal auditor Submitting of reports Ceasing to act Chapter 5: Auditor Article A: Appointment of Auditor Duty to appoint auditor Appointment of first auditor Joint auditors Appointment by special general meeting Inactive companies Appointment by Registrar Article B: Independence Independence of auditor Duty to perform additional audit Article C: Ending of Auditor’s Term of Office Ending term of office Termination of service due to dependence Position of auditor Article D: Fees Payable to Auditor Fees of auditor Prohibition against stipulation of salary or grant of indemnity Fee for additional services Article E: Powers, Duties and Responsibilities of Auditor Powers of auditor Duty to report Responsibility for opinion Chapter 3: Financial Reports Financial reports Preparation of financial reports in a private company Presentation of reports to shareholders Declaration by board of directors Obligation to submit balance sheets Chapter 1: The Shareholder and the Share Certificate Shareholder in private company Shareholder in public company Share certificate Share warrants Text of share certificate and share warrant Forfeiture Determining date for ownership of a share Chapter 2: Rights and Obligations of Shareholders Rights and obligations of shareholder Rights to information Inspection of company documents Information on directors’ remuneration Right to receive articles of association and financial reports Right to vote Permission to conclude agreements Right to dividend Rights in cases of discrimination Shareholders’ duties Duty of interested party and of decisive voting power to act fairly Chapter 3: Derivative and Class actions Article A: Derivative Action and Derivative Defense Preconditions for filing of claim Response of company Company’s response to plaintiff Right to file derivative action Approval of derivative action Fee and costs Costs Reward Arrangement or settlement Derivative defense Prohibited distribution of dividend Company in liquidation Regulations Article B: Representative Action Representative action Notice Funding by Authority Court approval Definition of group Res judicata Arrangement or compromise Advocate’s fees Remuneration to plaintiff Compensation and costs Other relief Regulations Chapter 1: Directors’ Appointment and Term of Office Article A: Term of Office of Director and Termination thereof Number of directors Initial directors Commencement of office Period of office Reporting of changes Directors register Article B: Restrictions on Appointment and Termination of Office Duty of disclosure Restriction on appointment due to conviction Limitation on appointment due to bankruptcy or liquidation Termination of office Resignation of director Dismissal of director Obligation to cease holding office Termination of office due to offense Disqualification pursuant to court ruling Fiduciary duty Article C: Corporation as a Director Corporation as a director Individual acting on behalf of corporation Article D: Substitute Director Substitute director Liability of substitute director Article E: External Director Duty to appoint Qualification for appointment Declaration Initial External Directors Participation in committees Remuneration and refund of expenses Duration of office Termination of office by general meeting Termination of office by court Appointment by special general meeting Prohibition against appointment and employment Chapter 2: Appointment and Dismissal of Other Office Holders Appointment and dismissal of general manager Appointment and dismissal of office holders Chapter 3: Duties of Office Holders Article A: Duty of Care Duty of care Precautions and standard of proficiency Article B: Fiduciary duty Fiduciary duty Approval of acts Remedies Disclosure of defects Article C: Exemption, Indemnification and Insurance Authority of company to grant exemption, indemnification and insurance Authorization to grant exemption Permission regarding indemnity Liability insurance Alteration of articles of association Invalid provisions No contracting out Chapter 4: Rights of Director Right to receive information Right to employ advisers Right to sue Chapter 5: Transactions with Interested Parties Definition of holder of control Duty of disclosure Transactions requiring special approvals Non-extraordinary transactions Extraordinary transactions with office holders Conditions of office and employment Private placement Transaction with holder of control Disclosure of personal interest Cumulative approvals Abstention of directors Audit committee of a public company Invalid transaction. Revocation of transaction Approval by board of directors Remedies Regulations Chapter 1: Securities and Transactions Therein Article A: Freedom to Diversify Freedom to diversify Article B: Registered Share Capital Increasing registered share capital Cancellation of registered share capital Article C: Issue of Securities Authority to issue shares and convertible securities Power to issue debentures Entitlement to participate in future allotments Allotment other than in return for cash Reporting allotments Article D: Transfer of Securities Transferability Limitation on transferability Joint owners Bearer securities Negotiability Purchase on stock exchange Alteration in registration Forced sale Chapter 2: Preservation and Distribution of Capital Article A: Permitted Distribution No contracting out Permitted distribution Distribution with consent of court Allotment of shares at less than nominal value Regulations Article B: Dividend Right to dividend or to bonus shares Resolution on payment of dividend Article C: Purchase Consequences of purchase Purchase by a controlled corporation Article D: Prohibited Distribution Consequences of prohibited distribution Liability of directors for prohibited distribution Article E: Redeemable Securities Redeemable securities Transitional provision Chapter 1: Merger Approvals by a company Merger that prejudices a company’s ability to pay its debts Merger proposal Notice to the Registrar of Companies Notice to creditors Objection bycreditors Approval of merger Confirmation by court Restrictive trade practices Consequences of merger Freedom to impose conditions Floating charge in merging company Regulations regarding merger Transitional provisions concerning merger Chapter 2: Special Tender Offer Purchase of control block or of control Opinion of board of directors Duties of office holders Consent of shareholders Minimum acceptance Consequences of prohibited purchase Consecutive tender offers or mergers Regulations Chapter 3: Forced Sale of Shares Article A: Purchase of Shares of the Minority by Holder of Control in a Public Company Complete tender offer Forced sale Right in the form of assessment Conversion of public company into private company Consequences of prohibited purchase Article B: Power to Purchase the Shares of Opposing Shareholders in a Private Company Power to purchase shares of opposing shareholders in a private company Transitional provisions Chapter 1: Alteration of Class of Corporation A company that has become public or private Alteration inliability ofshareholders Conversion of a cooperative society into a company Chapter 2: Foreign Companies Duty to register foreign company Service on foreign company Annual report Penalties 3: Compromise or Arrangement Authority for compromise or arrangement Change of structure and merger Chapter 4: Remedies and Monetary Sanctions Article A: Remedies Remedies Breach of duties to keep registers and reporting duties Article B: Monetary Sanctions Monetary sanctions Update of monetary sanction Demand for monetary sanction and payment thereof Linkage and interest differentials Collection Appeal Collection from director Retention of criminal liability Winding up on the application of the Registrar Regulations Chapter 5: A Public Company Whose Shares are Traded Outside Israel Limitation on application Duties as to reporting Chapter 6: Regulations Performance and regulations Repeal of Companies Ordinance Transitional provisions regarding application of provisions of standard articles of association Transitional provisions regarding sharesof the company if owned by subsidiary Application to company limited by guarantee Transitional provisions regarding internal auditor Director from the public Amendment of Securities Law – No. 18. Amendment of Securities (Amendment No. 11) Law – No. 5 Amendment of Joint Trust Investments Law – No. 6. Amendment of National Insurance Law – No. 35. “Insured persons who are members or office holders in a corporation Commencement Promulgation | 
