Chapter 4: Remedies and Monetary Sanctions
Article A: Remedies
352. (a) For the breach of a right conferred under this Law on a shareholder as against the company or as against another shareholder, or on a company as against a shareholder, the laws applying to breach of contract shall apply, mutatis mutandis.
(b) The provisions of this section shall not derogate from the rights of a shareholder under any law.
353. Without derogating from the provisions of any law, the breach of a duty to keep registers or to give notices or reports to the Registrar of Companies owed by a company under this Law or under the Companies Ordinance, shall be considered a breach of statutory duty as against whoever relies on the registers of the company or of the Registrar of Companies.
Breach of duties to keep registers and reporting duties
Article B: Monetary Sanctions
354. (a) Where the Registrar has reasonable grounds for presuming that a private company has done any of the following, he may impose a monetary sanction upon the company in the sum of six thousand new Israeli shekels: breach of the Registrar’s instructions under section 37(b) or (c); breach of the duty to file reports, pursuant to the provisions of section 140; breach of the duty to file an annual report pursuant to the provisions of sections 141 or 348; breach of the duty imposed upon it under the provisions of sections 173(a) or 175; breach of the duty imposed upon it under the provisions of section 343.
(b) Where the Registrar has reasonable grounds for presuming that a public company has infringed a duty imposed upon it under the provisions of section 343, he may impose monetary sanctions as aforesaid in subsection (a) upon it.
(c) Where the Registrar has reasonable grounds for presuming that a company upon which monetary sanctions have been imposed has infringed the same provision for which the monetary sanction was imposed within two years from the date it was imposed, he may impose upon such company double the sanction prescribed in subsection (a); the Registrar may also do so if the company has committed three or more breaches during the said period, even if the sanctions were imposed for breaches of different provisions.
355. (a) The monetary sanction shall be in accordance with the sum updated on the date of demand for payment thereof, and if an appeal is filed and the court hearing the appeal does not rule that it be paid, in accordance with the sum as updated on the date of the ruling on the appeal.
(b) The Registrar may update the sum of the monetary sanctions on 1 January in each year, according to the rate of alteration of the index from the last index published prior to the update compared with the last index published prior to the date of commencement of this Law; the Registrar may also round off the amount of the monetary sanction to the nearest sum that is a product of ten New Israeli Shekels.
(c) The Registrar shall publish the amount of the updated monetary sanction by notice in Reshumot.
Update of monetary sanction
356. (a) A monetary sanction shall be imposed upon a company on the demand of the Registrar made to the company (in this Chapter “a demand”); the Registrar shall set out in the demand the breach referred to in section 354, and shall notify the company that if the breach is not remedied within forty-five days of the date of the demand, the company shall be required to pay the monetary sanction on the date fixed in the demand.
(b) Where the company remedies the breach within the time stipulated in the demand, it shall notify the Registrar thereof.
(c) Where an appeal is filed against the decision of the Registrar as aforesaid in section 359, the monetary sanction shall not be paid unless the court orders otherwise.
Demand for monetary sanction and payment thereof
357. Where a monetary sanction is not paid on time, linkage and interest differentials under the Adjudication of Interest and Linkage Law 196115 (hereinafter “linkage and interest differentials”) shall be added to it for the period of the delay up until the date of payment.
Linkage and interest differentials
358. The Taxes (Collection) Ordinance16 shall apply to the collection of the monetary sanction.
359. (a) The decision of the Registrar under section 354 shall be subject to appeal to the Magistrates’ Court, within thirty days of the date of receipt of the demand.
(b) Where the monetary sanction has been paid and the appeal has been allowed, the monetary sanction shall be refunded together with linkage and interest differentials.
(c) The court’s decision on the appeal is subject to appeal by leave.
360. (a) Where a monetary sanction imposed under section 354 is not paid on time, the Registrar may, subject to the provisions of subsection (e), demand the payment of it by any person registered in the Registrar’s records as a director of such company or who was so registered on the date of the breach.
(b) The provisions of sections 355 to 359 shall apply to a demand under this section.
(c) Where one of the persons designated in subsection (a) has paid the monetary sanction, the company shall not be required to pay it, and the payer shall be entitled to a refund from the company.
(d) The court shall not charge a person required to pay a monetary sanction under this section with the payment thereof if such person proves one of the following: that he took all appropriate steps to prevent the breach; that he did not know of the breach andought not to have known of it.
(e) The company may designate in its annual report that the general manager or a particular director as being responsible for the fulfillment of the provisions and obligations referred to in section 354; where the company so designates, the Registrar shall not require payment of the monetary sanction from any other director of the company, unless the payment of the monetary sanction has already been demanded previously from the general manager or director designated by the company, and has not been paid by them.
Collection from director
361. (a) The provisions of this Article shall not derogate from the power of a prosecutor to file an information for an offense under this Law in respect of which a monetary sanction may be imposed under this Article, for reasons that shall be set out in writing; for these purposes, “prosecutor” – as defined in section 12 of the Criminal Procedure Law (Consolidated Version)), 1982.
(b) Where an information is filed against the infringing party as aforesaid in subsection (a), such person shall not be charged with paying the monetary sanction under this Article, and if such has already been paid, the Registrar shall be ordered to refund it to the infringing party, together with linkage and interest differentials.
Retention of criminal liability
362. The Registrar may request the winding up of a company under Chapter 12 of the Companies Ordinance, if the monetary sanction imposed upon the company under section 354 is not paid by it, and within three years from the date of imposition of the monetary sanction, the Registrar has imposed a further monetary sanction, which was also not paid on time, provided that such have not been paid up to the date of the filing of the application for winding up.
Winding up on the application of the Registrar
363. The Minister may make regulations for the implementation of thisChapter.
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