Israel Companies Law
1999
Definitions
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
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