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Chapter 4: Remedies and Monetary Sanctions
Article A: Remedies
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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.
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Remedies |
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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.
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Breach of duties to keep registers and
reporting duties
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Article B: Monetary Sanctions
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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.
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Monetary sanctions
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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.
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Update of monetary sanction
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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.
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Demand for monetary sanction and payment
thereof
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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.
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Linkage and interest differentials
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358. The Taxes
(Collection) Ordinance16
shall apply to the collection of the monetary sanction.
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Collection |
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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.
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Appeal |
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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.
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Collection from director
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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.
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Retention of criminal liability
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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.
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Winding up on the application of the Registrar
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363. The
Minister may make regulations for the implementation of thisChapter.
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Regulations |
Chapter
5: A Public Company
Whose Shares are Traded Outside Israel >>
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