Companies Law, 5759-1999

In this Law —

"bond" means a document issued by a company evidencing the existence of a monetary obligation owed by the company and defining its terms, excluding promissory notes or bills of exchange given by a company in the ordinary course of its business;

"secured bond" means a bond in respect of which the company's obligation thereunder is secured by a pledge over all or some of the company's assets;

"means of control" means any of the following:

"general meeting" means an annual meeting or a special meeting of shareholders;

"special meeting" means a general meeting of shareholders that is not an annual meeting;

"class meeting" means a meeting of holders of a class of shares;

"annual meeting" means a meeting of shareholders pursuant to section 60;

"stock exchange" means a stock exchange in Israel, a stock exchange outside Israel that has received approval from whoever is authorised to grant it under the law of the state in which it operates, and also a regulated market as defined in the Joint Investment Trust Law, 5754-1994;

"stock exchange in Israel" means a stock exchange as defined in the Securities Law;

"bondholder", in a bond company, means a holder of a bond of the company that is listed for trading on a stock exchange or was offered to the public pursuant to a prospectus as defined in the Securities Law or was offered to the public outside Israel pursuant to a public offering document required under the law outside Israel;

"court" — (deleted);

"substantial shareholder" means a person who holds five per cent or more of the issued share capital of the company or of the voting rights therein;

"interested party" means a substantial shareholder, a person who has the authority to appoint one or more directors or the general manager, and a person serving in the company as a director or general manager;

"controlling block" means shares conferring twenty-five per cent or more of all voting rights at the general meeting;

"dividend" means any asset distributed by the company to a shareholder by virtue of that person's right as a shareholder, whether in cash or in any other manner, including a transfer without equivalent consideration, but excluding bonus shares;

"director" means a member of the board of directors of a company;

"independent director" means an external director or a sole person serving as a director who satisfies the conditions set out below, and who has been appointed or classified as such pursuant to the provisions of Chapter I of Part 6:

"external director" has the meaning assigned to it in Part 6, Chapter I, Section E;

"arrears charges" and "shekel interest" have the meanings assigned to them in the Interest and Linkage Law;

"holding" and "acquisition" have the meanings assigned to them in the Securities Law;

"insolvency proceedings" has the meaning assigned to it in the Insolvency and Economic Rehabilitation Law;

"private placement" means an offer to issue securities of a public company that is not a public offering, or an offer by a public company to sell its securities that were acquired by it pursuant to section 308, that is not a public offering;

"material private placement" means a private placement that satisfies the conditions set out in section 270(5);

"tender offer" means an offer to purchase shares, directed to the public of shareholders of a company;

"board committee" means a committee established by the board of directors pursuant to the provisions of section 110;

"stock exchange member" means a person who is a member of a stock exchange in accordance with the rules of the stock exchange as defined in section 46 of the Securities Law;

"company" means a company incorporated pursuant to this Law, pursuant to the Companies Ordinance, the Companies Ordinance 1921, or the Companies Ordinance 1919;

"bond company" means a company whose bonds are listed for trading on a stock exchange or were offered to the public pursuant to a prospectus as defined in the Securities Law, or were offered to the public outside Israel pursuant to a public offering document required under the law outside Israel, and are held by the public;

"subsidiary" has the meaning assigned to it in the Securities Law;

"nominee company" has the meaning assigned to it in the Securities Law;

"public benefit company" has the meaning assigned to it in Chapter I-A of Part 9;

"government company" and "government subsidiary" have the meanings assigned to them in the Government Companies Law, 5735-1975;

"merging company" means a target company and an absorbing company;

"private company" means a company that is not a public company;

"public company" means a company whose shares are listed for trading on a stock exchange or were offered to the public pursuant to a prospectus as defined in the Securities Law, or were offered to the public outside Israel pursuant to a public offering document required under the law outside Israel, and are held by the public;

"absorbing company" means a company to which all the assets and liabilities of the target company pass in a merger;

"affiliated company" has the meaning assigned to it in the Securities Law;

"foreign company" means a corporation, other than a partnership, incorporated outside Israel;

"target company" means one or more companies that are to merge with an absorbing company in a manner that results in the dissolution of the company;

"offeree company" means a company whose shareholders a tender offer is directed to;

"Trust Law" means the Trust Law, 5739-1979;

"Associations Law" means the Associations Law, 5740-1980;

"Insolvency and Economic Rehabilitation Law" means the Insolvency and Economic Rehabilitation Law, 5778-2018;

"Securities Law" means the Securities Law, 5728-1968;

"Interest and Linkage Law" means the Interest and Linkage Law, 5721-1961;

"Digital Communication with Public Bodies Law" means the Digital Communication with Public Bodies Law, 5778-2018;

"distribution" means the payment of a dividend or an undertaking to pay one, directly or indirectly, and also an acquisition; and for this purpose, "acquisition" means the acquisition or financing of an acquisition, directly or indirectly, by a company or by its subsidiary or by another corporation under its control, of shares of the company or of securities convertible into shares of the company or realisable as shares of the company, or the redemption of redeemable securities that form part of the equity of the company in accordance with section 312(d), including an undertaking to do any of the foregoing, all provided that the seller is not the company itself or another corporation wholly owned by the company;

"incorporation date" means the date determined by the Registrar as the incorporation date of the company in the certificate of incorporation;

"promoter" means a person who performs an act in the name of or on behalf of a company that has not yet been incorporated;

"index" means the consumer price index published by the Central Bureau of Statistics;

"merger", for the purposes of Part 8, means the transfer of all the assets and liabilities, including contingent, future, known and unknown liabilities, of a target company to an absorbing company, as a result of which the target company is dissolved, in accordance with section 323;

"share" means a bundle of rights in a company as determined by law and by the articles of association;

"bonus shares" means shares allotted by the company without consideration to the shareholders entitled thereto;

"count of votes" means the count of the votes of those voting, in accordance with the voting rights attached to the shares by virtue of which the shareholders participating in the meeting vote;

"identity number" —

"address" —

"digital address" means any of the particulars listed in the Fourth Schedule;

"retirement grant" means a grant, payment, remuneration, compensation or any other benefit given to an office holder in connection with the termination of that person's position in the company;

"offeror", in a tender offer, means a person who makes a tender offer;

"pledge" has the meaning assigned to it in the Pledge Law, 5727-1967, and includes a floating charge;

"shareholder presence", at a general meeting, means the presence of the shareholder in person or through a proxy, or through a voting instrument as referred to in section 87;

"office holder" means a general manager, chief executive officer, deputy general manager, vice general manager, any person filling such a position in the company even if bearing a different title, and also a director, or a manager directly subordinate to the general manager;

"security" includes a share, a bond, or rights to purchase, convert or sell any of the foregoing;

"offeree", in a tender offer, means the shareholder whose shares are proposed to be purchased in a tender offer;

"series of bonds" means two or more bonds of equal rank with respect to the monetary obligation and the security for its payment;

"personal interest" means a personal interest of a person in an act or transaction of a company, including a personal interest of that person's relative and of another corporation in which that person or that person's relative is an interested party, but excluding a personal interest arising solely from the holding of shares in the company, including a personal interest of a person voting pursuant to a power of attorney given to that person by another person even if that other person has no personal interest, and a vote cast by a person who has received a power of attorney to vote on behalf of a person who has a personal interest shall be regarded as a vote by the holder of the personal interest, all whether or not the discretion in voting rests with the voter;

"transaction" means a contract or engagement and also a unilateral decision of a company regarding the grant of a right or other benefit;

"extraordinary transaction" means a transaction that is not in the ordinary course of business of the company, a transaction that is not on market terms, or a transaction that is likely to have a material effect on the profitability, assets or liabilities of the company;

"act" means a legal act, whether by commission or omission;

"material act" means an act that is likely to have a material effect on the profitability, assets or liabilities of the company;

"Companies Ordinance" means the Companies Ordinance [New Version], 5743-1983;

"premium" means the amount by which the consideration for the allotment of shares of the company exceeds the par value of the shares;

"order to commence proceedings" means an order to commence proceedings issued pursuant to the Insolvency and Economic Rehabilitation Law;

"relative" means a spouse, brother or sister, parent, grandparent, descendant, and also a descendant, brother, sister or parent of a spouse, or the spouse of any of the foregoing;

"auditor" means an accountant appointed for the purpose of performing an audit as referred to in section 154;

"Securities Authority" means the Authority as defined in the Securities Law;

"Registrar of Endowments" and "public endowment" have the meanings assigned to them in the Trust Law;

"Registrar of Companies", "the Registrar" means the Registrar of Companies as referred to in section 36;

"share warrant" — (deleted)

"floating charge" has the meaning assigned to it in the Companies Ordinance;

"control" has the meaning assigned to it in the Securities Law;

"reporting corporation" means a reporting corporation as defined in the Securities Law or a corporation to which the provisions of Chapter V-C of that Law apply;

"derivative action" means a legal action brought by a plaintiff on behalf of a company in respect of a cause of action belonging to it;

"memorandum" has the meaning assigned to it in the Companies Ordinance as worded immediately before the commencement of this Law;

"terms of office and employment", of an office holder, means the terms of office or employment of an office holder, including the grant of an exemption, insurance, an undertaking to indemnify or indemnification pursuant to an indemnification permit, a retirement grant, and any benefit, other payment or undertaking to make a payment as aforesaid, given in connection with office or employment as aforesaid;

"certificate of incorporation" means a certificate bearing the signature of the Registrar attesting to the registration of a company;

"share certificate" means a certificate stating the name of the registered owner in the registers of the company, specifying the number of shares owned by that person;

"articles of association" means the articles of association of a company as filed with the Registrar upon its initial incorporation or as amended in accordance with law;

"the Minister" means the Minister of Justice.

Any person may incorporate a company, provided that none of the company's objects is contrary to law, immoral or contrary to public policy.

A company may have a single shareholder.

A company is a legal person with capacity for any right, duty and act consistent with its character and nature as a corporate body.

The existence of a company runs from the date of incorporation stated in the certificate of incorporation until the dissolution of the incorporation as a result of the winding up of the company.

provided that the shareholder was aware of such use, and having regard to that person's holdings and fulfilment of duties towards the company under sections 192 and 193 and having regard to the company's ability to repay its debts.