Israeli Legislation.com
LawCivil LawCorporate & Business

Companies Law, 5759-1999

חוק החברות, תשנ"ט-1999

Published: 1999-05-27Consolidated Hebrew text as of 2026-03-17 · Last amended 2024-09-15✓ Amendment status checked against the Knesset legislation record on 2026-09-28
Premium
Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Chapter III: Compulsory Sale of Shares

Section A: Acquisition of Minority Shares by the Controlling Shareholder of a Public Company

Full Tender Offer§
336.
(a)A person shall not acquire shares of a public company or voting rights in such a company (in this Chapter — shares) or a class of shares of a public company such that, after the acquisition, that person would hold more than ninety per cent of the shares of the public company or of the class of shares, except by way of a tender offer for all the shares or for the class of shares (hereinafter — full tender offer), which shall be accepted in accordance with the provisions of this Chapter.
(b)Where a person holds shares in a proportion exceeding ninety per cent of all the shares of the public company as referred to in subsection (a) or of a class of shares, that person shall not acquire additional shares for as long as that person holds shares in such proportion.
(c)Notwithstanding the provisions of subsection (b), where on the 25th of Shvat 5760 (1 February 2000) a person held shares in a proportion as referred to in subsection (b), under the law in force on the eve of that date, that person shall not acquire additional shares except by way of a full tender offer that has been accepted by the offerees, in such manner that the proportion of offerees who did not accept the offer constitutes less than half of the issued share capital, or of the issued capital of the class of shares in respect of which the offer was made; where a full tender offer has been accepted as referred to in this subsection, all the shares that the offeror sought to acquire shall pass into the offeror's ownership and the records of share ownership shall be amended accordingly.
Compulsory Sale§
337.
(a)Where a full tender offer has been accepted by the offerees, such that the proportion of holdings of offerees who did not accept the offer constitutes less than five per cent of the issued share capital or of the issued capital of the class of shares in respect of which the offer was made, and more than half of the offerees who have no personal interest in accepting the offer have accepted it, all the shares that the offeror sought to acquire shall pass into the offeror's ownership and the records of share ownership shall be amended accordingly; the provisions of section 276 shall apply, with the necessary modifications, to a person who has a personal interest.
(a1)Notwithstanding the provisions of subsection (a), a full tender offer shall be accepted if the proportion of holdings of offerees who did not accept the offer constitutes less than two per cent of the issued share capital or of the issued capital of the class of shares in respect of which the offer was made.
(b)Where a full tender offer has not been accepted as referred to in subsection (a) or (a1), the offeror shall not acquire, from offerees who accepted the offer, shares that would confer upon the offeror a holding of more than ninety per cent of all the shares in the company or of all the shares of the class in respect of which the offer was made.
Appraisal Remedy§
338.
(a)The court may, upon application by any person who was an offeree in a full tender offer that was accepted as referred to in sections 336(c) and 337(a) or (a1), determine that the consideration for the shares was less than their fair value, and that the fair value, as determined by the court, is to be paid.
(b)An application as referred to in subsection (a) shall be submitted no later than six months from the date of acceptance of the full tender offer.
(c)The offeror may stipulate in the terms of the full tender offer that an offeree who accepted the full tender offer that was accepted as referred to in section 337(a) or (a1) shall not be entitled to a remedy under this section.
(d)A stipulation by an offeror under subsection (c) shall have no effect if the offeror or the company did not publish, before the date of acceptance of the offer, the information required to be published under any law in connection with the full tender offer.
Tender Offer for Securities§
338a.

Where a full tender offer has been accepted in accordance with the provisions of this Section, and the offeror also made an offer to acquire all the securities of that public company, the provisions of sections 337 and 338 shall apply, with the necessary modifications, in respect of each class of security, also to the tender offer for those securities.

Conversion of a Public Company into a Private Company§
339.

Where a full tender offer has been accepted in accordance with the provisions of this Section, and the offer was for the only class of shares of the company or for each of the classes of shares of the company held by the public, the company shall become a private company.

Consequences of Prohibited Acquisition§
340.
(a)Shares acquired in contravention of the provisions of this Chapter shall not confer any rights and shall be dormant shares, within their meaning in section 308, for as long as they are held by the acquirer.
(b)A breach of the provisions of this Chapter constitutes a breach of a statutory duty towards the shareholders of the company.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Section B: Power to Acquire Shares of Dissenting Shareholders in a Private Company

Power to Acquire Shares of Dissenting Shareholders in a Private Company§
341.
(a)Where a person has offered to acquire shares or a class of shares of a private company (in this Section — the offeror), and shareholders holding eighty per cent of the shares subject to transfer have agreed to the offer within two months, the offeror may, within one month after the expiry of those two months, give notice, in the manner prescribed by the Minister, to every shareholder who did not agree to the offer (in this Section — a dissenting shareholder), that the offeror wishes to acquire that shareholder's shares; in counting the said shareholders, a controlling shareholder of the offeror, or a person acting on behalf of the controlling shareholder or of the offeror, including their relatives or corporations under their control, shall not be taken into account.
(b)Where the offeror has given notice as referred to in subsection (a), the dissenting shareholders are obliged to sell their shares and the offeror is obliged to acquire them, on the terms offered to the shareholders who agreed to the transfer, unless the court has decided otherwise upon application by a dissenting shareholder submitted within one month from the date of the notice.
(c)Where the offeror has given notice as referred to in subsection (a) and no contrary decision of the court has been given, the offeror shall, upon the expiry of one month from the date of the notice — or, if at that time an application by a dissenting shareholder was pending before the court, after the court has ruled on it — send a copy of the notice to the company and transfer to it the consideration for the shares that the offeror is obliged to acquire under this section, and the company shall register the offeror as the holder of those shares.
(d)A different proportion from that prescribed in subsection (a) may be prescribed in the articles of association of the company; a resolution to amend the articles of association as aforesaid shall be adopted as referred to in section 20.
Transitional Provision§
342.

In relation to a company incorporated before the commencement of this Law, it shall be deemed as if a provision had been prescribed in its articles of association to the effect that approval of an offer as referred to in section 341 requires a majority of shareholders holding ninety per cent of the shares subject to transfer; however, a resolution to amend the articles of association in a manner that reduces the said majority proportion shall be adopted in the manner prescribed pursuant to section 350 or with the consent of all the shareholders of the company.

Regulations§
342a.

The Minister, after consulting with the Securities Authority, may prescribe provisions for the implementation of this Chapter, including with respect to the ways of delivering a full tender offer to offerees and receiving their notices, and in that connection may apply the provisions applicable to voting documents, and may also prescribe the timetables according to which a full tender offer shall be conducted.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Part 8-A: Winding Up

Chapter I: General Provisions

Definitions — Part 8-A§

342b.

In this Part —

"special resolution" means a resolution adopted at a general meeting by a majority of three-quarters of the votes of the shareholders participating in the vote, in respect of which all of the following conditions are met:

(1)the notice of the meeting was given to the shareholders at least 21 days before the date of its convening, or with the consent of all the shareholders — at a date closer to the convening;
(2)a proposal concerning the winding up of the company under this Part was included on the agenda of the general meeting;

"debt" means a certain or contingent liability, liquidated or unliquidated, whether or not the time for payment has arrived;

"insolvency" has the meaning assigned to it in section 2 of the Insolvency and Economic Rehabilitation Law;

"the Insolvency and Economic Rehabilitation Administrator" means the Administrator as defined in the Insolvency and Economic Rehabilitation Law.

Methods of Winding Up§

342c.

The winding up of a company under the provisions of this Part may be effected in one of the following ways:

(1)winding up by the court;
(2)voluntary winding up.

Relationship between Winding-Up Proceedings and Insolvency Proceedings§

342d.
(a)Where insolvency proceedings are being conducted in respect of a company, winding-up proceedings under this Part shall not be commenced in respect of it.
(b)Where the winding up of a company by the court has commenced under Chapter II, and the court finds that the company is insolvent, the court may order the cessation of the winding-up proceedings and the continuation of proceedings under the Insolvency and Economic Rehabilitation Law, in such manner as it shall direct.
(c)Where the voluntary winding up of a company has commenced under Chapter III, and the trustee finds that the company is insolvent, the trustee shall notify the shareholders and creditors of the company thereof, and if the conditions for submitting an application for an order to open proceedings under the Insolvency and Economic Rehabilitation Law are met — shall submit, on behalf of the company, an application for an order to open proceedings.
(d)Nothing in winding-up proceedings of a company under this Part shall derogate from the possibility of opening insolvency proceedings in respect of it; where insolvency proceedings have been opened in respect of a company after proceedings for its winding up have been opened under this Part, the court shall order the termination of the winding-up proceedings and the continuation of the insolvency proceedings, in such manner as it shall direct.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Chapter II: Winding Up by the Court

Competent Court§

342e.

The court competent to wind up a company shall be the District Court within whose jurisdiction the company is registered or in which its principal place of business or its assets are located.

Grounds for Winding Up by the Court§

342f.

The winding up of a company by the court under this Chapter may be effected on one of the following grounds:

(1)the company has adopted a special resolution for its winding up by the court;
(2)the company has not commenced its business within one year after its registration, or has ceased its business for a period of one year;
(3)the court has found that it is just and equitable that the company be wound up.

Those Entitled to Apply for Winding Up§

342g.
(a)The following may submit to the court an application for a winding-up order for a company under this Chapter (in this Chapter — a winding-up order):
(1)the company;
(2)a shareholder.
(b)The Attorney General may submit to the court an application for a winding-up order if the Attorney General is of the opinion that it is just and equitable that the company be wound up.

Application for a Winding-Up Order§

342h.
(a)An application for a winding-up order shall be submitted to the court in the manner prescribed by the Minister and shall include the particulars prescribed by the Minister, including, inter alia, particulars regarding the company's assets, its debts, and pending legal proceedings to which the company is a party.
(b)The applicant shall attach to an application for a winding-up order an affidavit verifying the facts upon which the application is based; the Minister may prescribe additional documents that the applicant must attach to the application for the purpose of proving the conditions for its submission.

Publication of notice of submission of application and dispatch of a copy thereof§

342i.
(a)A person submitting an application for a winding-up order shall publish a notice to the public of the submission of the application, in the manner and at the time prescribed by the Minister; such publication shall include information regarding the date of the hearing on the application and the final date for submitting objections to the application.
(b)Where an application for a winding-up order has been submitted otherwise than by the company, the applicant shall send a copy thereof to the company immediately after its submission.
(c)Any person who may be harmed by the making of a winding-up order is entitled to receive from the applicant a copy of the application for a winding-up order.

Submission of objection to the application§

342j.
(a)A person who may be harmed by the making of a winding-up order may submit to the court an objection to the application for a winding-up order.
(b)The Minister shall prescribe provisions regarding the submission of the objection, including provisions regarding the particulars to be included therein, the time for its submission and the manner of its service.

Decision on application for a winding-up order§

342k.

Where the court has found that a ground for winding up the company exists pursuant to section 342f, it may make a winding-up order in respect of the company.

Consequences of the winding-up order§

342l.

Upon the making of the winding-up order —

(1)the court shall appoint a trustee to implement the winding-up proceedings in accordance with the provisions of section 342n;
(2)proceedings against the company shall be stayed as provided in section 29(1) and (3) to (5) of the Insolvency and Economic Rehabilitation Law, unless the court has ordered otherwise in respect of all or some of the proceedings; the provisions of sections 31(a) and 32 of the Insolvency and Economic Rehabilitation Law shall apply, with the necessary modifications, in respect of a stay of proceedings under this paragraph; nothing in the provisions of this paragraph shall operate to delay the realisation of an asset subject to a fixed charge and the crystallisation of a floating charge made to secure repayment of the company's debts before the making of the winding-up order, or to delay the transfer of possession of an asset subject to a retention of title from the company to the owner of the asset.

Notice of the making of a winding-up order to the Registrar and publication of notice to the public§

342m.
(a)Immediately upon the making of the winding-up order, the trustee shall send a copy thereof to the Registrar, and the Registrar shall record a note to that effect.
(b)Notice of the making of the winding-up order shall be published to the public in the manner and at the time prescribed by the Minister, and the court may order that notice of the making of the order be served on such parties as it directs and in such manner as it directs.

The trustee — appointment, functions and powers in a winding up by the court§

342n.
(a)The provisions of Section A of Chapter VI of Part B of the Insolvency and Economic Rehabilitation Law shall apply to the appointment of the trustee by the court, subject to the following modifications:
(1)the court may appoint a trustee who is not on the list of trustees compiled pursuant to section 37 of that Law, if it has found that this is justified in the circumstances of the matter;
(2)the company and a shareholder, and also the Attorney General if the latter submitted the application for a winding-up order, may propose candidates for the position of trustee;
(3)the trustee's remuneration shall be determined in accordance with the provisions made pursuant to section 39 of that Law, with the necessary modifications; however, the Minister may prescribe special provisions regarding the remuneration of a trustee appointed pursuant to this Chapter;
(4)the Official Receiver shall publish, on an ongoing basis on his internet website, the names of the trustees appointed by the court pursuant to this Chapter.
(b)The trustee shall act as expeditiously as possible to complete the winding-up proceedings of the company in accordance with the provisions of this Chapter, including —
(1)adjudicating on proofs of debt;
(2)acting to collect and manage the assets of the winding-up fund;
(3)paying the company's debts and acting to distribute the remainder among the shareholders.
(c)Where a trustee has been appointed pursuant to this section, the provisions of Section B of Chapter VI of Part B of the Insolvency and Economic Rehabilitation Law that apply in respect of a corporation in relation to which an order opening proceedings directing its winding up has been made shall apply, with the necessary modifications.
(d)Where the trustee has found, in the course of the winding-up proceedings, that the company is insolvent, the trustee shall notify the court accordingly and shall act in accordance with its directions, as provided in section 342d(b).

Application of provisions regarding winding-up proceedings by the court§

342o.

The following provisions of the Insolvency and Economic Rehabilitation Law shall apply to winding-up proceedings by the court pursuant to this Chapter, with the necessary modifications, as set out below:

(1)the provisions of Chapter A of Part D of that Law, as well as regulations made pursuant to that Chapter, shall apply in respect of proofs of debt and their approval, unless otherwise prescribed in respect of this matter in regulations made pursuant to the proviso to section 342bb(1);
(2)the provisions of sections 216(1) and 218 of that Law shall apply in respect of the inclusion of assets in the winding-up fund;
(3)the collection and management of the company's assets by the trustee shall be carried out pursuant to Chapter C of Part D of that Law;
(4)the realisation of the company's assets by the trustee shall be carried out pursuant to section 227 of that Law.

Payment of winding-up expenses and the company's debts to creditors§

342p.
(a)After completion of the collection of all the company's assets and the realisation of such assets as the trustee considers should be realised, the trustee shall pay all of the following:
(1)expenses incurred in respect of the trustee's actions or those of persons acting on the trustee's behalf within the framework of the winding-up proceedings, including fees and the trustee's remuneration;
(2)the company's debts to creditors whose proofs of debt submitted have been approved by the trustee.
(b)Before paying the company's debts to creditors, the trustee shall publish notice of the trustee's intention to do so in the manner prescribed by the Minister and shall notify all those who have submitted proofs of debt that have not yet been adjudicated upon and who have not substantiated their claims to the trustee's satisfaction, of the trustee's intention to pay the company's debts, and shall allow them a period of time to substantiate their claims.

Shareholders' right to the remainder§

342q.

Assets remaining after payment of the expenses of the winding-up proceedings and the company's debts to creditors as provided in section 342p shall be distributed among the shareholders of the company in accordance with their rights in the company.

Interim payments§

342r.
(a)Notwithstanding the provisions of sections 342p and 342q, the trustee, with the approval of the court, may pay monies that have accumulated in the winding-up fund to creditors or to shareholders even before the collection of all the company's assets and the realisation of such assets as the trustee considers should be realised have been completed, if the trustee considers that this will not prejudice the proper conduct of the winding-up proceedings.
(b)The provisions of sections 239 and 241 of the Insolvency and Economic Rehabilitation Law shall apply to interim payments pursuant to subsection (a), with the necessary modifications.

Right to apply to the court§

342s.

A shareholder or creditor may apply to the court with a request that it determine any question concerning that person's rights in the winding-up proceedings.

Powers of the court§

342t.

In winding-up proceedings pursuant to this Chapter, the court shall have all the powers vested in the court pursuant to sections 279, 281 to 285 and 289 to 292 of the Insolvency and Economic Rehabilitation Law, with the necessary modifications.

Joinder of the Official Receiver to the winding-up proceedings§

342u.

The court may order that the Official Receiver be joined to winding-up proceedings pursuant to this Chapter, if it considers that this is necessary for the purpose of safeguarding the public interest and the regularity of the proceedings; where the court has so ordered, the Official Receiver shall have the powers vested in the Official Receiver pursuant to Part VI of the Insolvency and Economic Rehabilitation Law, with the necessary modifications.

Cancellation of a winding-up order§

342v.
(a)The court may, at any time after the making of a winding-up order, on the application of the company or a shareholder, order the cancellation of the winding-up order, if it has found that there is no justification in the circumstances of the matter for continuing with the winding-up proceedings of the company.
(b)The court may defer the cancellation of the winding-up order in order to permit the re-imposition of attachments that were cancelled upon the making of the order pursuant to section 342l(2).
(c)The cancellation of a winding-up order does not affect the validity of any sale, transfer, payment or other legal act carried out lawfully before the cancellation.
(d)Where the court has decided to cancel the winding-up order, the trustee shall send to the Registrar a copy of the decision, and the Registrar shall delete the registration of the winding-up order.

Conclusion of the winding up, dissolution of the company and termination of the trustee's tenure§

342w.
(a)Upon the trustee's completion of the performance of the trustee's functions, the trustee shall submit to the court and to the shareholders a summary report of the trustee's activities.
(b)Where the court is satisfied that the winding up of the company has been completed, it shall, by order, direct its dissolution; from the date of the making of the order the company shall be dissolved.
(c)The court shall direct how the company's documents listed in section 124 and the trustee's documents are to be dealt with after the dissolution of the company, provided that they shall be preserved for a period of not less than seven years.
(d)Immediately upon the making of the dissolution order, the trustee shall send a copy thereof to the Registrar, and the Registrar shall register the dissolution.
(e)Where the court is satisfied that the dissolution has been registered by the Registrar, it shall order the termination of the trustee's tenure.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →
← 1…141516…23 →

Page 15 of 23

Read the entire law on one page — continuous text, no page breaks, plus PDF downloads.