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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
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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 II: Register of Shareholders and Register of Substantial Shareholders

Section A: The Registers

Register of Shareholders§
127.

A company shall maintain a register of shareholders.

Register of Substantial Shareholders§
128.

A public company shall have a register of substantial shareholders in addition to the register of shareholders.

Inspection of Registers§
129.

The register of shareholders and the register of substantial shareholders shall be open for inspection by any person.

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Section B: Register of Shareholders

Contents of Register of Shareholders§
130.
(a)The following shall be recorded in the register of shareholders —
(1)in respect of all shares —
(a)the name, identity number and address of each shareholder, all as delivered to the company;
(b)the quantity of shares and the class of shares held by each shareholder, with an indication of their nominal value, if any, and if any amount of the consideration fixed for the share has not yet been paid — the amount not yet paid;
(c)the date of allotment of the shares or the dates of their transfer to the shareholder, as the case may be;
(d)if the shares are designated by serial numbers, the company shall indicate alongside the name of each shareholder the numbers of the shares registered in that shareholder's name;
(2)(deleted)
(3)in respect of dormant shares, as defined in section 308 — also their number and the date on which they became dormant, all as known to the company;
(4)in respect of shares that do not confer voting rights pursuant to section 309(b) or pursuant to section 333(b) — also their number and the date on which they became shares that do not confer voting rights, all as known to the company.
(b)A company shall retain all records entered in the register of shareholders as referred to in subsection (a) and shall update changes therein as early as possible from the day on which it becomes aware of them.
Registration of Trustee in Register of Shareholders§
131.
(a)A shareholder who is a trustee shall report this to the company, and the company shall register that person in the register of shareholders with an indication of the trust, and that person shall be regarded for the purposes of this Law as a shareholder.
(b)The provisions of subsection (a) shall not apply to a shareholder as defined in section 177(1), unless a duty to report applies to that person pursuant to other provisions of law.
Registration Company§
132.
(a)In a company whose shares are listed for trading on a stock exchange in Israel, a registration company may be registered in the register of shareholders in addition to what is stated in section 130(a)(1); however, a registration company shall not be considered a shareholder of the company, and the shares in its name are owned by those entitled to them as referred to in section 177(1).
(b)A shareholder by virtue of entitlement as referred to in section 177(1) is entitled to be registered in the register of shareholders in place of the registration of those shares in the name of the registration company, and the number of shares registered in the name of the registration company shall change accordingly.
Register of Shareholders as Evidence§
133.
(a)The register of shareholders shall be prima facie evidence of the correctness of what is recorded therein.
(b)In the event of a conflict between what is recorded in the register of shareholders and a share certificate, the evidentiary weight of the register of shareholders prevails over the evidentiary weight of the share certificate.
Correction of Registration§
134.

If a person is registered in the register of shareholders without being entitled thereto, or is not registered in the said register even though entitled thereto, or if the registration is incomplete or inaccurate, and the company has refused to correct what requires correction, the court may, on the application of the aggrieved person or any shareholder of the company, grant any relief it considers appropriate in the circumstances of the matter, including correction of the register.

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Section C: Registration of Share Warrant

135.§

(Repealed — תשע״ו־2)

136.§

(Repealed — תשע״ו־2)

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Section D: Register of Substantial Shareholders and Additional Shareholder Register Outside Israel

Contents of Register of Substantial Shareholders§
137.

The register of substantial shareholders shall retain the reports received by the company pursuant to the Securities Law regarding the holdings of substantial shareholders in shares of the company.

Additional Shareholder Register§
138.
(a)A company may maintain an additional register of shareholders outside Israel (hereinafter — the additional register).
(b)A company that maintains an additional register shall indicate in the share register pursuant to section 130 (hereinafter — the principal register) the number of shares registered in the additional register of shareholders and their numbers, if they are designated by numbers.
Regulations§
139.

The Minister may prescribe provisions regarding the maintenance of the additional register referred to in section 138, including provisions regarding the updating of the principal register with the particulars of the additional register.

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Chapter III: Reporting

Section A: Reporting by a Company that is not a Reporting Corporation

Reporting by a Company that is not a Reporting Corporation§
140.

A company that is not a reporting corporation shall send to the Registrar of Companies an annual report as referred to in section 141, and shall also report to the Registrar as detailed in this Law and in the following matters:

(1)amendments to the articles of association as referred to in section 21, including a decision to change the name as referred to in section 31, and an increase or reduction of the registered share capital as referred to in sections 286 and 287;
(2)a change in the address of the registered office as referred to in section 123;
(2a)a change in the digital address as referred to in section 123a;
(3)a notice pursuant to section 159, that the company has no auditor;
(4)appointments to the board of directors and changes in its composition, as referred to in section 223;
(5)allotment of shares as referred to in section 292;
(6)transfer of shares as referred to in section 299, within fourteen days of the date of the transfer;
(7)a merger as referred to in section 317.
(8)a change in the type of company, as referred to in section 343.
(10)the making of a winding-up order in respect of it or the passing of a resolution for voluntary winding-up pursuant to Part 8-A.
Annual report of a company that is not a reporting corporation§
141.
(a)A company that is not a reporting corporation shall prepare and submit to the Registrar, once a year, an annual report as the Minister shall prescribe, within fourteen days after the annual meeting.
(b)A company that is not a reporting corporation that does not hold an annual meeting, as provided in section 61, shall submit the annual report once a year, no later than fourteen days after the dispatch of the financial statements to the shareholders, and in respect of an inactive company that does not prepare financial statements pursuant to the provision of section 172(g) — once a year.
(c)(Repealed)

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Section B: Reporting by a Company that is a Reporting Corporation

Reporting by a company that is a reporting corporation§
142.
(a)(Repealed)
(b)A company that is a reporting corporation shall report to the Securities Authority, to the stock exchange on which the company's securities are listed for trading, and to the Registrar of Companies, as required under this Law, under the Securities Law, or under any other law.
Inspection at the Securities Authority§
143.
(a)The reports submitted to the Securities Authority as provided in section 142 shall be open for public inspection at the Securities Authority, and any person may inspect them and obtain certified copies of what is recorded therein, either through the Securities Authority or through others whom the Authority has authorised for that purpose, unless inspection thereof has been restricted under any law.
(b)A certified copy as provided in subsection (a) shall be received in any legal proceeding as an original and shall constitute conclusive evidence that the original document is in the possession of the Securities Authority.
(c)Where provisions regarding electronic filing or reporting have been prescribed under the Securities Law, the provisions of subsection (b) shall apply in respect of a printout of the said reports; for the purposes of this section, "printout" has the meaning assigned to it in the Computers Law, 5755-1995.
144.§

(Repealed — י״פ תשס״ד־2)

Reporting by a company that is a reporting corporation to the Registrar§
145.

Without derogating from the provisions of any law, a company that is a reporting corporation shall report to the Registrar under this Law only in respect of the following matters:

(1)a resolution to change the name as provided in section 31;
(2)a change in the address of the registered office as provided in section 123;
(2a)a change in the digital address as provided in section 123a;
(3)a merger as provided in section 317;
(4)a change in the type of the company, as provided in section 343.
(5)the making of a winding-up order in respect of it or the passing of a resolution for voluntary winding-up pursuant to Part Eight A.

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Chapter IV: Internal Auditor in a Public Company and in a Private Company that is a Bond Company

Duty to appoint an internal auditor§

146.
(a)The board of directors of a public company or of a private company that is a bond company shall appoint an internal auditor; the internal auditor shall be appointed on the recommendation of the audit committee.
(b)A person who is an interested party in the company, a person who is an office holder in the company, a relative of any of the foregoing, as well as the auditing accountant or anyone acting on the auditing accountant's behalf, shall not serve as internal auditor of the company.

Internal Audit Law§

147.

The provisions of sections 3(a), 4(b), 8 to 10 and 14(b) and (c) of the Internal Audit Law, 5752-1992, shall apply to the internal auditor, subject to the other provisions of this Chapter and with the necessary modifications.

Person in charge of the internal auditor§

148.

The organisational superior of the internal auditor shall be the chairperson of the board of directors or the general manager, as shall be determined in the articles, or, in the absence of a provision in the articles, as the board of directors shall determine.

Work plan§

149.

The internal auditor shall submit for approval by the board of directors or for approval by the audit committee, as shall be determined in the articles, or, in the absence of a provision in the articles, as the board of directors shall determine, a proposed annual or periodic work plan, and the board of directors or the audit committee, as the case may be, shall approve it with such modifications as they see fit.

Urgent examination§

150.

The chairperson of the board of directors or the chairperson of the audit committee may instruct the internal auditor to conduct an internal audit, in addition to the work plan, in respect of matters where a need for urgent examination arises.

Function of the internal auditor§

151.

The internal auditor shall examine, inter alia, the regularity of the company's activities from the standpoint of compliance with the law and proper business conduct.

Submission of report§

152.

The internal auditor shall submit a report of findings to the chairperson of the board of directors, the general manager and the chairperson of the audit committee; a report concerning matters examined pursuant to section 150 shall be delivered to the person who instructed the internal auditor to conduct the audit.

Termination of tenure§

153.
(a)The tenure of the internal auditor shall not be terminated without the internal auditor's consent, and the internal auditor shall not be suspended from office, unless the board of directors has so resolved after obtaining the position of the audit committee and after the internal auditor has been given a reasonable opportunity to present the internal auditor's position before the board of directors and before the audit committee.
(b)For the purposes of subsection (a), the quorum for the opening of a board of directors meeting shall not be less than, notwithstanding the provisions of the final part of section 104, a majority of the members of the board of directors.

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Chapter V: Auditor

Section A: Appointment of an Auditor

Duty to appoint an auditing accountant§
154.
(a)A company shall appoint an auditing accountant who shall audit its annual financial statements and express an opinion thereon (hereinafter — audit activity); the Minister may prescribe that certain additional activities performed by an auditing accountant pursuant to law shall also constitute audit activity for the purposes of this Chapter.
(b)An auditing accountant shall be appointed at each annual meeting and shall serve in office until the end of the following annual meeting; however, a general meeting may, if so provided in the articles, appoint an auditing accountant to serve for a longer period, which shall not extend beyond the end of the third annual meeting following that at which the auditing accountant was appointed.
(c)In a private company in which the provisions of section 61 apply, an auditing accountant may be appointed to serve until the completion of one audit activity or, if so provided in the articles, until the completion of three audit activities.
Appointment of the first auditing accountant§
155.
(a)The board of directors may, at any time before the first annual meeting, appoint the company's first auditing accountant and determine the auditing accountant's remuneration; the first auditing accountant so appointed shall serve until the end of the first annual meeting.
(b)In a private company in which the provisions of section 61 apply, the provisions of section 154(c) shall apply in respect of the end of tenure of an auditing accountant appointed by the board of directors.
Joint Auditors§
156.

A company may appoint several auditors who shall jointly perform the audit.

Appointment by a special meeting§
157.

Where the office of an auditing accountant has become vacant and the company has no additional auditing accountant, the board of directors of the company shall convene a special meeting, at the earliest practicable date, with the appointment of an auditing accountant on its agenda.

Inactive companies§
158.
(a)Notwithstanding the provisions of section 154, a private company whose annual turnover does not exceed NIS 731,660 or a private company that is a public benefit company whose annual turnover does not exceed the amount referred to in section 19(c) of the Associations Law (in this Law — an inactive company) may resolve at a general meeting that no auditing accountant shall be appointed for it, unless shareholders holding ten per cent or more of the company's issued capital have objected thereto; the amount referred to in this subsection shall be linked to the index and rounded to the nearest amount that is a multiple of ten new shekels; once a year, at the beginning of the month of February, the Minister shall publish in Reshumot the said amount as updated for that year; in this subsection —

"turnover" means the total receipts from every source and of every type received in the last year that has elapsed;

"year" means a period of 12 months from the month of January to the end of the month of December.

(a1)Where a general meeting has so resolved as provided in subsection (a), the company shall do the following:
(1)send the resolution to the Registrar within fourteen days of the date of the resolution;
(2)attach to its annual report a declaration signed by an office holder, stating that the company has not appointed an auditing accountant and has not prepared audited financial statements because the conditions in subsection (a) have been satisfied.
(b)(Repealed)
(c)The provisions of this section shall not apply to a bond company.
Appointment by the Registrar§
159.
(a)If an auditor has ceased to serve in a company and no other person has been appointed in that person's place as provided in section 157, the company shall notify the Registrar thereof within ninety days of the date on which the auditor ceased to serve as aforesaid; however, the giving of notice to the Registrar shall not derogate from the company's obligation to appoint an auditor, for as long as no auditor has been appointed for it pursuant to subsection (b); if the company has appointed an auditor after giving notice to the Registrar, it shall notify the Registrar thereof within fourteen days.
(b)If the Registrar has received notice of the cessation of service of the auditor as referred to in subsection (a), and for as long as the Registrar has not received notice of the appointment of a new auditor, the Registrar may appoint an auditor to serve in that capacity until the end of the next annual meeting, and may determine the remuneration that the company shall pay that person.
(c)The Minister may prescribe provisions and conditions for the appointment of an auditor to be appointed by the Registrar, the commencement of that person's service and that person's remuneration.

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