Translation Notice — This is an English translation of a Hebrew law and may contain inaccuracies. In any dispute or legal matter, the original Hebrew text as published in Reshumot (ספר החוקים) is the sole authoritative and legally binding version.

Ordinance

Companies Ordinance [New Version]

פקודת החברות [נוסח חדש]

Chapter E: Management

Division A: Registered Office

Registered Office

97.

(a)From the day on which a Company commences carrying on business, or from the twenty-eighth day after its date of incorporation, whichever is the earlier, it shall maintain a registered office in Israel to which all notices and communications to the Company may be addressed.

(b)Notice of the location of the registered office and of every change of location shall be given to the Registrar within twenty-eight days after the date of incorporation or after the change, and the Registrar shall register the notice.

(c)The statement of the office address in the annual report pursuant to Section 123 does not exempt from the obligation to give notice pursuant to this Section.

(d)A Company that has contravened a provision of this Section, and every officer thereof who knowingly and wilfully authorised or permitted the contravention, shall be liable to a continuing Fine / Penalty.

Publication of Name

98.

Every Company shall ensure that its name —

(1)shall always appear prominently and in legible characters on the exterior of every office and place in which its business is carried on;

(2)shall be engraved on the Company's seal in legible characters;

(3)shall be mentioned in legible characters in every notice, advertisement or other official publication of the Company, and in every bill of exchange, endorsement, cheque, money order or order for goods, packing list, invoice, receipt, letter of credit, and in every commercial or business document issued by the Company or purporting to be signed by or on behalf of the Company.

Breach of Provision

99.

(a)A Company that has contravened a provision of Section 98(1), and every officer thereof who knowingly and wilfully authorised or permitted the contravention, shall be liable to a Fine and a continuing Fine.

(b)An officer of a Company, or any person acting on its behalf, who used, or authorised the use of, a seal purporting to be the seal of the Company on which its name is not engraved as required by Section 98(2), or who issued or signed any of the Company's documents referred to in Section 98(3) on which its name is not mentioned, or who authorised the issue or signing thereof, shall be liable to a Fine; and if the document was a bill of exchange, cheque or order, shall, in addition to the Fine, be personally liable to the holder of the document for the amount thereof, unless such amount has been duly paid by the Company.

Breach of Provision

(60(2), (3))

Part B: Documents

100.

A Contract made or a bill of exchange made, endorsed or accepted in the name of or on behalf of a Company by a person acting under its authority shall be deemed to be a Contract made or a bill of exchange made, endorsed or accepted by the Company.

Contracts and Bills of Exchange

101.

A Company may, by instrument executed under its seal, authorise any person, either generally or in respect of a specific matter, to act as its representative for the purpose of executing documents on its behalf outside Israel, and any document signed on its behalf by such representative under his seal shall bind the Company and shall be of full effect as though it had been executed under the Company's seal.

Documents Abroad

Official Seal for Use Abroad

102.

(a)A Company whose objects require or include the carrying out of transactions outside Israel may, if its articles so authorise, maintain for use in a place outside Israel an official seal which shall be a facsimile of its seal used in Israel, with the addition on its face of the name of the place where such official seal is to be used; and if it has done so, it may, by instrument executed under its seal, authorise any person appointed for that purpose in a place outside Israel to affix the official seal to any document to which the Company is a party in that place.

(b)The authority of an authorised person as aforesaid, in respect of the relationship between the Company and the person dealing with the authorised person, shall be for the period specified in the authorisation, and if no period is specified therein — until notice of the termination or revocation of the authorisation is given to that person.

(c)The person affixing the official seal shall certify in writing signed by him, on the document to which the seal is affixed, the place and date of the affixing, and every document duly affixed with the official seal shall bind the Company as though it had been executed under its seal.

For Documents Abroad

Official Seal

103.

A certificate and any proceeding requiring authentication on behalf of the Company shall be sufficiently authenticated if signed by a director or secretary or other authorised officer of the Company, and need not be affixed with its seal.

Authentication of Documents

104.

Service of a document on a Company may be effected by leaving it at its registered office as recorded in the Registrar's registers at the time of service, or by sending it thereto by post.

[131]

782 Book of Laws 37 10th of Elul 5743 — 19.08.1983

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.

Division C: Ultra Vires

Without Authority

preamble-8.

Without Authority

Act Without Authority

105.

(a)A legal act done on behalf of a Company without authority from it or in excess of the authority given, where the party towards whom the act was done knew or ought to have known of the excess, shall have no effect against the Company unless ratified by a resolution of the general meeting or — if the granting of the authority was within the power of the directors — by a resolution of the directors.

(b)The filing with the Registrar of the memorandum and other documents which a Company is required to file with the Registrar, and their registration by the Registrar, shall not by themselves constitute evidence of knowledge of their contents for the purposes of subsection (a).

(c)A ratification under subsection (a) shall not prejudice any right acquired by another person in good faith and for consideration before such ratification.

Defective Act.

Remedies for Defective Act

106.

(a)A person acting on behalf of a Company is required to refrain from any act that exceeds the objects set out in its memorandum and from any act performed without authority from the Company or in excess of such authority; and if he acted while knowing or being required to know of such a defect in his act, the Company shall be entitled against him to the remedies available to it for breach of his duties towards it; the burden of proof shall lie on one who claims that he did not know or was not required to know of the defect.

(b)Where there are grounds to believe that an act containing a defect as referred to in subsection (a) is about to be performed, the court may, on the application of a member or creditor of the Company, issue an Order to prevent it.

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.

Division D: Management with a Reduced Number of Members

With Reduced Number of Members

preamble-9.

With Reduced Number

of Members

Carrying on Business with Reduced Number of Members

107.

Where the number of members of a Company has fallen and stood at fewer than seven, and in a private company — at fewer than one, and the Company carries on business for more than six months with such reduced number — every person who was a member of the Company at the expiration of those six months, knowing that the Company is carrying on business with a reduced number of members, shall be severally liable for the payment of all debts contracted by the Company after that period and may be sued therefor without joining the other members.

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.

Chapter F: Meetings and Reports

Division A: General Meetings

Annual General Meeting

preamble-10.

Annual

Annual General Meeting

108.

(a)A Company is required to hold a general meeting at least once in every calendar year and not later than fifteen months after its last general meeting.

(b)If such a meeting has not been held, the Company and every director or manager who knowingly was a party to the default shall be liable to a Fine.

(c)If such a meeting has not been held, the court may, on the application of a member of the Company, convene the meeting or direct that it be convened.

Extraordinary

Extraordinary General Meeting

109.

(a)Upon the requisition of members holding on the date of the requisition not less than 10% of the paid-up share capital carrying the right to vote on that date at general meetings of the Company, the directors of the Company shall — notwithstanding anything in the articles — duly convene an extraordinary general meeting; in a Company having no share capital, they shall do so upon the requisition of members representing not less than 10% of the voting rights of members entitled to vote on that date at a general meeting of the Company.

783 Book of Laws 37 10th of Elul 5743 — 19.08.1983

(b)The requisition shall state the object of the meeting, shall be signed by the requisitionists and shall be deposited at the registered office of the Company, and may consist of several documents in like form each signed by one or more requisitionists.

Convening of Extraordinary General Meeting by Members

110.

(a)If the directors do not duly convene a meeting within twenty-one days from the date of deposit of the requisition under Section 109, the requisitionists, or such of them as represent more than one half of the total voting rights of all of them, may themselves convene a meeting, provided that it shall not be held after the expiration of three months from the date of deposit of the requisition as aforesaid, and it shall be convened as nearly as possible in the same manner as that in which meetings are convened by the directors.

(b)Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors to convene the meeting shall be repaid to them by the Company, and any sum so repaid shall be retained by the Company out of any sums due or to become due from it to the directors in default, by way of fees or other remuneration for their services.

(c)For the purposes of this Section, the directors shall be deemed to have not duly convened the meeting if a particular resolution is to be proposed thereat as a special resolution and the directors have not given notice thereof as provided in Section 115(a)(3).

Convening of Meeting — General Procedural Provisions

111.

The following provisions shall apply, unless the articles of the Company otherwise provide in that regard:

(1)the number of members entitled to convene a meeting of the Company is at least two holding not less than 10% of the issued share capital, and if the Company has no share capital — such number of members as constitutes 5% of the total membership of the Company;

(2)a meeting — other than a meeting for the passing of a special resolution — may be convened by giving written notice seven days in advance, and such notice shall be given to every member in the manner prescribed in the Second Schedule;

General Procedural Provisions

(64(1))

(3)the quorum at a meeting shall be, in a private company — two members present in person, and in a public company — three members so present;

(4)the chairman of the meeting shall be the member elected as such by the members present at the meeting;

(5)in a Company that originally had a share capital, every member shall have one vote for each share or each shekel of stock held by him; in any other Company — every member shall have one vote.

Court — Convening of Meeting

112.

Where it is impracticable to convene or conduct a meeting in the manner prescribed therefor by the articles or by this Ordinance, the court may, on its own initiative or on the application of a director, or a member entitled to vote at the meeting, order that a meeting be convened, held and conducted in such manner as it thinks fit, and may give such ancillary directions as it deems necessary, and such meeting shall be deemed to be a meeting of the Company duly convened, held and conducted.

Court

(64(2))

Procedural Provisions for Corporations at Meetings

113.

(a)A corporation — even if it is not a Company — that is a member of a Company, or a creditor or debenture holder of a Company, may, by resolution of its directors or other governing body, authorise any person to act as its representative at any meeting of the Company or of any class of its members, or at any meeting of creditors of the Company held pursuant to this Ordinance or the Regulations thereunder, or pursuant to the provisions of a debenture or a trust deed, as the case may be.

At Meetings

784 Book of Laws 37 10th of Elul 5743 — 19.08.1983

(b)A representative of a corporation authorised under subsection (a) may do in the name of the corporation all that the corporation itself could have done had it been an individual shareholder or creditor or debenture holder in the other Company.

Split Voting

114.

On a poll, a shareholder or a proxy for voting may vote by virtue of some of the shares which he holds or whose holders he represents, and he may vote by virtue of some of the shares in one direction and by virtue of some of them in another direction.

(66(1)–(4), (8))

Types of Resolutions

115.

(a)Resolutions passed at a general meeting of a company are —

(1)an ordinary resolution, being a resolution passed by a simple majority of the members entitled to vote and who voted in person, or, where proxies are permitted, by their proxies, at a general meeting of which due notice has been given;

(2)an extraordinary resolution, being a resolution passed by a majority of not less than three-quarters of the members entitled to vote and who voted in person, or, where proxies are permitted, by their proxies, at a general meeting of which due notice has been given stating the intention to propose the resolution as an extraordinary resolution;

(3)a special resolution, being a resolution passed by the majority required for the passing of an extraordinary resolution, at a general meeting of which due notice has been given at least twenty-one days in advance stating the intention to propose the resolution as a special resolution; however, with the consent of all members entitled to attend and vote, a special resolution may be proposed and passed at a general meeting of which less than twenty-one days' advance notice has been given.

(b)For the purposes of subsection (a), notice of a general meeting shall be deemed to have been duly given and the meeting shall be deemed to have been duly held, if the notice was given and the meeting was held as required under the articles or under this Ordinance.

[At an Adjourned Meeting

169(1)]

Date of Resolution

116.

A resolution passed at an adjourned meeting of a company, of holders of shares of a particular class, of directors, of creditors, or of contributories of a company, shall for all purposes be treated as having been passed on the day on which it was in fact passed, and not on any earlier date.

[At a Meeting]

Poll of Votes

117.

(a)At a meeting at which an extraordinary resolution or a special resolution has been proposed and no poll has been demanded, a declaration by the chairman that the resolution has been passed shall be conclusive evidence of the fact, and it shall not be necessary to prove the number or proportion of votes recorded in favour of or against the resolution.

(b)At such a meeting, a poll may be demanded by such number of members entitled to vote thereat as is specified for that purpose in the articles, provided that such number shall not exceed five, and in the absence of any such provision in the articles — by three such members, or by one member holding, or two members holding together, not less than 15% of the paid-up share capital of the company.

(c)Where a poll is demanded pursuant to this section, the majority shall be calculated according to the number of votes to which each member is entitled under the articles.

[Requiring Registration

and Delivery

118.(a) The following resolutions and agreements, a printed or typewritten copy of which must be forwarded to the Registrar within fifteen days after they are passed, and which the Registrar shall register:

(1)an extraordinary resolution:

785 Book of Laws 37 10th of Elul 5743 19.08.1983

(2)a special resolution;

(3)a resolution agreed to by all members of the company, which, but for such agreement, would not have been effective unless passed as an extraordinary resolution or as a special resolution;

(4)a resolution or agreement agreed to by all members of a particular class of shareholders, which, but for such agreement, would not have been effective unless passed by a special majority or in some other special manner;

(5)a resolution or agreement binding members of a particular class of shareholders, even if not agreed to by all of them;

(6)a resolution under Section 319(1) requiring the company to be wound up voluntarily.

(b)Resolutions and agreements referred to in subsection (a), so long as they remain in force, shall be embodied in or annexed to every copy of the articles issued by the company after they are passed, and where there are no articles, a printed or typewritten copy thereof shall be forwarded to every member on request, against payment of such sum as the company may determine, not exceeding the amount prescribed by Regulations.

(c)A company that has contravened, and an officer thereof or its liquidator who knowingly and wilfully authorised or permitted the contravention of an obligation imposed on the company —

(1)under subsection (a), shall be liable to a continuing Fine;

(2)under subsection (b), shall be liable to a Fine in respect of each copy in relation to which the offence was committed.]

Resolutions

119.

(a)A company shall cause minutes of the proceedings at its general meetings and at meetings of its directors or managers to be entered in books kept for that purpose.

(b)Minutes which appear to be signed by the chairman of the general meeting or of the meeting at which the proceedings were held, or by the chairman of the next succeeding meeting, shall be evidence that the meeting was duly convened and held and conducted as stated therein, and that all proceedings thereat were duly conducted, and that every appointment of a director, manager, or liquidator shall be valid; all of the foregoing unless the contrary is proved.

[Shall Serve as Evidence

168(1)–(3)]]

Minutes

120.

(a)The minute books of general meetings shall be kept at the registered office of the company and shall be open to inspection by any member free of charge during business hours, subject to such reasonable restrictions as the company may impose by its articles or by general meeting, provided that not less than two hours per day shall be allowed for inspection.

(b)A copy of any minutes referred to in subsection (a) shall be furnished to any member within seven days after he has requested it, against payment of such sum as the company may determine, not exceeding the amount prescribed by Regulations.

(c)Where any provision of this section with respect to the right of inspection of minutes or the furnishing of a copy thereof is contravened, the company and any officer thereof who knowingly and wilfully authorised or permitted the contravention shall be liable to a Fine and a continuing Fine, and the court may by Order compel compliance with the provision that has been contravened.

[Inspection of Minutes

and Obtaining Copies]

Sign B': Annual Return

121.

(a)A company having a share capital shall make at least once in every year an annual return (hereinafter in this sign referred to as 'the return'), as at the fourteenth day after the first or only annual general meeting held in that year (hereinafter referred to as 'the summary date').

(b)The return shall be completed within fourteen days after the summary date, shall be incorporated in the register of members as a separate part thereof, and a copy thereof signed by a director, the manager, or the secretary of the company shall be forwarded forthwith to the Registrar.

[Annual Return

136(1), (6)(1)]

786 Book of Laws 37 10th of Elul 5743 19.08.1983

[List of Members

136(2)(1)]

Obligation to Prepare

122.

The return shall contain the names of the members of the company as at the date of the return, their identity numbers, addresses, occupations, and the number of shares held by each of them, and where the names are not arranged in alphabetical order, an alphabetical index thereof shall be appended.

[136(3)]

Particulars in the Return

123.

The return shall also state the address of the registered office of the Company and shall include, distinguishing between shares issued for cash and shares issued as fully or partly paid up otherwise than in cash, a summary of —

(1)the total share capital of the Company and its division into shares;

(2)the number of shares taken from the incorporation of the Company up to the date of the return;

(3)the amount of calls made on each share;

(4)the total amount of calls received;

(5)the total amount of calls unpaid;

(6)the total amount paid by way of commission in respect of any shares or debentures, or allowed by way of discount in respect of any debentures, since the date of the last return;

(7)the total number of shares forfeited;

(8)the total number of shares in respect of which share warrants are outstanding at the date of the return;

(9)the total number of share warrants issued and share warrants surrendered since the date of the last return;

(10)the number of shares comprised in each share warrant;

(11)the number and amount of redeemable shares outstanding;

(12)all particulars with respect to the directors in office at the date of the return, as required to be entered in the register of directors under Section 87;

(13)the total amount of the Company's charges secured by charges required to be registered under this Ordinance with the Registrar.

No Share Capital

Return of a Company Without Share Capital

124.

A company not having a share capital shall make at least once in every year a return stating the address of its registered office and the particulars enumerated in paragraphs (12) and (13) of Section 123.

[136(5)(1)]

Audited Balance Sheet

125.

(a)Annexed to every return of a public company shall be a copy of the last balance sheet audited by the company's auditor, including every document required by law to be annexed thereto, and a copy of the auditor's report on the balance sheet; all as certified by one of the directors, the manager, or the secretary of the company.

(b)Where the balance sheet has not been prepared in Hebrew, Arabic, or English, a certified Hebrew translation thereof shall be annexed in the manner prescribed.

(c)Where it is found that the form of the last balance sheet did not comply with the requirements of the law in force on the date of the audit, the copy shall be corrected in accordance with those requirements and a notation shall be made thereon that it has been so corrected.

(d)This section shall not apply to a company to which Chapter Ten of the Securities Law, 5728-1968, applies, and such company shall so state in the return.

Contravention of Provisions

126.

A company that has contravened any provision of Sections 121 to 125, and every officer thereof who knowingly or wilfully authorised or permitted the contravention, shall be liable to a continuing Fine.

787 Book of Laws 37 10th of Elul 5743 19.08.1983

Return Submitted by the Registrar Exempts from Filing a Summary

127.

The Registrar may, not later than the expiry of one year after the last annual general meeting of the company, send to the company, in the prescribed form, its return for the preceding year incorporating the changes required by notifications given to the Registrar during that year; where the Registrar has done so, the company shall not be required to submit a return under Section 121, but a director, manager, or secretary of the company shall confirm the accuracy of the particulars in the form and shall indicate any particulars to be added or amended therein, all in the manner prescribed by Regulations.

[Return Submitted by the Registrar Exempts from Filing a Summary]

Updating the Return

128.

(a)A private company shall deliver with its return a certificate to the effect that the company has not invited the public to subscribe for any of its shares or debentures since the date of the last return, or, in the case of the first return, since the date of its incorporation.

(b)Where the return of a private company shows that the number of its members exceeds fifty, there shall also be annexed thereto a certificate to the effect that all members in excess of fifty are persons who, under Section 39(a)(3), are not to be counted among the fifty.

(c)A certificate under this section shall be signed by a director of the company or by its secretary.

[Return of a Private 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.

← Prev 1…3 4 5…10 Next →

Page 4 of 10