OrdinanceCorporate & Business
Partnerships Ordinance [New Version], 5735-1975
פקודת השותפויות [נוסח חדש], תשל"ה-1975
Published: 1975-07-07Consolidated Hebrew text as of 2023-09-18 · Last amended 2015-02-23✓ Amendment status checked against the Knesset legislation record on 2026-09-15
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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
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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.
Section D: Internal Auditor, Auditor and Financial Statements
Duty to Appoint an Internal Auditor§
65n.
(a)The provisions of Chapter IV of Part 4 of the Companies Law shall apply to the general partner company as if it were a public company, with the necessary modifications, provided that the audit in the general partner company shall be conducted in matters of the public limited partnership only.
(b)The internal auditor of the general partner company appointed in accordance with the provisions under subsection (a) shall audit, inter alia, the regularity of the acts of the public limited partnership from the standpoint of compliance with the law and proper business procedure.
Obligation to Appoint an Auditor§
65o.
The provisions of Chapter V of Part 4 of the Companies Law, 5759-1999, except for the provision of section 159, shall apply to the public limited partnership as if it were a public company, with the necessary modifications and with the following modifications:
(1)wherever it appears, the terms "general meeting", "annual meeting" and "special meeting" shall have the meaning ascribed to them in section 65a;
(2)wherever it appears, instead of "in the articles" read "in the partnership Regulations";
(3)in sections 160(a) and 163(b), instead of "in the company" read "in the public limited partnership and in the general partner company".
Financial Statements§
65p.
(a)A public limited partnership that is a reporting corporation shall keep accounts and shall also prepare financial statements in accordance with the Securities Law.
(b)The financial statements of the public limited partnership shall be approved by the board of directors of the general partner company, shall be signed in its name, and shall be brought before the annual meeting.
(c)The board of directors of the general partner company shall appoint from among its members a committee for the approval of the financial statements of the public limited partnership, and the provisions pursuant to section 171(e) of the Companies Law, 5759-1999, shall apply for that purpose, with the necessary modifications.
(d)In a public limited partnership, the Minister may, after consultation with the Securities Authority, prescribe provisions and conditions regarding the procedure for the approval of additional reports that the partnership is required to prepare, including regarding the obligation of the board of directors of the general partner company to appoint a board committee to examine such reports, the qualifications of the members of such committee and the degree of their connection to the partnership, to the general partner company or to its controlling shareholder.
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Contact Us →Section E: Supervisor in a Public Limited Partnership
Obligation to Appoint a Supervisor, the Supervisor's Duties and Functions§
65q.
(a)In a public limited partnership there shall serve a supervisor who shall be appointed pursuant to this Section.
(b)The supervisor is obliged to act for the benefit of the holders of participation units who are not the general partner company or its controlling shareholder, and the supervisor shall conduct himself with care, in good faith and with diligence.
(c)The supervisor shall take the steps necessary to ensure the fulfilment of the obligations and undertakings of the general partner company pursuant to the partnership Regulations and the fulfilment of the obligations and undertakings of the trustee pursuant to the trust agreement.
(d)The Minister may prescribe steps that the supervisor is to take in accordance with the provisions of subsections (b) and (c), and may prescribe different steps as aforesaid in respect of different types of public limited partnerships.
Manner of Appointing a Supervisor and Term of Office§
65r.
(a)The first supervisor shall be appointed by the general partner company before the first offer of participation units to the public, and shall serve until the date of convening of the second annual meeting of participation unit holders.
(b)The general meeting shall appoint a supervisor by a majority of votes, provided that all of the following conditions are met:
(1)in the count of all the votes of participation unit holders at the general meeting, the votes of the general partner company or its controlling shareholder or of persons with a personal interest in the approval of the appointment — except for a personal interest that does not arise from a connection with the general partner company or its controlling shareholder — as well as abstaining votes, were not taken into account;
(2)the total supporting votes among participation unit holders who are not the general partner company or its controlling shareholder or persons with a personal interest in the approval of the appointment — except for a personal interest that does not arise from connections with the general partner company or its controlling shareholder — exceeds two percent of all voting rights of participation unit holders; the Minister may prescribe different rates from the said rate.
(c)The general meeting shall determine, by a majority as referred to in subsection (b), the terms of office and employment of a supervisor and the supervisor's term of office, provided that it shall not exceed three years, and the meeting may reappoint the supervisor for additional terms of office.
(d)Notwithstanding the provisions of section 65q(a), the general meeting may resolve that for periods each of which shall not exceed three years from the date of the resolution, no supervisor shall serve in the public limited partnership, provided that the provisions of paragraphs (1) and (2) of subsection (b) are satisfied in that regard.
Qualifications for Serving as Supervisor§
65s.
(a)Each of the following is qualified to serve as supervisor:
(1)an individual resident in Israel who is qualified to be appointed as a director with accounting and financial expertise;
(2)an individual resident in Israel who is an accountant or an advocate licensed to practise as such in Israel;
(3)an accounting partnership, an accounting company, a law partnership or a law company registered in Israel (in this section — corporation).
(b)A corporation serving as supervisor shall appoint an individual who is qualified to be appointed as supervisor and who is a partner, office holder or employee of the corporation, as the case may be, to serve on its behalf, and may replace such individual, all subject to the obligations of the corporation towards the participation unit holders.
(c)The duties applicable to a supervisor shall apply to an individual serving on behalf of a corporation and to the corporation, jointly and severally.
Restrictions on the Appointment of a Supervisor§
65t.
(a)The provisions pursuant to sections 224a to 227 of the Companies Law, 5759-1999, shall apply to a supervisor with the necessary modifications and with the following modifications:
(1)wherever it appears, except in sections 225(a)(3) and 226a, instead of "director" or "external director" read "supervisor", instead of "as a director" read "as a supervisor", and instead of "public company" read "public limited partnership";
(2)in section 226a, instead of the concluding part beginning with the word "to a director" read "to a supervisor in a public limited partnership".
(b)A person who is a relative of the controlling shareholder in the general partner company shall not be appointed as supervisor, nor shall a person who has, or whose relative, partner, employer, person to whom the person is directly or indirectly subordinate, or corporation in which the person is the controlling shareholder has, at the time of appointment or in the two years preceding the time of appointment, a connection to the public limited partnership, to the general partner company, to its controlling shareholder or to a relative of the controlling shareholder, at the time of appointment, or to another corporation; for the purposes of this subsection, "connection" and "another corporation" have the meanings ascribed to them in section 240(b) of the Companies Law, 5759-1999.
(c)A person shall not be appointed as supervisor if the person's other functions or occupations create or are likely to create a conflict of interest with the person's function as supervisor, or if they are liable to impair the person's ability to serve as supervisor.
(d)A director in the general partner company of a certain public limited partnership shall not be appointed as supervisor in another public limited partnership (in this section — the other partnership) if at the same time a director in the general partner company of the other partnership serves as supervisor in the said public limited partnership.
(e)An individual who is an employee of the Securities Authority or an employee of a stock exchange in Israel shall not be appointed as supervisor in a public limited partnership.
(f)Without derogating from the provisions of subsection (b), a person who has, or whose relative, partner, employer, person to whom the person is directly or indirectly subordinate, or corporation in which the person is the controlling shareholder has, professional business connections with a person to whom a connection is prohibited pursuant to the provisions of subsection (b), shall not serve as supervisor, even if such connections are not habitual, except for negligible connections; if such connections exist during the supervisor's term of office, this shall be regarded, for the purposes of section 65z(a)(3), (b) and (c), as a breach of one of the conditions required for the supervisor's appointment or service as supervisor.
Convening a General Meeting and a Board of Directors Meeting by the Supervisor§
65u.
(a)The supervisor may require the board of directors of the general partner company to convene a general meeting with the items that the supervisor requests on its agenda.
(b)A board of directors that has been required to convene a general meeting as referred to in subsection (a) shall convene it within 21 days from the day the requirement was submitted to it, provided that the date of convening shall be no later than 35 days from the date of publication of the notice of the convening of the meeting, unless otherwise prescribed in respect of a meeting to which the provisions of section 65ae(b) apply.
(c)If the board of directors did not convene a general meeting pursuant to the supervisor's requirement, within the periods referred to in subsection (b), the supervisor may convene the meeting, and the general partner company shall bear the expenses incurred by the supervisor for the purpose of convening the meeting.
(d)If the supervisor learns, in the course of performing the supervisor's function, of material deficiencies in the activities of the public limited partnership or in the activities of the general partner company in the affairs of the public limited partnership that are liable to oppress the unit holders who are not the general partner company or its controlling shareholder, the supervisor shall report thereon to the chairperson of the board of directors; upon the supervisor's notification of such deficiencies, the chairperson of the board of directors shall convene, without delay, a board of directors meeting to discuss the matters brought to the chairperson's attention.
The Supervisor's Right to Receive Information, to Engage Advisers and to Participate in Meetings§
65v.
(a)The provisions of sections 265 and 266 of the Companies Law, 5759-1999, shall apply to the supervisor, with the necessary modifications and with the following modifications:
(1)wherever it appears, instead of "director" or "external director" read "supervisor", and instead of "the company's board of directors" or "the board of directors" read "the board of directors of the general partner company";
(2)wherever it appears, instead of "the company" read "the general partner company or the public limited partnership", and in section 266(a), instead of "at the company's expense" read "at the public limited partnership's expense".
(b)The supervisor may participate in any board of directors meeting and in any general meeting; the board of directors of the general partner company shall notify the supervisor of the place and time at which the general meeting or the board of directors meeting is to be convened.
The Supervisor's Right of Action§
65w.
(a)If the supervisor has reasonable grounds to believe that an act of the public limited partnership, of the general partner company or of an office holder in either of them, or of the trustee, is being carried out or is about to be carried out, which is liable to oppress the participation unit holders, the supervisor shall address a demand to them to cease or to refrain from such an act.
(b)If the address pursuant to subsection (a) is not complied with, or if the circumstances of the matter do not permit such an address, the supervisor may apply to the court with a request that it remove the oppression or prevent the act; the court may issue an order preventing the act or any other relief that seems to it appropriate in the circumstances of the matter.
(c)Unless the court determines otherwise, the general partner company shall bear all the expenses incurred by the supervisor pursuant to the provisions of this section, including court fees and legal fees, at such time as the court shall determine.
Preservation of Powers and Duties§
65x.
(a)Nothing stated in this Section shall derogate from the powers, duties or obligations of a supervisor pursuant to the partnership Regulations, pursuant to the trust agreement or pursuant to any law.
(b)An amendment to the partnership Regulations or to the trust agreement that derogates from the powers of the supervisor requires the approval of the general meeting by a majority as referred to in section 65r(b).
Resignation of Supervisor§
65y.
(a)A supervisor may resign by notice to the general partner company (in this Section — notice of resignation), in which the reasons for the resignation shall be set out.
(b)A supervisor who has delivered a notice of resignation shall convene a special meeting with the appointment of a supervisor in the supervisor's stead on its agenda, and shall continue to serve in the position until another supervisor is appointed in the supervisor's stead.
Expiry of a Supervisor's Term of Office§
65z.
(a)The court may, upon the application of the public limited partnership, the general partner company, a director in the general partner company, a participation unit holder or a creditor, order the expiry of the term of office of a supervisor if it has found that one of the following has occurred:
(1)the supervisor has been permanently prevented from performing the supervisor's function;
(2)during the supervisor's term of office, the supervisor has been convicted by a court outside Israel of offences as set out in section 226(a)(2) of the Companies Law, 5759-1999;
(3)the supervisor has ceased to satisfy one of the conditions required pursuant to this Section for the supervisor's appointment;
(4)the supervisor has breached one of the supervisor's duties pursuant to section 65q(b).
(b)
(1)If the board of directors of the general partner company becomes aware that there is a concern that a supervisor has ceased to satisfy one of the conditions required pursuant to this Section for the supervisor's appointment, or that there is a concern that the supervisor has breached one of the supervisor's duties pursuant to section 65q(b), the board of directors shall discuss this at the first meeting convened after it becomes aware thereof;
(2)if the board of directors determines that the supervisor has ceased to satisfy one of the conditions required pursuant to this Section for the supervisor's appointment or that the supervisor has breached one of the supervisor's duties pursuant to section 65q(b), the board of directors shall convene a special meeting with the termination of the supervisor's term of office on its agenda;
(3)the board of directors' reasons shall be brought before the special meeting and the supervisor shall be given a reasonable opportunity to present the supervisor's position; the decision of the special meeting regarding the termination of the supervisor's term of office shall be adopted by the majority required for the supervisor's appointment.
(c)A supervisor who has ceased to satisfy a condition required pursuant to this Section for the supervisor's appointment shall immediately notify the public limited partnership thereof, and the supervisor's term of office shall expire upon the giving of the notice.
(d)If a supervisor has been convicted by judgment of an offence as referred to in section 226(a)(1) or (a1) of the Companies Law, 5759-1999, as applied in section 65t, the supervisor shall notify the public limited partnership and the general partner company thereof; the term of office of such supervisor shall expire upon the giving of the notice, and the supervisor may not be reappointed to serve as supervisor unless the period during which the supervisor is prohibited from serving as supervisor pursuant to section 226 of the Companies Law, 5759-1999, as applied as aforesaid, has elapsed.
(e)If the Administrative Enforcement Committee has decided to impose on a supervisor an enforcement measure prohibiting the supervisor from serving as a director in any public company, the supervisor shall notify the public limited partnership and the general partner company thereof; the term of office of such supervisor shall expire upon the giving of the notice and the supervisor may not be reappointed to serve as supervisor unless the period of the prohibition as aforesaid has elapsed.
Convening a Meeting for the Purpose of Appointing a Supervisor§
65aa.
(a)If the term of office of a supervisor has ended or expired, the board of directors of the general partner company shall convene a special meeting with the appointment of a supervisor on its agenda, at the earliest possible time.
(b)If a special meeting pursuant to subsection (a) has not been convened within a reasonable time, the court may, upon the application of a participation unit holder, appoint a supervisor for such period and on such conditions as it sees fit.
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