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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Section F: General Meeting of Participation Unit Holders
Annual Meeting of Participation Unit Holders§
65ab.
(a)A public limited partnership shall hold an annual meeting of participation unit holders each year and no later than 15 months after the last annual meeting.
(b)The agenda of the annual meeting shall include a discussion of the financial statements and of the report of the board of directors of the general partner company; the agenda may include the appointment of an auditor, as well as a matter that the partnership Regulations provide shall be discussed at the annual meeting or another matter placed on the agenda as referred to in section 65ad.
Special Meeting of Participation Unit Holders§
65ac.
(a)The board of directors of the general partner company shall convene a special meeting pursuant to its own decision, and also upon the demand of any of the following:
(1)two directors or a quarter of the serving directors;
(2)one or more participation unit holders who hold at least five percent of all participation units in the public limited partnership.
(b)A board of directors that has been required to convene a special meeting as referred to in subsection (a) shall convene it within 21 days from the day the demand was submitted to it, for a date as referred to in section 63(c) of the Companies Law, 5759-1999, as it applies in respect of a special meeting in a public company.
(c)If the board of directors did not convene a special meeting pursuant to the provisions of this section, the provisions of sections 64 and 65 of the Companies Law, 5759-1999, shall apply, with the necessary modifications.
Agenda of a General Meeting§
65ad.
(a)The agenda of a general meeting shall be determined by the board of directors of the general partner company, and shall also include matters for which the convening of a special meeting was required pursuant to section 65ac, as well as a matter that was requested as referred to in subsection (b).
(b)One or more participation unit holders who hold at least one percent of all participation units in a public limited partnership, and also the supervisor, may request the board of directors to include a matter on the agenda of a general meeting to be convened in the future, provided that the matter is suitable for discussion at such a meeting; the Minister may prescribe provisions in respect of this subsection, including in respect of the time for submitting the request.
(c)At a general meeting, decisions shall be adopted only on matters set out in the agenda.
Voting at a Meeting of Participation Unit Holders§
65ae.
(a)A participation unit holder may vote in person or by proxy and also by voting instrument pursuant to the provisions of subsection (b).
(b)A participation unit holder may vote at a general meeting by means of a voting instrument in which the holder indicates the manner of voting, on decisions on the following matters:
(1)appointments and dismissals of external directors in the general partner company;
(2)authorisation of the chairperson of the board of directors of the general partner company or the chairperson's relative to perform the function of general manager of the general partner company or to exercise the chairperson's powers, and authorisation of the general manager of the general partner company or the general manager's relative to perform the function of chairperson of the board of directors of the general partner company or to exercise the chairperson's powers pursuant to section 65g;
(3)approval of acts or transactions requiring the approval of the general meeting of participation unit holders and also approval of remuneration policy, pursuant to sections 65as and 65au to 65ay;
(4)approval of a merger pursuant to section 320 of the Companies Law, 5759-1999, as applied in section 65bf;
(5)additional matters set out in the partnership Regulations or that the Minister has prescribed pursuant to section 65af.
(c)In addition to the provisions of subsection (b), a participation unit holder as referred to in paragraph (2) of the definition "participation unit holder" may vote at a general meeting by means of a voting instrument transmitted to the public limited partnership through the electronic voting system pursuant to Section B of Chapter VII-B of the Securities Law, also on decisions on any other matter on the agenda of such a meeting.
(d)If a participation unit holder has voted by more than one method, the later vote shall be counted; for this purpose, a vote by a participation unit holder in person or by proxy shall be considered later than a vote by means of a voting instrument.
Application of the Provisions of the Companies Law in respect of a General Meeting§
65af.
The provisions pursuant to sections 62, 69 to 74, 78 to 81, 84 to 86, 87(b) to (d), 88 to 91 and 182(b) and (c) of the Companies Law, 5759-1999, shall apply in respect of a general meeting pursuant to this Chapter, with the necessary modifications and with the following modifications:
(1)in section 62(a), instead of "director in the company" read "director in the general partner company";
(2)in section 72, instead of "articles" read "partnership Regulations", and instead of "director" read "director in the general partner company";
(3)in sections 81, 85 and 91(a), wherever it appears, instead of "in the articles" read "in the partnership Regulations".
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Contact Us →Section G: Register of Participation Unit Holders
Register of Participation Unit Holders§
65ag.
A public limited partnership shall maintain a register of participation unit holders.
Inspection of the Register of Participation Unit Holders§
65ah.
The register of participation unit holders shall be open for public inspection.
Contents of the Register of Participation Unit Holders§
65ai.
(a)The following shall be registered in the register of participation unit holders —
(1)the name, identity number and address of each participation unit holder, all as provided to the public limited partnership;
(2)the quantity of participation units owned by each holder, with an indication of their nominal value, if any, and if any amount has not yet been paid on account of the consideration fixed for a participation unit — the amount not yet paid;
(3)the date of allotment of the participation units or the date of their transfer to the holder, as the case may be;
(4)next to the holder's name, the serial numbers of the participation units registered in the holder's name — if the participation units have been assigned serial numbers.
(b)The provisions of sections 130(b) and 131 to 134 of the Companies Law, 5759-1999 shall apply to the register of participation unit holders, with the necessary modifications.
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Contact Us →Section H: Rights and Duties of a Participation Unit Holder
Rights and Duties of a Participation Unit Holder§
65aj.
The rights and duties of a participation unit holder are as set out in this Ordinance, in the partnership Regulations and under any law.
The Right to Information about the Partnership§
65ak.
Participation unit holders have the right to inspect the following documents of the public limited partnership:
(1)minutes of general meetings of participation unit holders, as referred to in section 65af;
(2)the register of participation unit holders, as referred to in section 65ag;
(3)a document in the possession of the partnership, as referred to in section 65al;
(4)the partnership Regulations, the trust deed and financial reports drawn up in accordance with the provisions of Chapter VII-A of the Securities Law or under any other law applicable to the public limited partnership;
(5)any document that the public limited partnership is required to submit under this Ordinance and under any law to the Registrar of Partnerships or to the Securities Authority, which is open to public inspection at the Registrar of Partnerships or at the Securities Authority, as the case may be.
Inspection of Partnership Documents§
65al.
A participation unit holder is entitled to demand from the general partner company, stating the purpose of the demand, to inspect any document in the possession of the general partner company or in the possession of the public limited partnership that relates to an act or transaction requiring approval under the provisions of sections 65j and 65au to 65az; however, the provisions of section 185(b) of the Companies Law, 5759-1999 shall apply, with the necessary modifications, with respect to the authority to refuse a request as aforesaid.
The Right to Receive Financial Reports§
65am.
A participation unit holder is entitled to receive from the general partner company, upon request, a copy of the financial reports, if the reports have not been published in accordance with the provisions under Chapter VII-A of the Securities Law.
The Right in Case of Oppression§
65an.
The provisions of section 191 of the Companies Law, 5759-1999 shall apply, with the necessary modifications, with respect to the conduct of an affair of a public limited partnership in a manner that constitutes oppression or a material apprehension of oppression of all or some of the participation unit holders therein.
The Right to Bring a Derivative Claim and Derivative Defence§
65ao.
Any participation unit holder and any director of the general partner company may bring a claim on behalf of the public limited partnership in respect of a cause of action belonging to it or defend against a legal proceeding on behalf of the public limited partnership, and a creditor of a public limited partnership may bring a derivative claim on behalf of the partnership in respect of a prohibited distribution carried out in the partnership; the provisions of Chapter III of Part 5 of the Companies Law, 5759-1999 shall apply in this regard, with the necessary modifications, and with the following modification: in section 205, instead of "for which a liquidator has been appointed under Chapter X of the Companies Ordinance" read "for which a trustee has been appointed under section 45 of the Bankruptcy Ordinance [New Version], 5740-1980".
Duty of a Holder of Decisive Power to Act Fairly§
65ap.
(a)A participation unit holder who knows that the manner of the holder's vote will be decisive in the matter of a resolution of a general meeting, and a participation unit holder who, under the provisions of the partnership Regulations, has the power to appoint or prevent the appointment of an office holder in the general partner company or in the public limited partnership or other power vis-à-vis the public limited partnership, is under a duty to act fairly towards the public limited partnership.
(b)The provisions of section 193(b) of the Companies Law, 5759-1999 shall apply to a breach of the duty of fairness, with the necessary modifications.
Duties of a Participation Unit Holder§
65aq.
(a)A participation unit holder shall act in the exercise of the holder's rights and in the performance of the holder's duties towards the other participation unit holders, towards the general partner company and towards the public limited partnership in good faith and in the customary manner, and shall refrain from abusing the holder's power in the public limited partnership, including in voting at a general meeting.
(b)A participation unit holder shall refrain from oppressing other participation unit holders.
(c)The provisions of section 192(c) of the Companies Law, 5759-1999 shall apply to a breach of the provisions of subsections (a) and (b), with the necessary modifications.
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Contact Us →Section I: Transactions with Office Holders and Interested Parties and Remuneration Policy
Remuneration Policy and Transactions Requiring Special Approval§
65ar.
(a)The remuneration policy of the general partner company and of the public limited partnership, as well as the transactions enumerated in this Section, require approvals as detailed in this Section, provided that they are for the benefit of the public limited partnership.
(b)The Minister, after consultation with the Securities Authority, may prescribe that the provisions of this Section with respect to remuneration policy shall not apply to categories of public limited partnerships, as the Minister shall prescribe.
Determination of Remuneration Policy for Office Holders§
65as.
(a)The board of directors of the general partner company shall determine a policy with respect to the terms of office and employment of office holders in the public limited partnership and in the general partner company (in this Ordinance — the remuneration policy), after considering the recommendations of the remuneration committee submitted to it under section 65f; the remuneration policy requires approval by the general meeting.
(b)In approving the remuneration policy by the general meeting under subsection (a), one of the following shall be satisfied:
(1)the majority of votes at the general meeting shall include a majority of all the votes of the participation unit holders participating in the vote who are not the general partner company or its controlling shareholder or persons with a personal interest in the approval of the policy; in the count of all votes of the aforesaid participation unit holders, abstaining votes shall not be taken into account;
(2)the total votes against in the vote among the participation unit holders referred to in paragraph (1) shall not exceed two percent of all the voting rights of the participation unit holders; the Minister may prescribe rates different from the rate referred to in this paragraph.
(c)Notwithstanding the provisions of subsections (a) and (b), the board of directors of the general partner company may determine the remuneration policy even if the general meeting has objected to its approval, provided that the remuneration committee and thereafter the board of directors decided, on the basis of detailed reasons and after reconsidering the remuneration policy, that approval of the remuneration policy notwithstanding the objection of the general meeting is for the benefit of the public limited partnership.
(d)A remuneration policy determined for a period exceeding three years requires approval once every three years; approval under this subsection shall be given in the manner in which the remuneration policy is determined under subsections (a) to (c).
(e)Without derogating from the provisions of subsection (d), the board of directors shall examine, from time to time, the remuneration policy and the need to adapt it to the provisions of section 65at if there has been a material change in the circumstances that existed at the time of its determination or for other reasons.
Considerations in Determining the Remuneration Policy§
65at.
(a)The remuneration policy shall be determined, inter alia, in accordance with the considerations detailed in section 267b(a) of the Companies Law, 5759-1999, with the necessary modifications.
(b)The remuneration policy shall include, inter alia, reference to the matters detailed in Part 1 of the First A Schedule to the Companies Law, 5759-1999, and provisions as detailed in Part 2 of that Schedule shall be determined therein, inter alia, with the necessary modifications.
Transaction with an Office Holder§
65au.
A transaction of the public limited partnership with an office holder in the public limited partnership or in the general partner company, or a transaction of the public limited partnership with another person in which an office holder as aforesaid has a personal interest, except for a personal interest as detailed in sub-paragraphs (a) and (b) of section 270(1) of the Companies Law, 5759-1999, with the necessary modifications, requires the following approvals:
(1)with respect to a transaction that is not an exceptional transaction — approval of the board of directors of the general partner company, unless another manner of approval has been prescribed in the partnership Regulations;
(2)with respect to an exceptional transaction — approval of the audit committee and thereafter approval of the board of directors of the general partner company.
Remuneration Agreement with an Office Holder Who Is Not a Director§
65av.
(a)An engagement of a public limited partnership or of the general partner company with an office holder in the public limited partnership or in the general partner company who is not a director, with respect to the terms of the office holder's tenure and employment, except for an engagement with the chief executive officer of the public limited partnership or of the general partner company, requires approval of the remuneration committee and thereafter approval of the board of directors of the general partner company.
(b)The approval of the remuneration committee and the approval of the board of directors as referred to in subsection (a) shall be in accordance with the remuneration policy determined under the provisions of sections 65as and 65at.
(c)Notwithstanding the provisions of subsection (b), the remuneration committee and thereafter the board of directors of the general partner company may, in special cases, approve a transaction as referred to in subsection (a) not in accordance with the remuneration policy, provided that both of the following are satisfied:
(1)the remuneration committee and thereafter the board of directors of the general partner company approved the transaction, inter alia, in accordance with the considerations referred to in section 65at(a) and in accordance with the requirements of section 65at(b);
(2)the general meeting approved the transaction, provided that what is set out in section 65as(b)(1) or (2) is satisfied.
(d)Notwithstanding the provisions of subsection (c), the remuneration committee and thereafter the board of directors of the general partner company may, in special cases, approve a transaction as referred to in that subsection even if the general meeting has objected to the approval of the transaction, provided that the remuneration committee and thereafter the board of directors so decided on the basis of detailed reasons, after reconsidering the transaction and examining in such deliberation, inter alia, the objection of the general meeting.
Remuneration Agreement of a Chief Executive Officer§
65aw.
(a)A transaction of a public limited partnership or of the general partner company with the chief executive officer of the public limited partnership or of the general partner company, with respect to the terms of the chief executive officer's tenure and employment, requires approval of the following, in this order:
(1)the remuneration committee;
(2)the board of directors of the general partner company;
(3)the general meeting, provided that what is set out in section 65as(b)(1) or (2) is satisfied; with respect to approval of the general meeting under this paragraph, the provisions of section 65av(d) shall apply.
(b)The approval of the remuneration committee and the approval of the board of directors as referred to in subsection (a)(1) and (2) shall be in accordance with the remuneration policy; however, the remuneration committee and thereafter the board of directors may, in special cases, approve the transaction not in accordance with the remuneration policy, provided that what is set out in section 65av(c)(1) is satisfied; nothing in this subsection shall derogate from the provisions of subsection (a)(3).
(c)Notwithstanding the provisions of subsection (a)(3), the remuneration committee may exempt from the approval of the general meeting as referred to in that subsection a transaction with a person who is a candidate to serve as chief executive officer of the public limited partnership or of the general partner company and in respect of whom what is set out in section 240(b) of the Companies Law, 5759-1999 is satisfied, with the necessary modifications, if it found, on the basis of reasons it detailed, that submitting the transaction for approval by the general meeting would frustrate the engagement, provided that the transaction is consistent with the remuneration policy.
Transaction with a Director with Respect to Terms of Tenure and Employment§
65ax.
(a)An engagement of a public limited partnership or of the general partner company with a director of the general partner company with respect to the terms of the director's tenure and employment, with respect to the director's tenure as a director, and also with respect to the director's employment in other positions — if the director is so employed, requires approval of the remuneration committee and thereafter approval of the board of directors.
(b)The approval of the remuneration committee and the approval of the board of directors as referred to in subsection (a) shall be in accordance with the remuneration policy; however, the remuneration committee and thereafter the board of directors may, in special cases, approve the transaction not in accordance with the said policy, provided that what is set out in section 65av(c)(1) is satisfied, and the general meeting has approved the transaction in a resolution in which what is set out in section 65as(b)(1) or (2) is satisfied.
Exceptional Transactions, Remuneration Agreements with a Controlling Shareholder and Private Placement§
65ay.
(a)In this section, "controlling shareholder", in a public limited partnership — the general partner company and its controlling shareholder, including a person who holds twenty-five percent or more of the voting rights in the general partner company if no other person holds more than fifty percent of the voting rights therein; for the purpose of holding, two or more persons who hold voting rights in the general partner company and each of whom has a personal interest in the approval of the same transaction submitted for approval under this section shall be deemed to hold jointly.
(b)The following transactions require approval as referred to in subsection (c):
(1)a private placement;
(2)a transaction that is one of the following:
(a)an exceptional transaction of the public limited partnership with its controlling shareholder;
(b)an exceptional transaction of the public limited partnership with another person in which the controlling shareholder has a personal interest;
(3)an engagement of the public limited partnership with the controlling shareholder or with a relative thereof, directly or indirectly, including through a company under the controlling shareholder's control —
(a)with respect to the receipt of services by the public limited partnership;
(b)if the controlling shareholder is also an office holder in the public limited partnership or in the general partner company — with respect to the terms of the controlling shareholder's tenure and employment;
(c)if the controlling shareholder is an employee of the public limited partnership and is not an office holder therein or in the general partner company — with respect to the controlling shareholder's employment in the partnership.
(c)A transaction as referred to in subsection (b) requires approval of the following, in this order:
(1)the audit committee, and in a transaction with respect to terms of tenure and employment — the remuneration committee;
(2)the board of directors of the general partner company;
(3)the general meeting, provided that one of the following is satisfied:
(a)the majority of votes at the general meeting shall include a majority of all the votes of the participation unit holders who do not have a personal interest in the approval of the transaction, participating in the vote; in the count of all the votes of the aforesaid participation unit holders, abstaining votes shall not be taken into account;
(b)the total votes against in the vote among the participation unit holders referred to in sub-paragraph (a) shall not exceed two percent of all the voting rights of the participation unit holders; the Minister may prescribe rates different from the rate referred to in this paragraph.
(d)The approval of the remuneration committee and the approval of the board of directors of the general partner company as referred to in subsection (c)(1) and (2), in a transaction concerning terms of tenure and employment, shall be in accordance with the remuneration policy; however, the remuneration committee and thereafter the board of directors may, in special cases, approve the transaction not in accordance with the said policy, provided that what is set out in section 65av(c)(1) is satisfied; nothing in this subsection shall derogate from the provisions of subsection (c)(3).
(e)
(1)a transaction as referred to in subsection (b), for a period exceeding three years, except for a transaction for the payment of promotion fees, requires approval as referred to in subsection (c), once every three years;
(2)notwithstanding the provisions of paragraph (1), a transaction as referred to in subsection (b)(2) may be approved for a period exceeding three years, provided that the audit committee approved that an engagement for such a period is reasonable in the circumstances;
(3)the provisions of paragraphs (1) and (2) shall apply to a transaction of a limited partnership that has become a public limited partnership, with respect to the period after it became a public limited partnership.
(f)
(1)approval by the audit committee, by the remuneration committee and by the board of directors under the provisions of subsections (b) and (c) shall be given after they have examined, inter alia, whether the transaction includes a distribution;
(2)if the audit committee, the remuneration committee or the board of directors determined that the transaction includes a distribution, the transaction shall be approved only after they have approved that the provisions of any law with respect to distribution have been complied with in that regard.
(g)
(1)in this subsection, "expense reimbursement transaction" means a transaction between the public limited partnership and the general partner company concerning payment to the general partner company in respect of expenses actually incurred for the purpose of managing the partnership, except for such expenses paid, directly or indirectly, to the controlling shareholder of the general partner company, and expenses in which the controlling shareholder has a personal interest in their payment, provided that such expenses paid for the purpose of an engagement with a director with respect to the terms of the director's tenure and employment shall be in accordance with rules to be prescribed by the Minister, in consultation with the Securities Authority; for this purpose, "personal interest" — excluding a personal interest arising solely from the controlling shareholder's holding in the general partner company, and with respect to an engagement with an office holder or an employee — excluding a personal interest arising solely from tenure or employment in the general partner company;
(2)an expense reimbursement transaction does not require approval under this section if one of the following is satisfied:
(a)the public limited partnership has not engaged with the general partner company in an engagement as referred to in subsection (b)(3) from the date it became a public limited partnership;
(b)in a public limited partnership that has engaged with the general partner company in an engagement as referred to in subsection (b)(3) — the general meeting has resolved not to re-approve the engagement as referred to in subsection (e)(1).
Duty of Disclosure§
65az.
(a)The general partner company or its controlling shareholder or an office holder in the general partner company or in the public limited partnership who knows that the office holder has a personal interest in an existing or proposed transaction of the partnership shall disclose to the partnership, without delay, and no later than the meeting of the board of directors of the general partner company at which the transaction is first discussed, the nature of the personal interest, including any material fact or document.
(b)Section 269(a) of the Companies Law, 5759-1999 shall apply to transactions of the general partner company to which the provisions of this Section apply, as if it were a public company.
(c)The provisions of subsections (a) and (b) shall not apply where the personal interest arises solely from a personal interest of a relative in a transaction that is not an exceptional transaction.
Amendment of an Existing Transaction and Application of Provisions from the Companies Law with Respect to Transactions§
65ba.
(a)A transaction in which what is set out in section 65av(a) or 65aw(a) is satisfied, and which is an amendment of an existing transaction, requires approval of the audit committee or the remuneration committee, as the case may be, alone, if the said committee approved that the change in the terms of the transaction is not material relative to the existing transaction.
(b)The provisions under sections 277 to 284 of the Companies Law, 5759-1999 shall apply with respect to this Section, with the necessary modifications and with the following modifications:
(1)the general partner company or the public limited partnership, as the case may be, shall be regarded as if it were a public company;
(2)for the purposes of the said sections, the general partner company and its controlling shareholder shall be regarded as the controlling shareholder of the public limited partnership.
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