From 1920 until 1948, British forces occupied pre-State Israel and ruled with an iron fist. The British Mandate governed and much common law influence, derived from the British, set the laws that pertained to companies in Israel. These backward, antiquated and irrelevant British laws were untouched by Israel’s fledgling administration that had to constantly pool all its resources for survival and defense.
In 1999, The Companies Law was passed, with involved a major overhaul for the Israeli corporate business industry. This law brought a very new approach and breathed new life by restructuring the law, so that it was closer to the Delaware Law of Corporations, rather than an old world formula and constant reminder of oppression.
Some of the changes were eagerly accepted and deemed favorable, by the legal and corporate business sectors in Israel, while at the same time, the other changes were severely criticized, which were amended at some later date. Israel’s Ministry of Justice has a department called the Companies Registrar, whose responsibility it is to register private companies and supervise all their activities.
Limited Liability Companies Specializing in Corporate and Business Law
For those who plan to offer goods or services and can expect earnings of over 50,000 New Israeli Shekels a year, establishing a limited liability company would be wise, as it would protect much of the owner’s personal property in case of any legal entanglement or lawsuit. Application forms will have to be filled and signed by all parties that own the company and then filed properly in order for this status to take effect.
While an Israeli company is not required to register an agent, it does need a proper, registered address to which all official notices will be sent. A company in Israel, according to law, must also file information and declaration of registered and initially issued capital and details pertaining to the limitation of liability. The company’s aims must be clearly filed and registered, to prevent any illegal operation. These filings are to be done with the tax authority and only when it issues a proper document/permit, can the company begin its operations.
Company Shares
If the company sells shares of stock, those can fall under different categories, which will outline voting, dividend and liquidation rights. If the company sells management shares, they can grant holders the right to appoint directors and more.
Holdings by Foreign Residents
Israel does not limit holdings by foreign residents in Israeli companies and even offers considerable tax and government incentives. If shares are to be held by an individual, a copy of his passport must be filed, once it has been validated by a notary at an Israeli embassy or consulate, or apostille, if abroad. If done in Israel, then an attorney who is a notary can validate the copy of the passport.
In the event that the foreign holder is a corporation, then it must present its certificate of incorporation, for filing, together with a proper document verifying its existence, on that date and both, which must be translated into Hebrew or English, will have to be authenticated by a notary.
