NGOs, Administrative Fines, Prohibitions and Transferring Assets in Israel
This article addresses NGOs, administrative fines, prohibitions and transferring assets in Israel. NGOs are not allowed to sell the amutah, and after liquidation procedures commence, Israeli NGOs are prohibited from transferring assets to their members. Breaches of the Israeli Amutot Law will be considered administrative offenses and will result in fines. This article provides some information about these various issues.
This Series of Posts
Our law office specialize in a variety of fields, including Israeli non-governmental organization law (Israeli NGO law). This article is one in a long series discussing what you need to know about non-governmental or charitable organizations (an amutah in singular and amutot in plural) in Israel. This series of posts will discuss various rules to manage Israeli NGOs in order to better help you administer your Israeli non-governmental organization.
For more information on the Israeli Corporations Authority which oversees Israeli NGOs, see the government website. For more articles from an Israeli lawyer and legal advice for Israeli NGOs related to the topic of this article, see our articles about merging amutot and transferring funds, loans and stipends.
Various breaches of Israeli Amutot Law will be considered administrative offences. These breaches can result from, among other things, failing to do the following:
1) Maintain a list of registered amutah members and Executive Board members.
2) Keep account books.
3) Hold General Assembly meetings as frequently as required.
4) Keep minutes as required.
5) Submit documents to the Registrar of Amutot.
If one or more of the breaches listed as examples occur, these are clear violations of Israeli Amutot Law, and administrative fines may be imposed, beginning at a rate of 1000 to 2000 NIS. Additional fines can be imposed for continued breaches of the law. Either the amutah or the individual breaking the law will have to pay the fines.
Selling an Amutah
Israeli non-governmental organizations are different than companies as membership cannot be sold or transferred to others. An Israeli NGO may not be sold. In the event that an Israeli NGO wishes to transfer its activities, it can do so through a merger. The liquidating NGO transfers its activities to the absorbing NGO, and the absorbing NGO takes on all the assets and obligations of the liquidating NGO.
Transferring Assets in Israel after Liquidation
When an Israeli NGO voluntarily liquidates or if it liquidates as a result of a court order, the Israeli amutah is not permitted to transfer its assets to its members. However, if someone gives an asset like a car to an amutah, so long as the person giving the asset gives it on the condition that it may be used by the amutah, and in the event the amutah is liquidated, it must be returned, then the asset can be returned to the individual, and it may not be sold. In order for this to happen, this needs to be clearly defined in paperwork from the time the asset is given.
If you have questions about your Israeli non-governmental organization, questions about administrative fines, the prohibition on selling an amutah or transferring assets in Israel, call us today!
Advocate Joshua Pex specializes in Israeli NGO law and would be happy to discuss the needs of your Israeli non-governmental organization with you.
: 03-3724722, 055-9781688