Nonprofit Law and an Amuta’s Institutions
Israeli nonprofit law requires that three institutions be present in every Israeli amuta: a General Assembly, an Executive Board and an Audit Committee.
This Series of Posts on Nonprofit Law
Advocate Joshua Pex, a partner at Cohen, Decker, Pex & Brosh law firm in Israel, specializes in Israeli nonprofit law. This short article will discuss some information that will be helpful for those interested in Israeli nonprofit organizations or Israeli charitable organizations (an amuta in singular and amutot in plural). We have a long series of posts on our website discussing the rules and regulations to better help you properly manage your nonprofit organization in Israel.
For more information on the Israeli Corporations Authority which oversees Israeli nonprofit organizations, see the government website. For more articles from an Israeli lawyer and legal advice for Israeli nonprofit organizations related to the topic of this article, see our articles about the General Assembly, the Executive Board and the Audit Committee.
Background Information and Nonprofit Law
Israel’s Amutot Law defines an amuta as “a corporate body established by two or more persons for a lawful purpose that is not aimed at the distribution of profits to its members and whose main objective is not the making of profits.” From this definition, 1) an amuta is not allowed to distribute profits, 2) an amuta must be engaged in activities that promote the goals of the amuta, and 3) membership is personal and nontransferable.
While an amuta may have multiple institutions, according to standard by-laws, every amuta in Israel must have a minimum of the following three institutions: a General Assembly, an Executive Board and an Audit Committee.
Members of the Amuta
All the individuals involved in establishing the amuta as well as the person who applied to be a member of the amuta and has been accepted as such are members of the amuta until they choose to cease their involvement and/or membership in the amuta. Any amuta member must be over 17 years old. Israeli citizenship is not a requirement for amuta membership. One’s membership in an amuta ends with death, resignation or the removal of the individual from the amuta as discussed in the amuta’s by-laws.
The General Assembly
The General Assembly is an institution that includes all members of the amuta. The General Assembly must meet at least once a year. The General Assembly has the authority to, among other things, determine how many people should be on the Executive Board as well as elect Executive Board members, appoint an auditor, approve financial statements, and make resolutions about changing the amuta’s by-laws.
For more information about the General Assembly and its responsibilities, see our article specifically addressing the General Assembly.
The Executive Board
The Executive Board is the institution charged with managing the amuta’s affairs. It must have a minimum of two members and has the authority to enforce decisions of the General Assembly, deal with annual budgets and ensure proper financial management of the amuta.
For more information about the Executive Board and its responsibilities, see our article on the Executive Board.
The Audit Committee
The Audit Committee (or Audit Body) is elected by the General Assembly and must have a minimum of two members who help ensure proper financial management of the organization. Beyond its responsibilities in ensuring proper management of the economic affairs of the amuta, it also ensures that the amuta is acting according to its own objectives.
For more information about the Audit Committee and its responsibilities, see our article on the Audit Committee.
Contact us if you have any questions about Israeli nonprofit law or Israeli nonprofit organizations (whether an amuta or cheletz).
Advocate Joshua Pex focuses on Israeli nonprofit law and would be happy to address your questions and concerns regarding Israeli nonprofit law and your nonprofit organization in Israel.
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