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The Corporate Structure in Israel

Michael Decker
Michael Decker

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Heather Lebrun

What are the different organs that make up a company? This article summarizes the legal requirements for an Israeli company’s corporate structure.

Our law office, specializing in all aspects of Israeli company law, can help you establish and structure your company in the best way possible.

The general assembly

The general assembly serves a key role in the makeup of a corporation. It is composed of the shareholders and has broad powers to frame the company’s bylaws, appoint its directors and adopt changes which will significantly affect the corporation, such as making alteration to the bylaws themselves.

The Corporate Structure in Israel

The board of directors

The board of directors is tasked with the administration and oversight of the company. It is responsible for setting the company’s goals and ensuring they are met, as well as overseeing the role of the CEO.

What does the CEO do?

The CEO is in charge of the ongoing management of the company. However, their discretion in doing so is circumscribed to the policies and directives put in place by the board of directors.

Are the organs comprising a company finite?

As stated, a company is composed of its organs, which include the general assembly, the board of directors and its CEO. Yet, this is not a finite list. It is through the organs of a company that it carries out its activities and they may bind it in doing so.

Who are the officers of the company?

There are multiple officers that make up a company. The CEO and vice-CEO are included in this list, as are their deputies. So is the COO, CFO and board of directors and anyone who is directly subordinate to them. In fact, anyone who serves the role of an officer in a company is deemed to constitute such a role regardless of his official title. As with the organs constituting a company, this list is not finite.

What are their duties?

The officers of a company have a dual loyalty to it. The first is a duty of care, which means they must not be derelict in carrying out their roles. The second is a fiduciary duty. The officers must act in good faith and for the benefit and welfare of the company. As such, an officer is forbidden from having a conflict of interest, from being in competition with the company and from exploiting business opportunities for personal gain. Furthermore, he has an obligation to deal with the company in a transparent manner.

Who has a controlling interest?

A shareholder with a controlling interest is one who can direct the company’s activities. It is taken for granted that a shareholder who possesses at least 50 percent of the means for controlling the company has a controlling interest. Means of control refers to voting rights or the ability to appoint directors. In light of the tremendous control such a shareholder wields on the company, they have a duty to deal with it in a fair manner and to keep its best interests before them when carrying out their practices.

Contact an Israeli law expert

Are you interested in creating a company in Israel, purchasing an Israeli company, or establishing an Israeli subsidiary of your main company? Our law office can help establish a corporate entity, register it with the Registrar of Companies, and manage reports for any Israeli or foreign corporation. Contact us now for further information and to schedule a meeting:

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