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The Role the General Assembly Plays in the Israeli Company

Michael Decker
Michael Decker

Michelle Long

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The general assembly of any company, composed of its shareholders, plays a crucial role in directing the corporate activities. What amendments may it pass on behalf of the company? What are its powers?

Our law office, specializing in Israeli corporate law, is here for you. Please reach out to us should you have any questions about the direction you wish to take your company.

What is a general assembly?

A general assembly can take the form of either an annual assembly or a special assembly of the shareholders of the company, the latter being relegated to a private company and having its own procedures for how it may be invoked and its resolutions adopted. As its name implies, a company must hold an annual assembly annually and within a period not to exceed 15 months since the previous one.

general assembly

What does the general assembly do?

The general assembly has broad powers. It acts as a sort of regulatory body for the company, directing its activities, making amendments to its bylaws, appointing its directors and adopting policies which significantly affect it.

The powers of the general assembly include the following:

  1. Approving the bylaws of the company and voting on proposed amendments to its provisions;
  2. Assuming the powers of the board of directors in cases in which it is prevented from carrying out its directives in its own right;
  3. Appointing the auditor of the company;
  4. Appointing outside directors of the company;
  5. Approving deals and transactions which statute makes incumbent on the general assembly to adopt;
  6. Making increases or decreases to the registered capital of the company;
  7. Adopting a decision to merge the company with another; and
  8. Deciding on the dissolution of the company.

One can clearly see that the general assembly has broad powers to determine how the company is to be directed and governed.

Can the company impose limits on the above?

The powers of the general assembly which are stated above may not be limited by the company. The company may choose to broaden the above powers in its bylaws, however.

The appointing and firing of directors is an exception to this rule. The bylaws may place fetters on the general assembly’s powers to do this.

Voting rights

The decisions of the general assembly are adopted through a simple majority vote, unless statute or its bylaws state otherwise. As a rule, each share will entitle its shareholders to a single vote, although the company may prescribe different voting rights in its bylaws.

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