Post-Registration Company Compliances in Israel- An Overview
Enterslice advises and assists in preparing a compliance calendar that records all the statutory filings and disclosures to be made by your Israeli company to ensure that your company always stay on the right side of the law. The annual returns are required to be filed along with the applicable fee to the respective government departments.
Major Post-Registration Companies Compliances in Israel
The major statutes governing post-registration company compliances in Israel are governed by the Companies Act, 1999; Companies Regulations 1999; Securities Act, 1968 and other applicable provisions:
- Submission of an Annual Report
The annual report of the company is an update of a privately owned company. It should not be confused with the financial balance of the company that is supposed to be submitted to the tax authority. The annual report can be submitted before the preparation of the financial statements of the company. No fee is charged for filing the annual report.
The company’s annual report can be submitted online if you are:
- A director of the company. You can file the report via GovID; or
- A smartcard holder and authorized to report for the company
In the case of liquidation proceedings of a company, the selected liquidator files the report on behalf of the company.
The following information must be updated in the annual report of the company:
- Company’s address
- Shareholders and shares owned by the company
- Distribution of shares by the company
- Details of the outgoing directors
- Details of the serving directors
- Other relevant documents
The following procedure has to be adopted to file the annual report of a company in Israel:
- Visit the online reporting portal of the Israeli Corporations Authority
- Enter the smartcard or GovID credentials to log in
- Select the existing company
- Click on the option of the annual report
- Follow the instructions to complete and submit the report
The documents are required to be submitted in the following cases:
- If you are submitting the annual report for the first time or if you are filing the details of a foreign corporation or a foreign citizen (such as filing of their passport numbers)
- If the bye-laws of your company prescribe that you need to submit your balance sheet
Every document that is submitted should be signed with the original signature and should be in the official language, unless otherwise specified.
If the documents are not signed, then the report will be filed immediately, and in case the documents are not signed, then the report will be filed within a period of 10 days from the date of receipt of the documents. A notification of approval is sent:
- Via email to the company’s official email address, if the same is updated in Form 9
- Via email to the person who filed the report
The notification of denial of the annual report shall be sent to the company’s official email address.
The following terms need to be mentioned in the annual report of a company in Israel:
- The company must mention its full address and not the PO Box number of the company
- You are not supposed to file an email as the address of the company. However, you can certainly add the email address of the company is there if a physical address mentioned in the report
- If the address of your company is not verified, then immediate approval of the application will not take place and will be forwarded for inspection by the authority
- If there is no street address, then the option of “no streets” should be selected in the form for inspection by the Corporations Authority
- Only the official PO Box number can be chosen as a mailing address for the company
- You are not required to choose an email address as an additional address
- A description of the company’s activities has to be mentioned
- Details of the composition of the company’s assets have to be furnished
- Details of the serving shareholders and directors have to be furnished
- The number of shares currently held by the shareholders of the company and details regarding the additional shares that may be allocated according to the balance held by the company
You need to provide your contact details along with an email address for notifications and status updates on your report filing.
Submission of the report
- You are required to read and confirm the declaration made in the report
- After making the submission, a new report is generated, and you will not be able to make any further changes to it
- Changes in the composition of the Board of Directors
In this compliance, the company is supposed to intimate the Registrar of Companies about the changes in the composition of the Board of Directors of the company:
This service is meant for those directors and authorised persons who are updated in the company and those who are registered in the government identification system or who possess a smart card issued by an approving authority.
A company has to notify the changes in the composition of the board of directors to the Registrar of Companies within a period of 14 days from the date of such change. In case a year has passed since the date of the change, you are required to notify the change in an up-to-date annual report that correctly reflects the state of the company after the change.
There is no need to attach additional documents to the application except in the following cases:
If there is a preliminary report on a foreign corporation or a foreign citizen or alternatively an update on the details of a foreign corporation or foreign citizen which exists in the company’s statement, then the company has to attach additional documents.
- Change of the company’s address
From the date of incorporation, every company is required to maintain a registered office in Israel where a notice regarding a company can be directed to the company. Therefore, every company must report to the Registrar of Companies about any changes in the name of the registered office. Notice of change in the name of the registered office has to be notified to the Registrar within a period of 14 days from the date of such change.
In this service, the company is allowed to update the changes in its official address details in the Companies Registry and submit a report about the same along with the changes in mailbox details for delivery.
An application has to be submitted online on the corporate website. This service is meant for the directors and the authorised persons to report the changes in the company. This service can be accessed through a smart card issued by an approving authority or through a government identification.
There is no need to attach any additional documents for reporting such changes. Moreover, there is no need to pay any additional charges for submitting a report for a change in the company’s address.
The official address of a company must include the full address of the company. The company’s email address can also be submitted. However, the mailing address shall only be the PO Box address. You are not supposed to select the option of “additional address” and not fill in the information that is not the official address of the company.
- Mergers of the companies
Reporting has to be done in case a company is absorbed, or several companies are absorbed into one company. This includes a target company which is absorbed and liquidated at the end of the merger. On the other hand, there is an absorbing company into which a target company is absorbed in the end of the merger process.
A company that has been declared a law-breaking company will not be allowed a merger procedure. To check the status of the company, one should first settle the fee obligations before submitting a request for a merger. A merger request is not passed by the approving authority before the deadline of the deadlines set by the law has passed.
- 30 days from the date of receipt of the decision of the general meeting on the merger as specified in the protocol in every merging company
- 50 days from the date on which the merger proposal is duly presented to the Registrar of Companies from every partner company in the procedure
Both the target company and the absorbing company have to submit the following documents:
Form 1 – merger proposal
All the merging companies are required to submit an original merger proposal to the Registrar of Companies within a period of 3 days from the date of the convening of their general meetings. All the proposals have to be signed by a number of existing directors of the submitting companies. The identity of the signatories has to be verified by a lawyer. While submitting a joint proposal, it must be ensured that the names of the companies submitted in the application are indicated clearly.
- Merger agreement
A merger agreement must be signed by both the target company and receiving company. Alternatively, a detailed confirmation regarding the main terms of the agreement can also be submitted. The documents have to be signed by the directors on behalf of all the merging companies. The documents have to be submitted as original or true copies of the originals.
- Minutes of the Board Meeting
All the merging companies have to come up with the minutes of the meetings of the Board of Directors. Alternatively, a document detailing the reasons given by the board can also be submitted. An original document signed by the incumbent director has to be produced as well by the incumbent director.
- Minutes of the General Meeting of the shareholders regarding the merger
The minutes of the meetings include the date of the meeting and details regarding the relevant main points. The minutes have to be produced as an original document that should be signed by the chairman of the assembly or by someone appointed on behalf of the assembly to sign the document.
- Auditors’ Consent of the merging companies
Consent of the auditor of the companies has to be obtained that his opinion on the financial statements of the company will be given to the creditors.
Form 2 – Notice of providing notices to the creditors
The notice to the creditors shall be signed by the director, and his signature shall be verified by a lawyer. All the merging companies are required to publish in at least 2 daily newspapers in the Hebrew language a notice to its creditors stating that a merger proposal has been submitted to the Registrar of Companies. If a company has material creditors or if its securities are traded on a stock exchange outside of Israel, then it has to publish a notice as mentioned above in a common newspaper in the country where most of the material creditors are located or where most of its securities are traded.
Every merging company is required to send its material creditors a notification regarding the submission of the merger proposal to the Registrar of Companies within a period of 14 days from the date of the merger proposal to the Registrar of Companies.
These notifications are not required to be submitted to the Registrar, but every merging company has to provide a notice to the Registrar about publishing a notice in the newspaper and sending the notice about the merger to its material creditors. This notice will be submitted in the form of an affidavit by a serving director of every merging company in Form 2. The director’s signature shall also be verified by a lawyer.
Affidavit from an official regarding lack of objection from the antitrust commissioner:
- It has to be mentioned in a notice that the company reported the merger to the antitrust commissioner, and the company received no notice of objection or condition to the merger from the end of the commissioner.
- If an objection has been received, then the Registrar has to be notified within a period of 3 days from the date of receiving the notice from the supervisor.
Affidavit from an office bearer of the merging company about the absence of any appeal to the court:
Every merging company has to submit an affidavit that the company did not receive any notification from the creditor regarding his objection to the merger or an appeal filed to the court raising objection about the proposed merger. This affidavit shall be signed by a lawyer.
Affidavit from an official regarding receiving the income tax approval and fulfilment of prerequisites:
- A statement has to be produced by an officer on behalf of every merging company confirming that all the prerequisites of the merger have been met by the company, including obtaining approval from the tax authorities in accordance with the applicable tax provisions.
- The official’s signatures shall be verified by a lawyer.
Copy of the merger fee payment confirmation:
Both the target company and the receiving company have to pay a merger fee as specified in the payment options chapter. While performing the exercise of the merger of several target companies with one receiver company, a fee has to be paid once by the receiver company, along with a fee for each target company.