preface

32
BUSINESS STRUCTURE
The Companies Law comprises two groups of regulations. First, the
mandatory (cogent) regulations applicable to all companies - whether
the company chooses to include them in its Articles of Incorporation or
not. The second group is the voluntary (dispositive) regulations,
considered to be acceptable to every company, unless specifically
amended.
Israeli companies are subject to the following principal rules and
limitations:
♦ Companies may acquire their own stocks or financing, e.g.
acquisition by others, subject to criteria and restrictions prescribed by
law.
♦ Generally, amendment of a regulation in the Articles of
Incorporation requires a standard majority of stockholders.
♦ Companies are required to prepare annual audited financial
statements, usually for the year ended December 31.
♦ In 2000, regulations were published granting concessions to public
companies with registered shares in foreign exchange markets.
♦ Among the regulations published in 2001, regulations concerning the
creditors’ approval of dividend distribution were specified.
♦ Regulations published in 2002 prescribe the procedure for
settlements between a company and its shareholders and/or creditors
and suspension of proceedings according to section 350 of the
Companies Law.
4.1.2.1. Public Company
♦ A public company is a company whose stock is listed on a
stock exchange or offered to the public in a prospectus, and
held by the public.
♦ The Articles of Incorporation should not consist of any
restrictions on the transfer of a public company's stocks.
♦ If a public company's stock is traded on the Tel Aviv Stock
Exchange (TASE), the company is required to:
♦ Publish annual audited financial statements and quarterly
non-audited (but reviewed by a CPA) financial statements.
♦ Appoint at least two directors, known as “Independent
Directors” who have no economic affiliation to the company
BDO Israel