Israel: Governing Laws/Bylaw Requirements


Governance and bylaw requirements vary depending on incorporation type.


Associations are required to submit the following the the Registrar:

  • Annual financial statement
  • Annual director’s report
  • Annual report on five highest salaries in the association
  • Changes in board membership, audit committee, or external auditor
  • Changes to the by-laws
  • Any legal claims presented against the association or its board members (in their capacity as a board member).

Public Benefit Companies (“PBCs”)

PBCs must indicate their status by appending “Public Benefit Company” or “PBC” to the end of their names. PBCs share the same reporting requirements as associations, and depending on individual situations, may involve additional requirements as well.

Public Benefit Foundations (PBFs)

PBFs have relatively more stringent requirements, as compared with private organizations. PBFs must grant at least 5 percent of its endowment (or 2 million shekels, whichever is less) on an annual basis. PBFs must have one independent director.

Similar to PBCs, PBFs must submit annual reports to the Registrar. In addition, a PBF is required to report on:

  • Policy and criteria for funding
  • Organizations that receive funding (e.g., rationale for funding, assessment, etc.)


Private Companies

Private companies in Israel are required to appoint an external auditor (i.e., certified public accountant) at the shareholders’ general meeting. The auditor should approve the annual financial statements before the board of directors.

Public Companies

Public companies are governed by the Companies Law 1999 and Securities Law (1968), which covers corporate governance and securities regulation. Among other requirements, they are required to:

  • Publish annual audited financial statements and quarterly financial statements reviewed by a certified public accountant.
  • Appoint at least two directors independent directors that are not financially tied to the company or have extensive relationships with company management.
  • Appoint an audit committee (at least three members), including all independent directors.
  • Report on potential conflicts of interest between the company and controlling shareholders
  • Disclose information regarding exposure to market risks
  • Publish information on directors with accounting and financial skills
  • Disclose valuation information in financial reports regarding significant assets

For a comprehensive list of reporting requirements, please consult a lawyer or accounting professional.


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