A corporation is a separate legal entity, established by one person or a group of people for a specific purpose and guided by corporate law.
As such, the corporation has rights and obligations, is authorized to contract with third parties, and can be sued and sue in its name.
Corporations are divided into two main groups:
Public corporation – Established by law. Under state control and operates in the public sphere, for example: the Postal Authority, the Bank of Israel, and municipalities.
Private corporation – Its field of activity is private law. Four main forms of association are recognized in this group: company, partnership, cooperative society, and non-profit organization.
Types of corporations
Company
This is the most common type of corporation. Founded by one person or a group of people.
Establishment method: Submitting an application for registration with the Registrar of Companies, who examines the eligibility of the company's objectives in terms of legality, morality, and compliance with public regulations. A copy of the company's articles of association, a declaration of directors, and a declaration of owners must be attached to the registration application. Stocks. If the company decides to limit Shareholder equity This should be stated in the regulations, and then the word is added to its name. Ltd..
The applicable law: Companies Ordinance and Companies Law.
How it works: The company's shareholders, who constitute the general assembly, provide the capital and benefit from the company's profits after settling debts to creditors. The board of directors is appointed by the shareholders and serves as the management body, responsible for setting the company's policies.
A public company trades its shares on stock exchanges in Israel or abroad, while companies that are not publicly traded are considered private.
Cooperative society
This is a nonprofit corporation, based on the principles of equality and cooperation.
Establishment method: Registration with the Registrar of Cooperative Societies. A minimum of seven members are required for its establishment.
The applicable law: Cooperative Societies Ordinance.
partnership
It concerns a group of people who jointly run a business for the purpose of making a profit.
Establishment method: partnership Registration is mandatory, but it is not a condition for its establishment and existence, which are based on an express or implied agreement. The maximum number of partners in a partnership is generally twenty.
The applicable law: Partnerships Ordinance.
How it works: General Partnership – its partners have unlimited liability towards third parties, with the rationale being to impose personal responsibility on the partners for negligent conduct.
Limited partnership
This partnership allows for limited liability for some of its partners. There is at least one general partner, who bears all the partnership's liabilities, and at least one partner whose liability is limited to the extent of the capital they have contributed.
Non-profit organization
This is a corporation, established as a non-profit.
Method of establishment: At least two adult individuals are required to form an association. The condition for establishment is Registration in the Register of Associations After presenting the details of the association along with an affidavit signed by its founders. For approval, the Registrar of Associations examines the legality of the association's objectives and verifies that it does not negate the existence of the State of Israel or its democratic character. The name must include the words "Amutah" or "Amutah Merushamah" (A.R.).
The applicable law: Associations Law.
How it works: Every association appoints a general assembly, a board of directors, and an audit committee or auditor.
Legal assistance
Lawyer The corporate department will assist with registering the incorporation with the relevant registrar, including collecting and submitting the required documents. When establishing a non-profit organization, a lawyer will ensure that it is established for a legal purpose.
The lawyer will subsequently accompany the corporation through the establishment and ongoing operational procedures, up to the dissolution of the corporation if necessary.
