Articles - Corporate law

 

In this page you will find articles on issues regarding corporate law in Israel. We will add more articles as they would be published. For more information on the article issues you are welcome to visit our claims page – corporate.

 

Please be aware that while we did translate the reviews, the actual articles are not yet translated. We will do our best to translate all the articles as soon as possible.

 

 

Discrimination/swindling of the minority in companies:

 

Often especially in small and medium private companies, majority shareholders have almost complete control in the company. In some cases, the majority shareholders can act in the company as if they are the only owners, while ignoring their duties by law as shareholders and in denial of the minority. In those cases section 191 in the Israeli corporation act comes to their aid and gives the Israeli courts the power to correct the injustice caused to the minority shareholders.

 

 

Tax returning and the rollover defense:

 

Article 6 of the Israeli indirect taxes act (tax paid extra or deficient) 1968  Stipulates that a business or a company  who paid more taxes than they should have will not get a tax return if they rolled on their over paid taxes to the consumers (this is the "rollover protection"). The idea behind the rollover protection principle is to prevent an unjust enrichment - the legislature stated that if the business clients already compensated it for his over paid taxes he can't get a second compensation – a "double return" from the state because then there will be an unjust enrichment of the business. The question remains what about the unjust enrichment of the state who gets to keep the over paid taxes illegally?  Unfortunately this dilemma was nor fully answered by the Israeli Supreme Court

 

 

"Raising the screen" behind the company shareholders:

 

The principle of the judicial separate personality between the company and the limited responsibility of the shareholders and/or organs of the company is a basic principle in the Israeli corporate law. This Principle states that between the company and the shareholders and/or organs exist a judicial "screen" and one cannot associate the company debts (or rights) to shareholders or organs. This article will discuss the exceptional, "Raising of the screen" – the association of the company debts to the shareholders. We must emphasize that this procedure will not be taken lightly by the Israeli courts, and for them to instruct that one should point a substantial and special circumstances that justify this.

 

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