Israel Company Law 1999

Part III: Structure of the Company

Chapter 1: Organs of the Company, their Powers and the Liability for their Acts

Article A: Organs

46. The company’s organs are the general meeting, the board of directors, the general manager and any person whose acts in any given matter are considered by law or by virtue of the articles of association to be the acts of the company with regard to the matter concerned.

The organs

47. The acts and intentions of an organ shall be the acts and intentions of the company.

Acts of an organ like acts of the company

Article B: Division of Powers Among Principal Organs

48. (a) The general meeting shall have the powers specified in Article A of Chapter 2.

(b) The board of directors shall have the powers specified in Article A of Chapter 3.

(c) The general manager shall have the powers specified in Chapter 4.

(d) All organs of the company shall have all auxiliary powers required to exercise their powers.

Powers of organs

49. The board of directors may exercise any power of the company not granted to any other organ by law or by the articles of association.

Residual power

50. (a) A company may prescribe provisions in its articles of association to the effect that the general meeting may assume powers conferred on another organ and that the powers granted to the general manager be transferred to the board of directors, for any particular matter or period of time.

(b) Where the general meeting has assumed powers conferred by this Law on the board of directors, the shareholders shall be liable and bound by the liability and duties of directors regarding the exercise of such powers, mutatis mutandis, taking into consideration their holdings in the company, their participation in the general meeting and the manner in which they voted.

Transfer of power among organs pursuant to articles of association

51. The board of directors may instruct the general manager how to act in a given matter; where the general manager has not fulfilled such instruction, the board of directors may exercise the power required to fulfill the instruction in his stead, even if there is no provision for such in the articles of association.

Assuming powers of general manager

52. (a) Where a board of directors is precluded from exercising its powers, and the exercise of one of its powers is essential for the proper management of the company, the general meeting may exercise it in place of the board of directors, even if there is no provision for such in the articles of association, for so long as the board of directors is so precluded, and provided that the general meeting has determined that the board of directors is indeed precluded from so acting and that the exercise of the power is essential; the provisions of section 50(b) shall apply to the exercise of the powers of the board of directors by the general meeting.

(b) Where the general manager is precluded from exercising his powers, the board of directors may exercise them in his place, even if there is no provision for such in the articles of association.

Organ that is precluded from fulfilling its role