Commercial & Civil

Commercial & Civil

What does Commercial & Civil Law include?

Commercial law deals with business-related legal matters such as contracts, transactions, and disputes between companies. Civil law covers legal disputes between private individuals or organizations over rights and obligations. Both involve non-criminal issues and focus on resolving conflicts or enforcing agreements.

A written contract clearly outlines the agreement between parties, including each side’s rights and obligations. It provides legal protection by serving as proof of the agreed terms, helping to prevent misunderstandings and making it easier to enforce the agreement if a dispute arises.
A breach of contract occurs when one party fails to fulfill their part of an agreement. The other party can seek legal remedies, such as compensation for losses or even enforcement of the contract. Often, people try to resolve such issues by negotiation first, but if that fails they may turn to the courts.
Many business disputes can be settled without a court trial by using alternative dispute resolution methods. For example, the parties might negotiate a solution directly, engage in mediation (with a neutral mediator helping both sides reach a compromise), or opt for arbitration (where a neutral arbitrator makes a binding decision). These approaches often save time and costs compared to a full court case.
It’s advisable to consult a lawyer early if you’re facing a significant dispute or legal issue. Early legal advice helps you understand your rights and options, and a lawyer can assist in drafting documents, negotiating a settlement, or representing you in legal proceedings if needed.
In a civil lawsuit, you can request different types of remedies. The most common is monetary compensation (“damages”) to cover any losses. Sometimes, a court can also issue an order requiring someone to do something or stop doing something (like an injunction) to resolve the issue.
Civil law involves disputes between private parties (individuals or companies) about rights and responsibilities, and usually seeks to provide a remedy to the injured party (like compensation). Criminal law deals with offenses against society where the state prosecutes, and the goal is to punish the wrongdoer (through fines, community service, or imprisonment) to protect the public.

Company Formation & Legal Support

How do I start a new company in Israel?

To start a company in Israel, you need to choose a unique company name and register the company with the Registrar of Companies. The process involves preparing and submitting incorporation documents (such as the company’s articles of association and details of the directors and shareholders) and paying a registration fee. Once approved, the company is officially formed and you receive a certificate of incorporation.

Forming a limited company (Ltd.) creates a separate legal entity, meaning the company’s debts and liabilities are generally separate from your personal assets – this is called limited liability. It also offers a more professional image and makes it easier to bring in partners or investors. In contrast, operating as a sole proprietor is simpler with less paperwork, but you personally bear all the business’s liabilities.

You must provide several documents and details when registering a company. These include the chosen company name (and a backup name in case the first choice is taken), identification details of the directors and shareholders, the company’s Articles of Association (bylaws), and the address of the registered office. All required forms need to be signed and submitted to the Registrar of Companies along with the registration fee.

A shareholders’ agreement (or founders’ agreement for startups) is a contract between the owners of a company that sets out their rights, responsibilities, and how the company will be run. It can cover how decisions are made, what happens if an owner wants to sell their shares, and how disputes are resolved. It’s not legally required to have one, but it’s highly recommended when there are multiple owners, as it helps prevent conflicts by clarifying expectations from the start.

Once a company is registered, it must meet ongoing legal requirements. For example, a company needs to maintain proper financial records and file annual returns or reports with the Registrar of Companies and tax authorities. It should also pay required taxes (like VAT and income tax) and follow corporate governance rules, such as holding annual meetings and keeping minutes. Staying on top of these obligations is important to avoid fines or penalties.

Ongoing legal support ensures your business remains compliant and protected as it grows. Having a lawyer or legal advisor means you can get guidance on new contracts, employee issues, regulatory changes, and any disputes that arise. This proactive approach can prevent minor issues from turning into major problems, giving you peace of mind that you’re meeting your legal obligations.

Legally, you are not required to hire a lawyer to register a company – you can technically file the paperwork yourself. However, many people choose to use a lawyer to make sure all documents are prepared correctly and that the company’s structure suits their needs. A lawyer can also provide valuable advice on legal implications and help avoid mistakes during the formation process.

Startups & Innovation Law

What legal steps should I take when starting a startup?

When starting a startup, it’s important to get your legal foundations in place early. Typically, you would form a company (to separate personal and business liabilities), set up a founders’ agreement among the co-founders, and ensure you protect your intellectual property (for example, registering trademarks or considering patents). Addressing these steps early on helps prevent problems as your startup grows.

Protecting your startup’s idea or technology involves using intellectual property rights. Depending on what you have, you might apply for patents (to protect inventions or unique technology), register trademarks for your brand name and logo, and use copyrights for software or content. Additionally, using Non-Disclosure Agreements (NDAs) when sharing information with others can help keep your idea confidential.

A Non-Disclosure Agreement (NDA) is a legal contract that requires someone to keep certain information confidential and not share it. Startups often use NDAs when discussing their business or technology with potential partners, employees, or investors, to ensure that sensitive information (like business plans or code) isn’t disclosed without permission. It’s a useful tool whenever you need to share details about your idea but want to protect it from being spread or copied.

 If your startup has more than one founder, it’s highly recommended to have a founders’ agreement. This agreement outlines how you and your co-founders will work together – covering issues like each person’s roles and responsibilities, the equity split (who owns what percentage of the company), decision-making processes, and what happens if someone leaves. Having these terms written down early helps prevent misunderstandings and conflicts later on.

When raising money from investors, there are several legal points to consider. You will likely negotiate a term sheet or investment agreement that outlines the investment terms (such as how much equity the investor gets and any special rights). It’s important to understand things like your company’s valuation, the control or voting rights you’re giving up, and any obligations you’re agreeing to. It’s wise to have a lawyer review and help negotiate these terms, as they can significantly affect the future of your business.

If your startup has a website, app, or provides any service to users, it’s important to have clear Terms of Service and a Privacy Policy. Terms of Service set the rules for users of your platform (covering what’s allowed, limits of liability, etc.), and a Privacy Policy explains how you collect and use personal data. Not only are these often required by law (especially the Privacy Policy if you handle personal information), but they also help build trust with your users.

Many startups offer early team members stock options as part of their compensation. Stock options give an employee or advisor the right to buy shares in the future at a fixed price, so if the company succeeds, those shares can become valuable. To do this, the company sets up a stock option plan that defines how options are granted and vest over time. It’s important to use proper legal agreements for such plans to ensure everything is clear and compliant with company law.

Associations and NGOs

What is a non-profit organization (amutah)?

A non-profit organization, in Israel often called an “amutah” (association), is a legal entity created to operate for a social, charitable, or public purpose rather than for profit. Unlike a business company, a non-profit does not distribute profits to owners or members; any income it generates must be used to further its objectives. Common examples include charities, community organizations, and public service groups.

To establish an amutah (non-profit association) in Israel, you need at least two founding members to register the association with the Registrar of Associations. The process involves choosing a unique name, defining the organization’s purposes, and submitting required documents such as the association’s bylaws (articles of association) and forms with details of the founders and the governing committee. Once the Registrar approves the application and issues a registration certificate, the amutah is officially formed as a legal entity.

The main difference lies in purpose and profit distribution. A non-profit (amutah) is established to serve a public or social goal and is not allowed to distribute profits to its members – any surplus must go back into the organization’s activities. A for-profit company, in contrast, exists to generate profit for its owners or shareholders. Additionally, non-profits operate under specific laws (they have members and a managing committee, and must use funds for their stated mission) whereas companies are governed by corporate law and focus on business activities and profit for shareholders.

An amutah is typically managed through its members and an elected committee (board). The highest authority is the General Assembly of members, which usually meets at least once a year to approve reports and elect a management committee (ועד מנהל) and an audit committee. The management committee handles the day-to-day running of the organization and makes decisions between general meetings, while the audit committee oversees finances and compliance. The amutah’s bylaws detail the governance structure and roles of these bodies.

Non-profit associations in Israel have ongoing legal obligations to ensure transparency and proper management. They must maintain proper financial records and submit annual financial statements and activity reports to the Registrar of Associations. They also need to hold an annual members’ meeting to approve the reports and appoint the committee and auditors. Compliance with these requirements (often referred to as maintaining “proper management” or nihul takin) is necessary to keep the amutah in good standing and eligible for certain benefits.

Yes. A non-profit (amutah) can generate income and pay reasonable salaries to employees or service providers, but it cannot distribute profits to members. Any income (from donations, grants, or services) must be used to advance the organization’s goals. Paying staff or covering project expenses is allowed as long as it supports the non-profit’s mission and the compensation is reasonable and within the organization’s budget and purpose.

Donations to an approved non-profit can be tax-deductible for donors if the organization has certification under Section 46 of the Income Tax Ordinance. This certification means the organization is recognized by the state as a public institution for the purpose of donations, allowing donors to receive a tax credit for their contributions. Not all amutot automatically have this status – the amutah must apply for it and meet certain criteria to receive Section 46 approval.

Wills & Estate Planning

What is a will and why should I have one?

A non-profit organization, in Israel often called an “amutah” (association), is a legal entity created to operate for a social, charitable, or public purpose rather than for profit. Unlike a business company, a non-profit does not distribute profits to owners or members; any income it generates must be used to further its objectives. Common examples include charities, community organizations, and public service groups.

To establish an amutah (non-profit association) in Israel, you need at least two founding members to register the association with the Registrar of Associations. The process involves choosing a unique name, defining the organization’s purposes, and submitting required documents such as the association’s bylaws (articles of association) and forms with details of the founders and the governing committee. Once the Registrar approves the application and issues a registration certificate, the amutah is officially formed as a legal entity.

The main difference lies in purpose and profit distribution. A non-profit (amutah) is established to serve a public or social goal and is not allowed to distribute profits to its members – any surplus must go back into the organization’s activities. A for-profit company, in contrast, exists to generate profit for its owners or shareholders. Additionally, non-profits operate under specific laws (they have members and a managing committee, and must use funds for their stated mission) whereas companies are governed by corporate law and focus on business activities and profit for shareholders.

An amutah is typically managed through its members and an elected committee (board). The highest authority is the General Assembly of members, which usually meets at least once a year to approve reports and elect a management committee (ועד מנהל) and an audit committee. The management committee handles the day-to-day running of the organization and makes decisions between general meetings, while the audit committee oversees finances and compliance. The amutah’s bylaws detail the governance structure and roles of these bodies.

Non-profit associations in Israel have ongoing legal obligations to ensure transparency and proper management. They must maintain proper financial records and submit annual financial statements and activity reports to the Registrar of Associations. They also need to hold an annual members’ meeting to approve the reports and appoint the committee and auditors. Compliance with these requirements (often referred to as maintaining “proper management” or nihul takin) is necessary to keep the amutah in good standing and eligible for certain benefits.

Yes. A non-profit (amutah) can generate income and pay reasonable salaries to employees or service providers, but it cannot distribute profits to members. Any income (from donations, grants, or services) must be used to advance the organization’s goals. Paying staff or covering project expenses is allowed as long as it supports the non-profit’s mission and the compensation is reasonable and within the organization’s budget and purpose.

Donations to an approved non-profit can be tax-deductible for donors if the organization has certification under Section 46 of the Income Tax Ordinance. This certification means the organization is recognized by the state as a public institution for the purpose of donations, allowing donors to receive a tax credit for their contributions. Not all amutot automatically have this status – the amutah must apply for it and meet certain criteria to receive Section 46 approval.

Lasting Power of Attorney

What is a Lasting Power of Attorney (Yipuy Koach Mitmashech)?

A Lasting Power of Attorney (in Hebrew, “Yipuy Koach Mitmashech”) is a legal document that allows you to appoint someone (called an agent or attorney-in-fact) to make decisions on your behalf if you become unable to make them yourself in the future. Unlike a regular power of attorney, which usually ends if you lose mental capacity, a Lasting power of attorney is designed to “last” and take effect during periods when you can’t make decisions due to illness, injury, or diminished mental capacity. It’s a way to plan ahead so that someone you trust can manage your affairs and care for you if you are not able to.

A regular power of attorney gives someone authority to act on your behalf, but it generally is only valid while you are still mentally competent and can typically be canceled at any time. It usually ends automatically if you become incapacitated. A lasting power of attorney, on the other hand, is specifically created to remain valid even if you lose the ability to make decisions. It only becomes active (or remains active) when you’re no longer able to handle your affairs. In short, the lasting power of attorney is a planning tool for potential future incapacity, whereas a standard power of attorney is for convenience while you are still capable.

 A lasting power of attorney in Israel can cover various areas of your life. It can authorize your agent to make financial decisions (like managing bank accounts, property, and paying bills), personal decisions (such as where you will live and day-to-day care matters), and medical decisions regarding your healthcare (though some people also prepare a separate document for specific medical directives). When you set up the document, you can choose which areas you want to include and give specific instructions or guidelines to your agent for making those decisions in the future.

A lasting power of attorney takes effect only if and when you can no longer make decisions for yourself (for example, due to dementia, a coma, or another condition that impairs your judgment). You remain in control while you are capable; the document just stays on standby. For it to come into effect, typically a doctor or relevant professional needs to certify that you are not capable of managing your affairs. The power of attorney must also be properly registered with the authorities (in Israel, with the Office of the Administrator General) ahead of time. Once those conditions are met, your appointed agent can step in and start making decisions on your behalf according to the powers you granted.

 In Israel, establishing a lasting power of attorney must be done through a lawyer who has special certification to prepare this type of document. The process involves discussing your wishes with the lawyer, choosing a trusted person (or people) to be your agent(s), and detailing what powers they will have and any instructions for them. The document is then signed in the presence of the lawyer (and often witnesses) and needs to be submitted (deposited) to the Office of the Administrator General for it to be valid. While you could plan your wishes yourself, involving a qualified lawyer is required to finalize and properly register the enduring power of attorney.

Any adult who wants to plan for the possibility that they might not be able to make decisions in the future should consider making a lasting power of attorney. It is especially relevant for older individuals or those with progressive health conditions, but unexpected accidents or illness can happen to anyone. By setting up this document, you ensure that if something happens, your affairs and personal matters will be managed by someone you trust, according to guidelines you set. It gives you control over future scenarios and can make things much easier for your family, avoiding the need for a court-appointed guardian.

Yes, as long as you still have mental capacity, you can change or cancel (revoke) your enduring power of attorney at any time. To make changes, you would typically create a new document or formally amend the existing one through your lawyer and re-submit it. To cancel it entirely, you usually need to provide a written notice of cancellation and inform both your appointed agent and the Office of the Administrator General. However, once you are already incapacitated, you cannot change or cancel it yourself (since you lack legal capacity at that point). In certain cases, a court can step in if there are issues with how an agent is handling your affairs.