The business landscape in Israel offers various registration and operational options, the most complex of which is a private limited company (Ltd.). In addition to general legal principles, Ltd. companies operate under strict regulations and obligations enshrined in the Companies Law. Attorney Adi Cohen brings nearly two decades of experience in advising and representing shareholders and controlling interests in their day-to-day operations, company formation and registration processes, mergers, transfers of control, capital and asset realization, and voluntary liquidation of companies.
Attorney Cohen’s services are also available in English due to her proficiency in laws and contracts, as well as her extensive knowledge of the applicable law in the State of New York.
What is the Companies Law, and what is its purpose?
The main and most significant difference between a business and a private limited company is in legal liability and the owners’ status before the law. While a sole proprietorship or exempt business owner is responsible for all liabilities, rights, and business activities, a private limited company is a separate legal entity independent of its owners.
This status of a private limited company and corporations can create conflicts of interest between the motives of shareholders and controlling interests and those of other stakeholders, such as employees, customers, suppliers, investors, and others, as well as the public interest. This gave rise to the regulation of activities, conduct, obligations, and rights of controlling interests through the Companies Law.
The Companies Law, also known as the Corporate Law, deals with the establishment and incorporation of companies under principles of structure, bylaws, and distribution of powers, roles, and responsibilities, the status of shareholders with respect to changes, sale of rights and transfer of ownership, acquisition and purchase of a company or part of it, mergers and business activities, capital management, allocation and distribution of profits, corporate taxation, raising capital, investors and issuance of securities, public transparency, and proper governance.
One of the most important tools in managing a company is ongoing legal representation and comprehensive professional advice provided by a leading corporate lawyer who is experienced and knowledgeable about the unique issues and requirements that apply to companies in Israel and those that apply to dual-listed companies operating abroad.
Our Firm’s Areas of Expertise in Corporate Law
Companies and corporations in Israel regularly rely on our firm for the management of their business activities, as well as for unique situations involving significant changes in the company’s structure, ownership, and control, complex transactions, and dealing with claims and risks.
Among our firm’s responsibilities:
- Anchoring Partnerships through a Founders’ Agreement: The operation of a company born out of the initiative and joint ownership of two or more entrepreneurs can lead to conflicts and complex issues down the road, which are not always anticipated and resolved in advance. Drafting a founders’ agreement during the planning and establishment stages of the company is intended to help manage issues and disagreements in the future in a way that ensures the best interests of the company while protecting the interests of its founders. A founders’ agreement drafted and prepared by a skilled corporate contracts attorney will address the principles of company management, shareholder powers, rights and obligations imposed on each partner according to their status in the company, guiding principles for managing issues and disputes, and providing solutions for various scenarios that may arise in the future.
- Company Formation: Establishing a private limited company or changing status from a sole proprietorship to a private limited company, including providing advice and guidance, registering the company with the Companies Registrar, holding a shareholders and control assembly, appointing officers, and drafting and preparing company bylaws as required by law.
- Contract Management: Reviewing conduct with external entities as needed, providing legal advice and guidance in determining policies, and drafting and preparing contracts with investors, suppliers, and others.
- Conflict Management: Providing guidance, advice, and representation in managing conflicts between shareholders and controlling interests, between shareholders and managers and officers in the company, and with investors, creditors, and other parties, in accordance with the requirements and regulations enshrined in the Companies Law. This includes meeting the reporting and transparency obligations imposed on the company according to its areas of activity and status before the legal authorities and/or the public.
- Raising Capital and Investors: The unique status and legal liability that separates the company from its owners makes it risky in the eyes of potential investors seeking legal securities, as well as financial institutions and credit sources concerned about being left in a position of creditors without a party to sue and collect from. A skilled and knowledgeable corporate lawyer will assist the company he represents by translating its business successes, status, and assets into securities that attract investors, issuing and selling shares in the company while protecting the controlling rights of its owners, maximizing credit sources for the company’s growth needs, and structuring operations, capital raising, and loan agreements, and the distribution of profits and/or repayment of loans within a contractual framework.
- Legal Advice and Special Transaction Support: As mentioned, a private limited company is subject to the Companies Law, which, among other things, defines the obligation of unique conduct, with an emphasis on managing special transactions such as those conducted with interested and related parties, family members, or even the shareholders themselves. This includes real estate transactions—purchasing or selling real estate by the company, procurement transactions requiring exceptional investment that does not align with the company’s regular operating expenses, long-term contracts involving the company’s commitments regarding service provision, supply of goods, import, export, warranty provision, and more. Such transactions are conducted under strict principles designed to ensure decision-making based on growth objectives, good faith, and the company’s responsibility to meet its obligations.
- Dividend Distribution: Distributing the company’s profits among shareholders and, as decided, among company officers. Managing the distribution under the principles of the Companies Law, which stipulates that dividend distribution must be made from accumulated profits and without risking the company’s solvency, with the approval of the board of directors and in accordance with the company’s bylaws.
- Legal Representation: A private limited company may be the subject of tort claims, civil lawsuits related to conduct and contracts with interested parties, employees, competitors, and others. Comprehensive and professional legal representation will help both in preventing and repelling frivolous claims and/or claims primarily aimed at unjustly profiting from the company. If necessary, it will provide professional legal representation and defense for the company before the legal authorities and courts.
Corporate law is a particularly complex legal field, based on a combination of various liabilities and regulations found in broader laws such as contract law, commercial law, and tax laws, as well as the unique obligations imposed on companies in Israel. When seeking representation and corporate law services, it is essential to ensure that the intended representative possesses the extensive knowledge and experience required, is available and accessible to the company’s needs, and has the reputation and personal abilities to ensure ongoing legal representation and support, with the company and its interests at the forefront.
Adi Cohen Law Firm is a professional boutique firm specializing in civil and commercial law, providing support and representation for private limited companies, and offering comprehensive legal services at the highest professional standards.
