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1. Two or more persons who are adults, who wish to incorporate as a body corporate for a lawful objective not aimed at distribution of profits to its members, may establish an Amuta (A Charity); an Amuta will be constituted upon registration in the Register of Amutot.

The Authority to Establish an Amuta (A Charity) (Amended 2005)

2(a) An application for registration of an Amuta will be submitted by the founders to the Amutot's Registrar (hereinafter: "the Registrar"), indicating the name of the Amuta, it's objectives, its address in Israel, and the names, addresses and identity numbers of the founders; an affidavit, signed by all founders, will be attached to the motion, stating their willingness to found an Amuta, as mentioned in the application, and to serve as members of the Amuta's board.

(b) Following submission of the application, and as long as the Amuta has yet to be registered, the Registrar will acknowledge any motion for change or amendment of any detail aforementioned in Subsection (a) if signed by a majority of the Amuta founders who signed the original application; provided that it has been proven to the satisfaction of the Registrar that notification of the decision to file a motion for change or amendment has been sent to all founders by registered mail at least 14 days prior to the motion's submission date.

Application for Registration of an Amuta (Amended 1996)

3. An Amuta will not be registered if any of its objectives negate the existence or democratic character of the State of Israel or if there are reasonable grounds for concluding that the Amuta will be used as a cover for illegal activities.

Restrictions to Registration of an Amuta.

4. (a) An Amuta will not be registered under a name likely to mislead or to offend public policy or the public's feelings.

(b) An Amuta will not be registered under a name identical to one of the following, or similar to such a name, to an extent which is likely to mislead:

(1) A body corporate registered in Israel;

(2) A body corporate that has been registered in Israel, and its registration has been canceled, and two years from the date of registration of the said body corporate have yet to pass;

(3) an Amuta in the process of registration.

(c) Where an Amuta has been registered under a name under which, according to Subsections (a) or (b), it should not have been registered, the Registrar may demand it to change its name; if the Amuta does not change its name within the time prescribed in the Registrar's demand, the Attorney General may apply to the Administrative Court for an order requiring the Amuta to change its name.

Restrictions  on an Amuta's Name (Amended 1996, 2000)

5. Where an application under Section 2 has been submitted, the Registrar will register the Amuta in the Register of Amutot unless he considers himself prevented from doing so according to Section 1, 3, 4(a) or 4(b).

Registration of an Amuta (Amended 1996)

5A. (a) Where an application in accordance with Section 2 has been submitted for registration of an Amuta whose purpose is raising funds for saving of human lives, and the Registrar has not registered it in the Register of Amutot within two weeks of the submission of the application, not due to refusal to register it, its founder may petition to the Minister of Interior* to instruct regarding the method of checking the application and registration of the Amuta within a period not longer than 14 days from the date of the aforesaid instruction.

    *  (since 12/12/2004 - The Minister of Justice)

(b) Sections 1,3 and 4 will apply to checking and registering the Amuta as detailed in Subsection (a).

(c) The validity of an Amuta's registration under Subsections (a) and (b) is for one year.

(d) If a year has passed since the temporary registration of an Amuta, and an Amuta has not been registered in accordance with Subsection 5 - all of its assets, following full payments of its debts, will be transferred to another Amuta, to be determined by the Administrator General appointed in accordance with the Administrator General Law - 1978, and which purposes are similar, in his opinion, to the purposes of the Amuta whose temporary registration's validity has expired.

Temporary Registration (Added 1988)

6. (cancelled)

Appeal (Amended 2005)

7. Upon the registration of an Amuta, the Registrar will publish notice thereof in the Reshumot (the Official Gazette) and give the Amuta a notice of registration; The aforesaid notice will be decisive evidence of the legality of the Amuta's founding.

Publication and Notice of Registration

8. An Amuta is a body corporate from the date stated in the notice of registration, and will be competent in respect of any right, duty and legal action.

Amuta as Body Corporate

8A. The name of the Amuta will be mentioned in every document, sign or publication on its behalf, in its full form as it appears in the notice of registration; the name will be mentioned in uniform letters, without abridgements and abbreviations and will state at its end the word "Amuta", "Registered Amuta" or "(R"A)".

Usage of the Name (Amended 1996)

9. Every Amuta will have articles of association, as detailed in this Chapter; the articles will have the effect of a contract between the Amuta and its members and amongst the members themselves.

The Articles of Association - as a Contract (Amended 1996)

10. The founders may submit articles of association for the Amuta to the Registrar; where the founders did not submit articles of association to the Registrar as aforesaid, the standard articles of association set out in the First Schedule will be deemed as the articles of association of the Amuta.

Registered Articles of Association and Standard Articles of Association (Amended 1996)

11. An Amuta may change its articles of association, its name and its objectives by a resolution of the general assembly passed by a majority of the votes of those entitled to vote thereat; any resolution according to this section will require registration by the Registrar and the provisions of Sections 4 to 7 and 10 will apply mutatis mutandis; the resolution will have effect from the date of its registration by the Registrar.

Change of Articles of Association, Name and Objectives (Amended 1996)

12.(a) Every articles of association or change in the articles of association submitted to the Registrar in accordance with Sections 10 and 11 will be registered by it if found to comply with Sections 15 to 20, 23, 27 to 39 and 43 to 47 and Sections 1(a), 1(b), 7 and 12 of the standard articles of association in the First Schedule.

(b) Articles of association submitted to or registered by the Registrar, in which a matter addressed in the standard articles of association is not addressed, is partially addressed or is addressed in a faulty manner therein so that it conflicts with the prescriptions of sub-Section (a), that which is unaddressed or faulty will be subject to the instructions of the standard articles of association.

Content  of Articles of Association (Amended 1996)

13. The articles of association may limit the power of the Amuta to change its articles, name or objectives, to require a greater majority for the change than is prescribed in Section 11 or attach other conditions thereto.

Restriction as to Powers.

14. Notice of any change of the address of the office of the Amuta will be submitted to the Registrar, who will register the change.

Change of Address

15(a) Any person who has reached the age of seventeen and any body corporate has the legal capacity to be members of an amuta.

(b) Irrespective of the aforesaid in article 4 of the Legal Capacity and Guardianship Law -1962, joining of a minor to an Amuta and voting by a minor who is a member of the Amuta in the General assembly, are not subject to the consent of his guardian.

Legal Capacity (Amended 2005)

16. The conditions of membership of an amuta, expiration of membership, admission of members, resignation and expulsion of members will be in accordance with the provisions of the articles of association; however -

(1) the resignation of a member will be subject to no condition but reasonable advance notice;

(2) a member will not be expelled save for reasons set out in the articles and after being given an appropriate opportunity to state his case.

Conditions of  Membership (Amended 1996)

17. Membership of an amuta is personal, not transferable and not inheritable.

Character

18. An amuta will maintain a register and record each member, his address, identity number, the date of commencement of his membership and date of expiration of his membership.

Registry of Members

19(a) Every amuta will have a general assembly, a board of directors and an auditing committee, and may have additional agencies as provided in its articles of association.

 (b) The general assembly may decide that an auditor or a body approved for this purpose by the Registrar (both hereinafter - "the auditing body") will be appointed instead of an auditing committee.

(c) (1)  Without derogating from the instruction of Subsection (b), an Amuta whose annual turnover exceeds NIS 750,000 is required to appoint an accountant;

(2)  The aforesaid amount specified in Section (1) will be linked to the consumer index publicized by the Central Bureau of Statistics; the Minister of Interior* will publicize the aforesaid amount in the Reshumot (the official Gazette) at the beginning of February every year, as adjusted for that year;

(3) "Turnover" - as defined in the second addendum; 

   "accountant" - including C.P.A. associations, C.P.A. companies  or any other legal body corporate of accountants.

Mandatory and Non-Mandatory Agencies (Amendment 1996)

20. (a) A regular general assembly of members of the Amuta is to be held on dates prescribed in the articles and no less than once per year.

(b)  The board may convene an extraordinary general assembly at any time, and must do so upon the written demand of the auditing committee, of the auditing body or of  one tenth of all members of the Amuta.

(b1) Where a board has not a convened lawfully demanded general assembly, within twenty one days of submitting a demand according to Subsection (b),  the demanders are authorized to convene it themselves, provided that the meeting being held within three months from the date on which the aforesaid demand was submitted; the meeting will be convened, as far as possible, in the same manner in which general assemblies are convened by the board.

 (b2)  A general assembly convened as aforesaid in Subsection (b1), the Amuta will cover reasonable costs incurred by the demanders and will charge the board members responsible for the failure to convene it; the Amuta is also authorized to deduct the costs from monies due or which will become due by the Amuta to the aforesaid board members.

(c) Where a general assembly has not been convened in accordance with the provisions of this Section, the Registrar may convene it or appoint a person to do so.

Dates of Assembly (Amendment: 1996)

21. At a general assembly, every member will have one vote, and voting will be personal, unless otherwise provided by the articles of association.

Voting

22. (a)  The decisions of the general assembly will be passed by a simple majority of those voting unless otherwise provided by this Law or the articles of association.

     (b) The Amuta is authorized to prescribe in its articles that the decisions signed by all members of the Amuta will be seen for all intents and purposes as decisions reached by the general assembly, excepting the decisions prescribed in articles 11, 36 and 43(a).

Majority (Amendment: 1996)

23. At every general assembly, minutes will be kept. The minutes will be signed by the chairperson of the meeting and upon being signed by him will be prima facie evidence of their contents and of the validity of the convening and conduct of the meeting and the passing of its decisions.

Minutes

24. (a) Where the number of the members of an amuta exceeds two hundred, it may prescribe in its articles that its general assemblies will be by way of meeting of representatives elected by the members; the method and manner of election of representatives will be in accordance with the provisions of the articles of association.

    (b) For the purpose of this Law the standing of a meeting of representatives is the same as that of a general assembly, and the rights of  the Registrar in accordance with article 20(c) are applicable to the holding of aforesaid election, mutatis mutandis.

Meeting of Representatives (Amendment: 1996)

25. The board of directors will manage the affairs of the amuta, and it will have every power not reserved by this Law or the articles of association to the general assembly or another agency of the agencies of the amuta.

Authority

26. (a) The board will be elected by an ordinary general assembly unless the articles of association otherwise provide, including a provision according to which:

   (1)  All or part of the members of the board  will be appointed by another person or body;

   (2)  A person holding an office defined in the articles will be a member of the board of directors so long as he serves in the said defined office; the founders will serve as the board of directors until election of the first board.

    (b)  Whenever an amuta has no board of directors elected under Subsection (a), the Registrar may appoint a member or members of the amuta to serve as a board of directors. 

    (c)  A member of the board of directors who has completed his term but no replacement has been elected, as prescribed in Subsection (a), will continue to serve as a board member and will maintain all of the authorities provided to a member of the board; the prescriptions of this subsection will not apply to the board member who resigned or a member of the board who was removed from office.

Appointment of Board of Directors (Amendment: 1996)

26A.  The general assembly is authorized to decide on remuneration to the members of the board of directors; if it has decided that remuneration is to be paid, it will prescribe the remuneration amount.

Wages of the Members of the Board of Directors (Amendment: 1996)

27. The members of the board of directors will act in the best interest of the amuta, within the framework of its objectives and in accordance with the articles of association and the resolutions of the general assembly.

Duty of a Member of the Board of Directors

28. The general assembly may at any time remove the board of directors or member of the board of directors from office. In the event that the general assembly has removed a board from office, the removal will not take effect unless the general assembly has elected another board of directors.

Removal of Board of Directors or Member of the Board of Directors (Amendment: 1996)

29. An amuta must keep a register of the members of the board of directors in which the name, address, identification number, date of taking office and date of termination of office of each member is recorded.

Register of the Members of the Board of Directors

30.  The auditing committee or auditing body will review the Amuta's financial and economic matters and its accounting books, and will present its recommendations to the general assembly with respect to approval of financial report.

Offices

31.  The auditing committee or audit body will be elected by an ordinary general assembly.

Constitution

31A.  An Amuta required to appoint an accountant as prescribed in Section 19(c) will be subject to the following instructions:

(1)  An accountant will be elected at the annual general assembly and will serve in his office until the following annual general assembly;

(2)  The board is authorized, at any time prior to the first annual general assembly, to appoint the Amuta's first accountant, who will serve in his office until the first annual general assembly;  If the board did not appoint an accountant as aforesaid, the Amuta may appoint the first accountant during its first general assembly.

(3)  The Amuta may approve appointment of the accountant by the board during the first general assembly, or may appoint an accountant by motion of one of the Amuta members, so long as the members of the Amuta and the accountant in his stead are sent notice of the motion to appoint another accountant in his stead at least seven days prior to the date of the assembly.

Appointment of Accountant (Amendment: 1996)

31B. In the event that an accountant is not appointed at the annual general assembly of the Amuta required to appoint an accountant as prescribed in Section 19(c), the Registrar is authorized, at the request of one member of the Amuta, to appoint an accountant for that year and to prescribe the remuneration to be paid for said services. 

Appointment of Accountant by the Registrar (Amendment: 1996)

31C. (a)  A person will not be appointed as accountant as prescribed in Section 31A(2) unless a member of the Amuta has notified the Amuta prior to the annual general assembly of his intention to propose the office of accountant to said person.

(b) Notification in accordance with Subsection (a) will be given no later than the date prescribed in the articles of association of the Amuta for invitation of the members to a general assembly.

(c) The Amuta will send a copy of the notification it received as prescribed in Subsection (a) to members of the Amuta and the accountant about to complete his tenure, at least seven days prior to the date which the general assembly is convened.

(d) The orders prescribed in this Section will not apply to the reappointment of an accountant who is about to complete his tenure.

Procedure of Appointment of Accountant by the Registrar (Amendment 1996)

31D.  If the office of accountant is vacated, the board of directors is authorized to appoint another in his place, who will serve until the upcoming general assembly is convened and the remaining accountants are authorized to continue and act as the accountants of the Amuta.

Vacated Office of Accountant (Amendment: 1996)

31E.  The Amuta will prescribe the accountant's remuneration in the general assembly, however the board of directors is authorized to prescribe remuneration of an accountant who has been appointed prior to the first annual general assembly or appointed in accordance with Sections 31A(2), 31D or 37(b).

Wages of Accountant (Amendment: 1996)

32.  A person will not at one and the same time serve as a member of the board of directors and as a member of the auditing committee or audit body.

Exclusivity of Tenure

33(a)  There will not serve as a member of the board or member of the auditing committee -

(1)  a person who is not a member of the Amuta;

(2) a person who serves the Amuta for remuneration otherwise than as a member of the board or member of the auditing committee, as the case may be.

(3) a minor or whosoever has been declared an incapacitated person or bankrupt;

(4)  a person who has been convicted by final judgement of a crime in accordance with Sections 290 - 297 and 414 to 438 of the Penal Law - 1977, or of another crime which in the opinion of the Attorney General is an ignominious crime;

(5) a body corporate, however a representative of a body corporate who is a member of an Amuta may serve as a member of the board of directors even if he himself is not a member of the Amuta.

(b) A person who serves the Amuta for remuneration other than as a member of auditing body will not serve as a member of the auditing committee or audit body.

Disqualification for Tenure (Amendment: 1996)

34. The validity of an act of a member of the board of directors, a member of the auditing committee or a member of the audit body will not be impaired by a defect in the member's election or appointment.

Validity of Acts

35. (a) An Amuta will keep account-books which will fully and faithfully reflect its transactions and financial position, and which will include at least the details which appear in the second addendum, mutatis mutandis.

    (b) Each member of the board of directors, the auditing committee or the audit body as well as the accountant appointed to the Amuta, may at any time inspect the account-books of the Amuta and the documents relating to entries therein and obtain from any member of the board of directors and any employee of the Amuta any document in their possession and any information which, in the opinion of the member of the board of directors, auditing committee or audit body, is required for the carrying out of his functions.  

Account Books (Amendment: 1996)

36. (a) The board will annually prepare a balance sheet and income-and-expenditure report (hereinafter "financial report") of the Amuta every tax year, which will be fully detailed in accordance with the list which appears in the second addendum; the financial report will be submitted to the auditing committee or audit body no later than two weeks prior to the date of the meeting of the general assembly or at an earlier date prescribed by the articles of association, and brought before the general assembly for its approval.

(b)  The board will attach to the financial report a notice with full and accurate details of all payments made by the Amuta or which it has undertaken to pay in the year for which the financial report is submitted, for each of the five recipients of the largest remunerations paid by the Amuta including details of termination conditions; and all, whether the aforesaid payments made or undertaken to pay were given to the recipients of aforesaid remunerations or whether given to another on their behalf or for their employment; for the purpose of this Section "payments" - amounts of money and everything of monetary value, loans, securities or other rights and any other benefit.

(c) The financial report will be prepared in accordance with accepted accounting and reporting standards suitable to the condition and circumstances of the Amuta, and will appropriately reflect data included in the account-books prescribed in Section 35(a)

(d) The original financial report or a legally approved copy thereof will be submitted to the Registrar no later than 31st of January of the second year after the period of the financial report, signed by two members of the board of directors.

Financial Report (Amendment: 1996)

37. (a) The financial report of an Amuta required in accordance with Section 19(c) to appoint an accountant will be  submitted to the general assembly audited by the accountant.

(b) The Registrar may, at the request of the auditing committee, or one tenth of all members of the Amuta, or on his own initiative, direct that a financial report which is not subject to auditing in accordance with Section 19(c), be submitted to the general assembly after being audited by an accountant appointed by the board of directors with the approval of the Registrar.

(c)  The accountant will participate in all general assemblies of the Amuta in which accounts he has audited or reported are submitted, and will submit any notice or explanation he deems with regard to said accounts.

(d)  The Registrar, having acted in accordance with Subsection (b) may, should he see the need, order a postponement of the general assembly to a date to be prescribed by him.

Auditing by an Accountant (Amendment: 1996)

38. (a)  The Amuta is required to submit to the Registrar original or legally authorized copies of the following documents, signed by two members of the board of directors:

(1)  Notification of change of address of the Amuta, election of a member or appointment of a member of the board of directors, auditing committee or the auditing body or cessation of their tenure and of appointment of an accountant;

(2)  Minutes of the general assembly decision to amend its articles of association, its name and its objectives in accordance with Section 11, or decision by the general assembly or the board of directors with respect to authorized signatories on behalf of an Amuta;

(3)  Minutes of the general assembly's decision to approve a financial report submitted before it, together with the financial report and recommendations of the audit committee or the auditing body, and if an accountant has been appointed, his opinion on the financial report will be a attached;

(4)  Notification of filing of claim against the Amuta or against a member of the board of directors in his capacity as a board member; the notification will include the names of the parties, the Court to which the claim was filed, the cause of action and file number;

(5)  Minutes of the general assembly's decision on voluntary dissolvement and on the appointment of a liquidator in accordance with Section 43(a);

(6)  Financial reports in accordance with Section 36(d);

(7)  Other documents prescribed by the Minister of Interior* in the ordinances.

(b). (1)  The documents specified in paragraphs (1) through (5) will be submitted within two weeks from the date of reaching the decision or from the date of the occurrence;

(2)  The decision as described in paragraph (5) will be registered by the Registrar;

(3)  Financial reports will be submitted on the date prescribed in Section 36(d).

Submission of Documents to the Registrar (Amendment: 1996)

38A. (a)  An Amuta must present to the Registrar, at the Registrar's request, and within a period of time to be designated, any document or information he deems appropriate to request, for clarification of details noted or which should have been noted in the financial reports submitted to him in accordance with Section 38(a)(6)

(b) The Registrar may demand that corrected financial report be submitted, which include the details prescribed in Subsection (a)

Clarification of Details in Annual Report (Amendment: 1996)

39. (a)  The register of members and registry of members of the board of directors, minutes of the general assembly and financial reports which were presented before the general assembly, will be accessible at any reasonable time for the review of all members of the Amuta.

(b) The documents submitted to the Registrar in accordance with Sections 2, 10 or 38 will be accessible for review by any person so requesting at the office of the Registrar.

(c) If a notice in accordance with Section 36 (b) has been attached to a financial report submitted to the Registrar in accordance with Section 38 (a)(6), the Registrar will publish at the Justice Department's web site details of all the payments the Amuta made or undertook to pay as detailed in the said notice, without listing the recipients of the largest remunerations paid by the Amuta.

Review (Amended 2006)

40. (a)  The Registrar, at the request of one quarter of all members of the Amuta or at the request of the auditing committee or auditing body, as well as at his own initiative, may appoint an investigator who will investigate the manner of the Amuta's management, it's operation in accordance with the prescriptions of this law, and its financial activities; the investigator will submit a report to the Registrar.

(b)  (Cancelled)

(c) The investigator will have the authorities prescribed in Sections 9 though 11 and 27(b) of the law of Investigative Committees - 1968, mutatis mutandis.

(d)  (Cancelled)

Appointment of an Investigator and His Authorities (Amendment: 1996, 2005 [2])

41. (a)  The Registrar may charge the costs or part of the costs of the investigation to the Amuta, to members of the board of directors or to the requestors of the investigation, and may demand guarantee for payment of its costs from the requestors.

(b)  (Cancelled)

(c)  Costs of the investigation which were not charged as prescribed in Subsection (a) will be borne by the State's Treasury.

Costs of the Investigation (Amendment: 2005)

42.  Liquidation of an amuta may be voluntary or in accordance with a Court order.

Methods of Liquidation

43. (a) An amuta may, at its general assembly, resolve upon its liquidation and on the appointment of a liquidator or liquidators. The resolution will require a two-thirds majority of those voting at a meeting on which all members of the amuta have been given notice twenty-one days in advance, indicating that a liquidation resolution will be proposed thereat.

(b)  (Cancelled)

(c)  Liquidation will commence two weeks after adoption of the resolution unless a later date is prescribed therein.

Resolution of Liquidation and Appointment of Liquidator

44. A general assembly referred to in Section 43 may only be convened if an affidavit by a majority of the members of the board has been submitted to the Registrar to the effect that they have examined the state of the business of the amuta and are satisfied that it is able to pay its debts in full within one year from the commencement of the liquidation.

Declaration of Solvency.

45.  The liquidator will -

(1) receive the property of the amuta and collect the debts due to it from members and others;

(2) realize the property of the amuta to the extent required for the payment of its debts;

(3) pay the debts of the amuta, including the expenses of the liquidation;

(4) deal with the remainder of the property in accordance with Section 58.

Functions of the Liquidator

46. (a) Within two weeks after the commencement of his appointment the liquidator will publish notice of the liquidation of the amuta, calling upon its creditors to submit their claims to him within a reasonable time prescribed in the notice.

(b)  The notice will be publicized  in the Reshumot (the official Gazette);  it will also be publicized in two daily newspaper published in Hebrew, however, if most of the members of the Amuta are Arabic speakers, it will be publicized in a daily newspaper published in Arabic.

Notice to Creditors

47. (a) When the liquidator has completed the liquidation operations, he will convene a final general assembly and present for its approval a report on the liquidation, certified by the auditing committee or the audit body. The provisions of Section 37 will also apply, mutatis mutandis, to that report.

(b)  The final general assembly having approved the report, the liquidator will submit a copy thereof and of the minutes of the meeting to the Registrar within two weeks after the meeting.

Completion of Liquidation

48.  Voluntary liquidation will not derogate from the authority of the Court to issue a liquidation order as prescribed in Section 49;  Where such an order is issued, liquidation under the order will be deemed to have commenced on the date of commencement of the voluntary liquidation.

Preservation of Authority

49.  The District Court may order liquidation of an amuta in any of the following:

(1)  the activities of the amuta are conducted in a manner contrary to the Law, to its objectives or its Articles of Association;

(2)   the amuta or its objectives are aimed at the negation of the existence or the democratic character of the State of Israel;

(3)  an investigator appointed under Section 40 has recommended liquidation of the amuta;

(4)  the amuta is unable to pay its debts;

(5)  the court has found it equitable and just to liquidate the amuta.

Grounds for Liquidation

50. (a) A request to liquidate an amuta will be submitted by the Attorney General or by the Registrar; the request as prescribed in Section 49(4) may also be submitted by a creditor to whom the amuta owes a debt of more than NIS 5,000.

(b)  No request as prescribed in Section 49(1), (2) or (5) will be submitted until after the Registrar has cautioned the amuta in writing to remedy the condition and the amuta has not done so within a reasonable time after receipt of the warning.

Request for Liquidation Order (Amendment: 1996)

51. Where the Registrar has reason for concern that one of the grounds for liquidation as prescribed in Section 49(1), (2), (4) or (5) exist in an  amuta, he may demand that any member of the amuta or institution of its institutions and from any employee submit, within a period to be specified, any document which he holds and any information which may, in the opinion of the Registrar, assist to clarify the concern.

Preliminary Clarification (Amendment: 1996)

52. The Attorney-General, the Registrar, the amuta and any person who, having been a party to the proceedings in the District Court, is aggrieved by the liquidation order or by the refusal to grant it, may appeal to the Supreme Court. An aggrieved party who was not a party to these proceedings may so appeal if he has received leave to do so from the President of the District Court.

Appeal

53. Liquidation by court order will commence on the date of the order, unless otherwise specified therein for this purpose.

Commencement of Liquidation

54. The provisions of Sections 258, 263, 264, 267, 270, 276, 281, 285, 300 to 305, 307, 312, 313, 315 to 317, 336, 352 to 356 and 373 to 378 of the Companies Ordinance [New Version] - 1983 (hereinafter - Companies Ordinance) and the ordinances established accordingly will apply mutatis mutandis to the liquidation of an amuta by court order .

Application

55. From the commencement of the liquidation, and on a date prior to the date of the order, if so prescribed by the court in the liquidation order, the amuta will not continue any activity except activities required for carrying out the liquidation, and every power to act on behalf of the amuta will vested in the liquidator alone.

Activities and Representation

56. The court may, at the request of the liquidator, a member of the amuta or a creditor, issue directives to the liquidator on any matter relating the liquidation

Court Directives

57. Every member of the amuta or of any of its agencies, every employee and every former member or former employee of the amuta or any of its agencies must, upon the demand of the liquidator, deliver to him any document in their possession and any information relating to the business or affairs of the amuta.

Duty to Provide Information

58. Where an amuta has been liquidated and its debts have been paid in full, and any property remains, such property will be dealt with in accordance with the provisions of the Articles of Association. In the absence of such provisions or where it is not practicable to act in accordance therewith, such property will, in accordance with the directions of the court, be devoted to an objective defined by the court as similar to the objectives of the amuta.

Property of a Liquidated Amuta

59. (a)  An amuta in which one of the following is fulfilled will be deemed as an amuta which has ceased to operate:

(1)  Has not paid license fees which it is obliged to pay according to this law, within 90 days of the last day designated for their payment;

(2) Has not submitted financial reports to the Registrar within 90 days from the last date designated to do so in Section 36;

(3) Has not fulfilled a ruling or court decision with regard to this law, in the period prescribed to do so, or within 90 days from the day the decision or ruling is made, the later of the two.

(b) The Registrar is authorized to delete an amuta which has ceased to operate, in accordance with the prescribed in Section 368 of the Companies Ordinance and the ordinances established accordingly, mutatis mutandis.

(c) Cancellation of an aumta's deletion will be subject to the instructions prescribed in Section 369 of the Companies Ordinance and the ordinances established accordingly, mutatis mutandis.

(d) Cancellation of the liquidation of an amuta is subject to the instructions prescribed in Section 367 and the ordinances established accordingly, mutatis mutandis.  

Deletion, Reactivation and Cancellation of Liquidation (Amendment: 1996)

60. (a) A society established under the Ottoman Law of Societies from 29th Rejeb, 1327 (1909) (hereinafter - "the Ottoman Law") notice of whose establishment under that Law was given before the coming into force of this Law (such a society hereinafter - "existing society") may apply to the Registrar for registration as an amuta; the application in accordance with this Section will be subject to the provisions of Section 2(a).

(b) The Registrar will accept the application for registration if the signatories of the application are proven to his satisfaction to be authorized to act to register the society on its behalf.

Request for Registration (Amendment: 1996)

61. (a) Where application is made under Section 60, the Registrar will register the existing society as an amuta in the Register of Amutot unless prevented from doing so under the provisions of Sections 1, 3, 4(a) or 4(b) and the provisions of Sections 4(c), 6 and 7 will apply mutatis mutandis for purpose of registration.

(b) From the date specified in the registration certificate as the date of registration, the existing society will be an amuta and the provisions of this Law will apply thereto.

(c)  Where an existing society has registered as an amuta prior to the commencement of The Law of Amutot (Third Amendment) 1996, the effectivity of the registration will not be impaired solely due to submission of an application for registration of an amuta after the period designated for doing so in Section 60(a) as worded prior to the commencement of the aforesaid law.

Registration of a Society as an Amuta (Amendment: 1996, 2005)

62. Where an existing society does not apply for registration as an amuta, the Registrar may delete it;  the deletion proceeding and the revival of the society after its being deleted will be governed, mutatis mutandis, by the provisions of Section 368 and 369 of the Companies Ordinance.

Society which was not Applied  to Register (Amendment: 1996)

63. The Minister of Justice will appoint a State employee qualified to be a Judge of a Magistrates' Court as Registrar of Amutot, and the Minister may appoint such State employee as Assistant Registrar or Assistant Registrars and grant them the authorities of the Registrar.

Registrar of Amutot

64.  A member of an amuta, amuta employee or person included in the Auditing Body, who effects one of the following, will be subject to imprisonment of three years:

(1)  Provides a false response to a question asked or provides false information when required by this law to do so;

(2)  Continues to act on behalf of the amuta during its liquidation, with the intent to deceive, contrary to the provisions of Section 55.

Offenses of Fraud (Amendment: 1996)

64A.(a)  An amuta  which breaches one of the following duties and any person responsible for breach of duty will be subject to a fine - as prescribed in Section 61(a)(2) of the Penal Law - 1977.

(1)  Keeping of a registry of members as prescribed in Section 18, registry of the members of the board of directors as prescribed in Section 29 and accounting books as prescribed in Section 35;

(2)  Holding of General Assembly as prescribed in Section 20(a);

(3)  Recording of minutes as prescribed in Section 23;

(4)  Provision of opportunity to a member of the board of directors, auditing committee or auditing body to review the account-books and documents prescribed in Section 35(b);

(5)  Submission of documents to the Registrar as prescribed in Section 38;

(6)  Provision of opportunity to a member of the amuta to review the registries and documents prescribed in Section 39;

(7)  Refraining from acting on behalf of the amuta which is in liquidation, contrary to the provisions of Section 55.

(b)  An offense prescribed in this Section is not subject to proof of criminal intent or negligence.

Breaches of Duty of Due Diligence

65. The Minister of Interior* may, with the approval of the Constitution, Legislation and Juridical Board of the Knesset, prescribe by regulation that any prescription of the prescriptions of this law will not apply to types of amutot, or will be applicable upon them with amendments, all as detailed in the regulations.

Exemption from Application

66. (a) The Minister of the Interior* is charged with implementation of this Law and may, with the approval of the Constitution, Legislation and Juridical Board of the Knesset, make regulations for any matter pertaining to its implementation, including -

(1)  Fees payable for Registrar acts and annual fees;

(2)  registration of mortgages of amutot;

(3)  registration of existing societies as amutot as prescribed in Section 60.

(b)  The Minister of Justice may make procedural regulations for court proceedings under this Law.

Implementation and Regulations (Amendment: 1996)

67.  The provisions of this Law will not apply to

(1)   Cancelled.

(2) existing societies which are employees' or employers' organizations, or employees' or employers' organizations established three years before the date of the coming into force of this Law.

Inapplicability (Amendment:  1992)

68.  The Ottoman Law will not apply except to an existing society so long as it has not been registered as an amuta or has not been deleted under Section 62, and to societies to which this Law does not apply under Section 67.

Applicability of the Law

69. Section 35 of the Trust Law -1979, is hereby repealed.

Amendment of

Trust Law

70. This Law will come into force on the 26th Adar Bet, 5741 (1st April, 1981).

Commencement

71.  This Law will be published within thirty days from the date of its adoption by the Knesset.

Publication

1. (a) The founders of the amuta are members thereof from the date of registration in the Registrar of amutot.

(b)  A person who wishes to become a member of an amuta will submit a request to the board, worded as follows:

    "I (name address and identification number) request to be admitted as a member of (name of amuta) amuta.  The objectives of the amuta are known to me.  If admitted as a member I undertake to comply with the provisions of the articles of the amuta and with the decisions of the amuta's general assembly."

(c)  The decision concerning admission or non-admission of the applicant as a member of the amuta will rest with the board of directors. If the board of directors refuses to admit the applicant, he may lodge objection before the next general assembly.

Admission of members

2. (a) A member of the amuta is entitled to attend and vote at every general assembly and will have one vote at every voting. He is entitled to elect and be elected to the board of directors and the auditing committee.

(b) A member of the amuta is entitled to take part in its activities and to enjoy its services.

(c) The board of directors may, with the approval of the general assembly, prescribe a membership fee, the payment of which will be obligatory on the members.

(d) Termination of membership of the amuta will not exempt from effecting payments due to the amuta from the member immediately before the termination of his membership in respect of the period up to such termination.

Rights and Obligations of a member

(a)  Membership in an Amuta will terminate -

(1)  upon the death of a member, and a member which is a body corporate - upon completion of its liquidation;

(2) upon retirement from an amuta; written notification of retirement will be submitted to the board thirty days in advance;

(3)  upon expulsion from the amuta.

(b) The general assembly may, upon proposal by the board of directors, decide to expel a member from the amuta on one of the following grounds:

(1)  the member has not paid to the amuta what is due to it from him;

(2)  the member has failed to adhere to the instructions of the articles of association or decision of the general assembly;

(3) the member acts in conflict with the purposes of the amuta;

(4) the member was found guilty of an infamous crime.

(c) The board will not propose to the general assembly to expel a member of the amuta until after he has been given due opportunity to voice his claims before it, and will not make such proposal based on that prescribed in sub-Section (b)(1), (2) or (3) until it has warned the member and allowed him reasonable time to correct the offense.

Termination of Membership

4. Any invitation, request, warning or other communication by the amuta to a member will be in writing and will be delivered to him personally or sent by ordinary mail to his address registered in the registry of members; on the written application by member, the amuta will change his address registered in the registry of members.

Communication to a Member

5. The day, hour and place of a general assembly will be fixed by the board.

Time and Place

6. A general assembly will be convened by notice to every member at least ten days in advance, indicating the day, hour, place and agenda.

Invitation

7. An ordinary general assembly will hear reports on the activities of the board of directors and the activities of the auditing committee, will consider them and the financial report submitted to it by the board of directors, will decide on their approval and will elect a board of directors and an auditing committee.

Functions of  an Ordinary General Assembly

8. (a) A general assembly will not be opened unless at least one quarter of the members of the amuta are present; where such a quorum is present at the opening of the meeting, the meeting may continue its deliberations and pass decisions even if the number of those present has decreased.

(b) Where the aforesaid quorum has not convened within one hour from the time specified in the invitation, the meeting will be considered postponed to a week later at the same time and place, without need for another invitation, and those present at this postponed meeting, whatever their number, may deliberate and pass decisions.

Quorum

9. A general assembly will elect a chairman and a secretary for the assembly from among the members of the amuta.

Chairman and Secretary

10. The decisions of a general assembly will be passed by a majority of the votes of those voting unless the Law or these Articles require a different majority; where the votes are evenly divided, the chairman of the meeting may made the decision.

Decisions

11.  The secretary of the general assembly will keep minutes of the meeting.

Minutes

12. The number of the members of the board will be fixed by decision of the general assembly but will not be less than two.

Number  of Members

13. (a) The board of directors will hold office from its election by a general assembly and until another general assembly elects a new board; a member of the outgoing board of directors may be re-elected to the new board of directors.

(b) A member of the board of directors may resign at any time by written notice to the board of directors; a member of the board will cease to hold office if he has been declared legally incompetent or bankrupt.

Period of Tenure

14. (a) Where the position of a member of the board of directors has fallen vacant, the remaining members or member may appoint another member of the amuta to hold office as a member of the board of directors until the next general assembly. Pending such an appointment, the remaining members or member of the board of directors may continue to act as a board of directors.

(b) Where a member of the board of directors is unable to carry out his functions, the remaining members or member may appoint a member of the amuta to take his place until he again carries out his functions.

Filling Vacancy on Board of Directors

15. The board of directors may itself arrange the times of its meetings, invitation to them, the required quorum and procedure for conducting them.

Meetings of the Board

16. The decisions of the board of directors will be passed by a majority of the votes of those voting; where the votes are evenly divided, the proposal will be regarded as rejected; a unanimous decision of all the members of the board of directors may be adopted outside the course of the board of directors meeting.

Decisions

17. The board will keep minutes of its meetings and decisions.

Minutes

18. The board of directors may empower two or more of its members to sign documents which bind the amuta on behalf of the amuta, and to perform on its behalf acts which are within the competence of the board of directors.

Right of Representation.

19. The provisions of regulations 12 to 17 will also apply, mutatis provisions. mutandis, to the auditing committee.

Application of  Provisions

20. The amuta may, by decision of the general assembly, establish branches and provide for their organization and the regulatory procedures of their business.

Establishment of Branches and Their Organization

21.  Where any assets remain after the amuta has been liquidated and its debts have been paid in full, such assets will be transferred to another amuta having similar objectives.

Transfer of Surplus Assets

In this addendum -

"Turnover" - the sum of revenues of any source and type, received in the past year;

"Year" - the period of 12 months from the month of January until the end of the month of December;

"Revenue" - including donations, funding, indirect taxes, designated amounts, in cash or cash equivalent, including revenue from sale of fixed assets;

"Relative" - sibling, parent, parents of parents, children, children of spouse or spouse of any of these.

A.  An amuta whose turnover exceeds NIS 750,000 must maintain a double entry accounting system according to one of the customary systems, including:

(1) Treasury book;

(2)  Receipt slips, revenue from sale of property or from provision of services will be recorded in a separate receipt book;  revenue from donations will be recorded in a separate receipt book; each receipt in the donation receipt slip book will be imprinted in a conspicuous manner with the word "donation";  in the event that an amuta has been given authorization as provided in article 46 of the Income Tax Ordinance, the receipt will also be imprinted with the words "the institute holds an income tax permit for donations as provided in Section 46 of the ordinance".

(3)  Income account, in which separate entries will be recorded for income derived from:

(a) funding and contribution by others, including government or municipal bodies;

(b)  donations from Israel and donations received from abroad;

(c)  income from interest and linkage differentials;

(d)  income from rental of properties;

(e)  revenue from membership fees;

(f)  income from sale of services and assets which do not directly serve the objective of the amuta;

(g)  return from sale of permanent assets and capital assets.

(h) other income;

(4)  A bound book in which assets received as donations or gifts will be recorded; the record will include the name of the donator, description of the asset received and date of its receipt;

(5)  Costs account which will separately record costs from:

(a)  donations and contributions given to another person;

(b) salaries and related costs;

(c)  management costs and general costs;

(d)  interest costs and linkage differentials;

(e)  amounts for purchase of services and intangible assets which do not serve the objectives of the amuta directly;

(f)  capital purchases;

(g)  transactions and loans carried out between the amuta and a member of the board or relative of a member of the board;

(h)  other costs.

b.  An amuta whose turnover does not exceed NIS 750,000 will maintain, for each tax year, an accounting system which will include at least -

(1)  revenue and payments book, which in which separate columns will record:

(a)  on the revenue side -

(1)  funding and contribution by others, including government or municipal bodies;

(2)  donations from Israel and donations received from abroad;

(3)  income from interest and linkage differentials;

(4)  income from rental of properties;

(5)  revenue from membership fees;

(6)  income from sale of services and assets which do not directly serve the objective of the amuta;

(7)  return from sale of permanent assets and capital assets.

(8)  other income;

(b)  A bound book in which assets received as donations or gifts will be recorded; the record will include the name of the donator, description of the asset received and date of its receipt;

(c)  Costs account which will separately record costs from:

(1) donations and contributions given to another person;

(2)  salaries and related costs;

(3)  management costs and general costs;

(4)  interest costs and linkage differentials;

(5)  amounts for purchase of services and intangible assets which do not serve the objectives of the amuta directly;

(6)  capital purchases;

(7) transactions and loans carried bout between the amuta and a member of the board or relative of a member of the board;

(8)  other costs.

(2)  External record file.

C. Notwithstanding the aforesaid in this Addendum, the amuta is authorized not to record the name of the donator in its financial report if the words "donation by an anonymous donor" has been entered on the receipt slip, and one of the following is applicable:

(1)  the amount of the donation does not exceed the maximum amount prescribed by the Minister;

(2)  the Registrar has given special dispensation to refrain from specifying the name of the donator in the financial report, in accordance with procedures and regulations prescribed by the Minister.

YITZCHAK NAVON

President of the State

MENAHEM BEGIN

Prime Minister

YOSEF BURG Minister of the Interior