cross border transactions

Posted by: Gadi Ouzan  & Dani Rinot

Considering an investment or acquisition of Israeli company? 

FIRST MOVE: GO STRAIGHT AHEAD TO THE ISRAELI  REGISTRAR OF COMPANIES WEB SITE

If you want to obtain the basic information with respect to your target Israeli company, all you need to do is to browse to the Web Site of the Israeli registrar of companies. The Registrar maintains a computerized database which includes files on each Israeli company.

The main details mentioned in the Registrar’s report are the name and registration number of the company, names of the members of the board of directors, names of shareholders and list of all pledges created by the company on its assets.

Although the names of the board members and shareholders as reported to the Registrar are declarative in nature, the list of pledges has a constitutive nature. A pledge created by an Israeli company shall be considered valid vis-à-vis third parties, only upon its registration with the Registrar of Companies.

As a potential buyer of Israeli activity (whether assets owned by an Israeli company or shares of such company), you should review or instruct your advisor to review – not only the file of the target company, but also the files of its shareholders (where such shareholders are corporations). By reviewing the files of the target company you may discover that the potential assets are pledged to a third party by way of a fixed lien or a floating charge.

The search is not completed yet. By reviewing the files of the shareholders (the selling parties) you may find that the shares which are planned to be purchased are pledged to a third party by way of a fixed lien.

If no fixed lien is registered against the purchased shares, one should also ensure that there is no floating charge registered on the assets of the selling party. Under Israeli law, a floating charge usually applies to all assets of the selling party and such charge probably “covers” the purchased shares as well.

Just a reminder – the content of the Web Site and the files are in Hebrew so you should equip yourself with a Hebrew reader …

This entry was posted on Monday, March 8th, 2010 at 2:49 pm and is filed under Commercial Topics Related to Doing Business in Israel. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.