Client updates / Corporate

The global effort to fight the spread of coronavirus has prompted new privacy related questions around the world. Much has been written for and against the use of privacy-compromising measures to protect public health. Therefore, we have chosen to concentrate on the practical implications of privacy principles on companies and businesses.

As a result of the economic downturn and in order to reduce expenses, one of the alternatives is imposing unpaid leave on employees.

The Israeli National Cyber Security Authority published recommendations for business and organizations related to privacy protections and data security for telecommuting due to coronavirus spread.

The Companies Registrar has recently increased its enforcement efforts when companies failed to submit annual reports, imposing fines amounting to a few thousand shekels on companies that do not comply with the requirements.

The Israel Securities Authority (ISA) and the Ministry of Justice published a call to the public to adjust the corporate regime, as part of addressing problems that may arise as a result of the transition of public companies to a decentralized ownership structure.

Six months after the amendment to the Economic Competition Law took effect, the Competition Authority published its position regarding the circumstances in which even an entity with less than a 50% market share may be deemed a “monopoly holder.”

On April 12, 2019, Arcturus Therapeutics Ltd., an Israeli public company traded on NASDAQ, published in the United States a prospectus and proxy statement (convening a general meeting of shareholders of the company). Publishing the prospectus is an advanced step toward completing an arrangement between the company and its shareholders.

Chapter 8 of the new Insolvency and Economic Rehabilitation Law addresses the liability of officers and functionaries. The law’s main innovation is that – beyond liabilities toward the corporation, which already existed prior to the enactment of the law, such as fiduciary duty and duty of care – special liability will also be imposed on the corporation’s officers and functionaries.

Two important block exemptions have been updated recently: the exemption for joint ventures and the exemption for restraints ancillary to mergers. The amendments transfer the examination of the intensity of the harm to competition deriving from these arrangements from the Israel Antitrust Authority to the business sector.

Recently, the Israel Tax Authority published a circular discussing business restructuring in multinational groups.

A new circular by the Israel Tax Authority determines the terms for granting options to employees when the vesting of such options is contingent upon performance milestones or the occurrence of an IPO or exit event.

The Delaware Court of Chancery issued a precedent recently, whereby an acquisition agreement may be cancelled due to the occurrence of a “Material Adverse Effect” (MAE) in the acquired entity.

Israel’s Innovation Authority (the IIA, formerly the Office of the Chief Scientist) has issued new rules regarding the licensing of IIA-funded know-how for use by multinational corporations outside of Israel.

The Ministry of Justice recently published a new memorandum regarding an amendment to the Companies Law. This amendment seeks to authorize the Registrar of Companies to administratively strike off a company from the Companies Register.

Recently, a four month proxy fight over control of an Israeli incorporated NASDAQ traded company was settled, following a series of proceedings held before the Tel Aviv District Court. At a crucial juncture, the Tel Aviv Court was asked to issue a temporary injunction over a transaction initiated by the board, which included a highly dilutive (24.9%) issuance of shares.

The Israeli Supreme Court has set a precedent by ruling that the Business Judgment Rule should also be applied to a company’s board of directors when it is deciding whether or not to file a derivative suit.

On March 23, 2018, the TASE board of directors approved the launch of a new index in conjunction with the Ministry of Economy and Industry.

The Knesset recently approved the Law for the Reduction in the Use of Cash. This law imposes bans and restrictions on the making and receiving of payments using cash and checks at the sums therein prescribed.

The State Comptroller, Judge Joseph Shapira (retired), published an audit report on the financing of political parties in relation to parliamentary parties in the 20^th Knesset for the period from April 2015 until year-end 2016.

The Israel Tax Authority published a draft circular today about a sale of rights in a corporation when a portion of the consideration is paid to the seller at a future date.