Does an Israeli company need shareholder approval to sell all of its assets?

The Companies Law allocates authority between two organs. Section 57 lists the matters reserved to the general meeting, including amending the articles, appointing the auditor, appointing external directors and changing registered share capital, and a sale of the business as a going concern does not appear on that list. Section 92 gives the board residual authority to set policy and supervise management, which is where an asset sale falls by default. Two statutory overlays can still pull shareholders in. Section 275 requires a special approval chain, including a disinterested shareholder majority, where a controlling shareholder has a personal interest in an extraordinary transaction. Where the deal is instead structured as a statutory merger under the merger provisions in Part Eight, shareholder approval and creditor protection steps are mandatory.

For a foreign buyer the practical work is documentary. Read the articles (takanon) and every investor agreement, because venture-backed Israeli companies almost always carry a protective provision that treats a sale of substantially all assets as a deemed liquidation requiring preferred-shareholder consent, and that contractual gate is what actually governs. Check separately whether the Israel Innovation Authority funded any of the technology, since transferring IIA-supported know-how out of Israel needs the Authority's consent no matter how the shareholders vote. Directors remain exposed under the duty of care in Section 252 and the duty of loyalty in Section 254, so a sale at undervalue can support a derivative claim even where the approval formalities were satisfied.

From the full guide: M&A in Israel: A Legal Overview for Foreign Buyers and Sellers

← Browse all Q&A