On June 27, 2022, the Israeli legislature promulgated Amendment No. 2 to the Digital Communications with Public Bodies Law and Amendment No. 35 to the Companies Law. This amendment prescribes, inter alia, a new procedure regarding the mode of filing and registering reports with the Registrar of Companies.
What is an online reporting obligation?
Pursuant to the Registrar of Companies’ directives, as of June 27, 2024, every company incorporated in Israel must file its various reports and applications to the Registrar of Companies solely online, through the Corporations Authority’s website. This rule applies to both Israeli-owned and foreign-owned companies.
In other words, as of this June 27, 2024, the Corporations Authority’s offices will no longer accept manual reports. Accordingly, registration and filing in the Registrar of Companies’ database will be done electronically through the Corporations Authority.
What is the purpose of regulating online reporting?
The purpose of the new procedure is to streamline the Corporation Authority’s provision of services by cutting costs (couriers, postage, etc.), providing swifter updates and responses to applications, offering more efficient tracking of submissions, and eliminating the many disadvantages of manual submissions (costs, processing times, losses of documents, uncertainty, and environmental costs).
Which filings are available online?
Once the amendment comes into effect, online filings will automatically and immediately replace a wide variety of manual filings. These include for example, annual reports to the Registrar, amendments to companies’ articles of association, company name changes, changes in board of directors composition, share allotments and transfers, mergers, increase or decrease of registered share capital, address changes (registered or digital), and updates about functionaries (reporting officer, CEO, independent auditor etc.).
Who is a company’s authorized reporting officer?
Companies will now file reports and perform online updates through the “Corporations Online” tab on the Corporations Authority’s website. Any party on behalf of the company authorized to report to the Registrar of Companies may carry out such functions.
An “authorized reporting officer” is the person whom a company has defined as its authorized reporting officer on the Corporations Authority’s website and accordingly, this person may file updates on the company’s behalf about any change made that the company must submit to the Registrar of Companies. The authorized reporting officer will also be able to view the company’s details in the “Corporations Online” tab on the Corporations Authority’s website.
The authorized reporting officer does not have to be an officer of the company (such as a director or CEO) and may be any person the company specifically designates for this purpose, provided that such person is registered in Israel’s national identification system or, in particular instances (such as lawyers), that this person holds a smart card issued by an authorizing authority.
What is the procedure for appointing an authorized reporting officer?
Companies may appoint authorized reporting officers on their behalf by submitting the form “Appointment of a Company’s Authorized Reporting Officer” to the Registrar of Companies in one of the following manners:
1. By email
The accountant or lawyer who authenticated the signature of the officer who signed the form on the company’s behalf, emails the letter of appointment to the Registrar of Companies email address. The form should be submitted after it has been digitally signed by a lawyer or accountant holding a smart card, using one of the digital-signature software programs specified by the Corporations Authority.
2. Through the Corporations Authority’s website
The person registered in the Registrar of Companies’ register as an officer of the company, or any appointed person holding a smart card (even if that person is not an officer of the company), submits the letter of appointment using the “Corporations Online” tab on the Corporations Authority’s website. The form will be submitted as an “update of a company’s functionaries” action and does not have to be digitally signed.
3. By reporting in the annual report
A company may inform the Registrar of Companies about its appointment of an authorized reporting officer in its annual report to the Registrar of Companies in the designated field on the “Company Details” form.
What actions should companies take in preparation for the change?
The public is currently being made aware of the change in the mode of reporting and the effective dates of the new procedure via a warning letter sent on behalf of the Registrar to a large number of companies. The letter stipulates, inter alia, sanctions in respect of a company’s failure to register a digital address and explains the nature of the switch to online reporting to the Registrar. For additional information, see our earlier article on companies’ obligation to register an official digital address.
In light of the short time frame set by the Registrar of Companies, we recommend appointing an authorized reporting officer as soon as possible in order to be prepared for the change. Of course, companies may also appoint lawyers holding a smart card for this purpose.
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