ADVOCATE ISRAEL

.1 Genia Vardig
.2 Ada Antr
.3 Estate of the late Benjamin Vardig

Against

.1 D.g.b. 9 Textile Ltd.
.2 Zvi Federline
3 Edith Federline
.4 Yehuda Federline
.5 Pinchas Moshkovitz
.6 Helena Moshkovitz
.7 Lion Moshkovitz
.8 Zvi Tofrstein
.9 Queen Tofrstein
.10 Yaron Tofrstein

This document was translated by computer software without human contact, so there may be significant errors in translation: please do not rely on the translation without obtaining appropriate advice with a certified Israeli advocate / lawyer

Supreme Court
[27.12.84]
Before President M. Shamgar


Orders of government and law Ordinance, 1948, RA Tos' a, 1, Sections 11, 15 (c) (Add: Book of Laws Tsl"b v. 51) - Companies Ordinance, Ha"i Volume I, ( H) 155, (a) 161, Section 2 (2) (this section is not included in the new version: In NK 764) - Ordinance Amendment law and government orders (No. 14), Tsl"b 1972, Book of Laws 51 - Ordinance bills [New Version], NK 14, Section 2 - Proposed Amendment of Companies Ordinance (No. 13) Tsl"b 1971, Arrow .129

Mini - Ratio:
* My daughter - a trial - further discussion - grounds for the existence
* My daughter - Law - Halacha verse - American Laws
* My daughter - Law - Halacha verse - English Laws
* Sources of Israeli law - foreign sources - Laws American
* Sources of Israeli law - foreign sources - Laws English
* Sources of Israeli law - foreign sources - contact them

Petitions for further discussion revolved around the questions, if the ruling object of the petition for further discussion renewal went, and if the court referral practices used in the United - States to be grounds for further discussion.

The Supreme Court ruled:
A.. Additional discussion is appealed. There is nothing between the explicit discussion of errors in testimonies Vaskt conclusions from them, according to the applicant's claim, and the essence is meant, the - by law, of discussion.
At. (1) reference American case law or case law of other countries, which tend Law similar to ours, there Gibosn our perceptions of or reference to such ruling to understand nature's rules similar statement accepted a long time.
(2) This trend has received special impetus with the enactment of Article 15 (c) payable to government and legal procedures, תש"ח - .1948 of this section did not make a decisive break from driving to beginning the trial, on the other as well as permission was not a preliminary study on the thoughts, views and attitudes that are not sources of English law.
(3) Section 11 orders payable to government and law served as a teacher through an initial ruling, which was influenced by the fact that, last part of Article 11 gave essentially the opinion that, political independence also leads to follow changes in the law. Interpretation. This created the basis for an independent interpretation of the law of freedom of the independent court of law formulation.
(4) the courts free to deviate from the precedents of English, whether based on provisions of section 11 orders payable to the government based on law and fact, courts are a sovereign country.
(5) in section 2 (2) Companies Ordinance was a reference interpretation of the Companies Ordinance under English law, but there was a more relevant time to tie our corporate law - the broad sense of that term - interpretation exclusively by English law. No country in this matter of interpretation of the command words formula that granting legal interpretation of the meaning of debts, which are an essential part of corporate law.
(6) for the completion Movnm meaning of concepts and teaching on the nature of duties over write command could look for a missing filling, other legal sources, which brought attention to similar topics as for the provisions of the same.
(7) American ruling class was not a similar mandate granted during practice law in England, if she could assist in defining individual debts, understanding the concepts in formulating our own patterns implied by the power Shukna last part of Article 11 above.
C. To understand nature of trust there is no need for interpretation of the law formulated but derive from the Torah's general corporate law, and the connection that was not Article 2 (2) Companies Ordinance exclusive master class, as the drafters intended that the mandatory command in .1929
D.. Set Ohboiotio duties of company director and a controlling shareholder, served as the basis of the court's conclusions Slaror, was a novelty, the existing law roots absent or reasonable expectations of with it, and - yes there is no reason for the existence of further discussion.

Rulings - Dean of the Supreme Court mentioned: N.
[1] DN 6 / 82 Yanai N. Head Bailiff et al, PD him (3) .99
[2] AE 81/55, 84, 91, 92 m stars v. A. Becker et al Appeal against me, PD Ya .225
[3] AE 245/60 Sianmid American establishment. N. Petit S.f.a. and - "Retort" Himiot Laboratories Ltd., PD Tz .788
[4] AE 249/58 Haberman v. Lippmann et al, PD calendar 1.788
[5] are 'Jerusalem 100/52 Industrial Company Ltd. v. J. Agion et al, PD and 887, F"a T. .190

Rulings - English law mentioned: in
866. E.r 51 (1845) Midland Rly. Co. V. Hudson-york and north [6]
. (. ch)
. (. C.a). 795Ch 29 (1885) in re cape breton company [7]

. (. P.c). 83A.c [1902] Burland v. Earle [8]
. . 652A.c 12 (1887). Bentinck v. Fenn [9]
[1959] operative wholesale society ltd. V. Meyer-Scottish co [10].). Sc). H.l). 324a.c


Notes: and
1 conditions for the existence of further discussion, see: N. DN 2 / 84 Rosenberg v. Rubenstein et al, PD wet (3) .689
.2 Turn to foreign legal sources, see: AE 295/81 estate in the late Sharon Gabriel v. Gabriel et al, PD him (4) .533
.3 Status of English Laws Following enactment of Article 15 (c) payable to government orders and law, 1948, see: AE 64/74 and Bank Leumi Le-Israel Ltd. v. Mandelblit, PD Power (2) .485
Petitions for further discussion on the matter, the court ruled in three (judges A. Barak, S. Levin, D. Levin) dated 9.7.84 AE 817/79, 818, 585/82 *. petitions were rejected.

Q Toussia - Cohen - the name of petitioner DN 29/84, Dr. A. Goldenberg - named petitioner DN 30/84; L. D. Commissar, M. Kirsch - named Respondent 1; N. genuine - as Respondent 2; A. Perski - named respondent .3


Resolution

Nature of the disputes brought before the House again now - this statement in an application for further discussion, described thoroughly detailed ruling - Dino's House - This sentence AE 817/79, 818, and -585/82, * after take place before the court long and thorough discussion.
The court discussed at length allegations raised before the court on its findings

First noted in this context: F **
"... The first reading of the verdict raises difficulties. There is not - errors. Fell in errors. Events mingled chronological sequence. There is no reference

------------------

* PD wet (3) .253

** Name, p. .270

Explicit evidence submitted during the trial, and there is no explicit statement, to whom the judge believed the witnesses who did not. However, after repeated reading, it turns out that the inaccuracies were mistakes marginal things, and that decision has - Dina's court findings determining our heads - and therefore determining the position regarding the reliability of evidence - all the major factual questions, need a decision on appeal. On - yes, no Nhrog as we, and we ourselves first instance. We do not discuss the matter again, and we write on slate. First instance findings bedding set decision system, we tested if these findings are anchored to the material evidence before it. Instead found that the findings of first instance are anchored in evidence, clean these findings. Instead found that the findings of first instance are not anchored in evidence, in abolishing the findings set of first instance, determined beneath findings - positive or negative - costs the evidence, requested Mantle Bringing evidence.
Following the examination of evidence the court concluded his remarks following significant conclusions exchanges as follows: B *
"... In my opinion, the bank lifted the burden and proved that Epstein acquired control of the bank. The bank also proved that the practice came to money purchase - except the amount of $ 000,427 ¬ bank itself. The bank also proved that Kosoi knowledge, acquisition of Aibicor come bank funds. However, the bank was not proved if the burden or uncertainty, you need a civil trial that Kosoi Philco know, funding of the sale of shares will also Philco bank funds. We must not forget that burden, imposed on each bank, is not easy, For us in proving a breach of trust. This was not the bank. In my opinion, are diamond-shaped scales, and no say at all, that the sale of shares of Philco Kosoi knew that the bank is financing. It is difficult to fact, that practice paid $ 000,427 from sources outside the bank, and that not only Kosoi but many others (especially Drury) figured, foreign investors do exist. As a result, there in my opinion, sufficient basis for setting a first instance, that in a plea Tiberias' knowledge Kosoi, Epstein empty the bank and will collapse, and that the sale of shares Tiberias' abandoned 'the bank. As long as there is speculation about the entry of investors, would not establish the abandonment. on - yes I think that the thesis that the Kosoi' Milt his soul in Tiberias, is not based enough ".

-----------------

* Name, p. .275


And later: and *
"... I have no doubt that the findings of the first instance, that in the agreement July 'asked Kosoi save his soul from the bank, properly evidence based. The meaning of' escape 'This is a complete exit from the bank, both of the Philco and the Kosoi . Kosoi testified that he asked to anticipate the payment Philco, because it was needed the money. It seems that this explanation of Kosoi not found credible the opinion of the court. On the other hand auditors testified that worried about increasing credit Laibicor. auditors noted that following this will have to re-establish their position and could not confirm the bank balance, if not far-reaching amendments will be made. They gave management the bank eight months to remedy the situation. All this delivered personally Lkosoi. They told me that the bank's Hsoloontiot danger, and that there is a danger for The bank, which is a serious crisis (see paragraph 11 above). This information has to be a compelling motive to Lkosoi immediate departure of the Philco and for re-option the final departure of his own departure Aflico. Of course, if you are available bank independent sources of funding, through which can be quickly repair the necessary correction, the picture may change. but such sources were not available to the bank, Okosoi knew it. doing the 'agreements July' Kosoi knew that payments for the shares would come from the bank and investors from South - Africa ".
The court also found Slaror strengthening the above conclusions further evidence Us agreements conducted in September 1966, treated the petitioner's Kosoi Lmniotio bank with Aflico Olmniotio above, which also was a shareholder in the bank.
Stopped - Dino's Court built on its conclusions regarding the duty of the director's duty of trust or indemnity recoverable value that applies to the director, who owed the company for breach of duty of confidence.
The court also suspicious of its conclusions on the duty of trust controlling shareholder of the bank, including who belongs with the control group. For this purpose the court said: F **
"Controlling shareholder who wishes to sell his shares, the company owed duty of confidence about this sale, and must work toward the end - heart and fairly, and he violates his duty, if he sells his shares to the buyer, who empty the best of his knowledge the company of its assets and bring it to the island -- Soloontiot ".

---------------

* Name, p. .276

** There, on page 284

DN 29/84 requesting petition sought to base the existence of new laws supposedly worth further discussion. The trouble is, the request by nature is just a request for another appeal illustration of the nature described in the application flavors can be used to claim - the applicant Kosoi Tromto, endorsement of it, the court dismissed the petitioner did not charge for lack of any evidence or not returned the discussion to the District Court to re-test evidence. discussion is appealed (DN 6 / 82 [1], p. 101), and So anything between detailed discussion of errors in testimonies Vaskt conclusions which, according to the applicant's claim, and the essence is meant, the - by law, of discussion.
Regarding the responsibility of Kosoi director, disagrees come - power petitioner learned of the conclusions, the same appeals court concluded from the evidence, but the adversary is also here that essentially, if a certain legal conclusions from the circumstances, as petitioner describes them; but it does not to indicate the existence of the left, because of innovation which, due to its hardness or because the importance warrants further discussion.
Come - the power of Philco scholar focused arguments, of course, also matters, in which he saw as renewed by the thought went, and his remarks were directed against it, the court addressed, among others, also tend to the Laws of the United - States that he claimed was the basis law addressed as a matter of what happened in .1966
Thesis, presented to the - by the learned counsel of the plaintiff, is not acceptable to me. Study American case law or case law of other countries, which tend Law similar to ours, there Gibosn our perceptions of or reference to such ruling to understand nature's rules similar sentence, which they complained had come - the power of the plaintiff learned, are acceptable thing for a long time. This trend has received special impetus with the enactment of Article 15 (c) payable to government and legal procedures, תש"ח - .1948 Section 15 (c) above has not created a decisive break from the court he used to start of provision of the law in question on the other as well as permission was not an initial study of the thoughts, opinions and attitudes that are not sources of English law. There is also a place to adopt the version, like the American way to review case law was breached only in 1972, and that this matter was not a domain that closely, studying the adoption of ideas, before they can supposedly the initial permit - by enactment of Article 15 (c) above.
Definition of validity in his field of law existing in the country, which brought in 11 orders payable to government and law, not consisted in determining the provision of continuing validity of the law and voting on the sources referred to the legislative power of the sovereign legislature. Last part of Article 11 added clarifying that the law will apply, even not on explicit legislation, any changes resulting from the establishment of the state Orsoiotih. AE 81/55, 84, 91, 92 [2] added clarifying
House - this sentence because the courts free to deviate from the precedents of English, whether based on provisions of Article 11 above and based on the fact that courts are a sovereign country. Article 11 of the above served as a preliminary guide Lfsiktno, which is influenced by the fact that, last part of Article 11 gave essentially the opinion that, political independence also leads to follow changes in the law interpretation. as it was necessary, therefore, formed the basis for an independent interpretation of the law of freedom of the independent Court of law formulation. Article 2 (2) Companies Ordinance referred indeed practice law in England, but the plaintiff considers more than he lies there. Article 2 (2) Although the above was in reference to interpretation of the Companies Ordinance under English law, but there was no more, when relevant, to tie our corporate ¬ broad sense of that term - exclusive commentary by the court English. There is no country on this matter of interpretation of the words formula lawful command interpretation that give meaning of debts, which are an essential part of corporate law. Movnm significance for the completion of the concepts and teaching on the nature of duties over write command could look for a missing filling, other legal sources, which brought attention to similar topics as for the provisions of the same. American ruling was of course a status similar to that given during the trial mandated practice in England, but she could help the definition of debt information, understanding concepts in formulating our own patterns implied by the power Shukna last part of Article 11 are "to.
In this last part of Article 11 had a bearing on the scope, attributed to Article 2 (2) Companies Ordinance, which would lay the beginnings of perception, which sought to soften the apparent stiffness of the instructions of Section 2 (2) and his ilk. Last part of Article 11 was Lodestone Rock of mental independence, empowers completed concepts Omovnihm explained the nature of the duties of weavers in many different width and depth than those explicitly expressed in law of liberty. As customary law was created in England, there was only an interpretation of expressions, so we also created the independent possibility of developing common law, not necessarily in the literal interpretation of expressions. Who distributed the existence of a process as described and the legal validity, theory and practice get at this late stage the ruling AE 81/55, 84, 91, 92 [2] above. So actually there is no question about the interpretation of terms but on their status, duties and rights of institutions operating under the laws of societies, as they are learned from the assemblage of this legal mask. And from the general to the particular; to understand nature of trust there is no need for interpretation of the law formulated but derive from the Torah's general corporate law, and the connection that was not Article 2 (2) an exclusive master class, as the drafters intended that the mandatory command in .1929
Requesting Philco claim, as stated, that a substantive interpretation, which is not bound by instructions of the law of liberty from plain English interpretation mandate, was to treat only can acts or omissions, that occurred after day Gimel Nissan Tsl"b -18.3.72, which is the beginning date
Amendment of rule and law orders Ordinance (No. 14), Tsl"b - .1972 thought this grounded assumption that before the above interpretation dominated by English law exclusively, but we have already seen above, that it was not. There is no place to return to this subject, as already mentioned above and Article 11 AE 81/55, 84, 91, 92 [2] above. Similar comments were made that the CAC 245/60 [3], p. '799 with a signal margin d.
Incidentally, for comparison, please contact the CAC 249/58 [4], which appeal to American ruling interpretation of the laws of the bills, without seeing that nothing contrary to the stated in Section 2 of Ordinance bills [New Version], like Article 2 (2) Companies Ordinance .
Needless to add, that further discussion is turned on innovation grounds to be acute as it is, but to renew the law.
Body matter, is not acceptable I believed that the definition of duties Ohboiotio company director and shareholder control over it, which served as the basis of the court's conclusions Slaror, was a novelty, the existing law roots absent or reasonable expectations of with it. Director's duty to the trust was a long time essentially a fundamentally important element of our corporate law.
Even when the proposed bill, which sought to expand the types of offenses of managers and others who betrayed their positions of trust, see the novelty of the Baron actually instructions in the law relating to freedom and obligation is valid, since the starting point of the proposal was, literally, the existence of responsibility, imposed the managers and trust under the laws of Banking (Amendment proposed introduction Companies Ordinance (No. 13), Tsl"b 1972, p. 128).
In this context, can also remind the words of Judge Romilly affair york 868, at [6] (1845) Midland Rly. C. V. Hudson-, and north adopted here in another '100/52 [5], p. .889 Compare Justice also Bowen v. ruling Earle Burland; [7] (1885) in re cape breton company; 97, at [8] (1902) and the words of Lord Herschell affair. Bentinck v. Enn 662, at [9] (1887). Interest shareholders saw - operative-fb palmer, company Scottish co; [10] (1959) Mayer. V. Wholesale Society ltd 464 (1951) th ed., By A.f. Topham 16, london). Precedents therefore, the acts of seeking Kosoi Drury and Philco Company, as described decision - state appeals court, would not bring Lgibosn of different conclusions, a hearing take place close to their actions in .1966

Sichumm of things, not to discover the laws, which Ntvss court of appeal, grounds for the existence of further discussion. Practices corporate law, which the ruling is based, well-anchored corporate law, which took place during the events happened, which turned this litigation. Laws regarding judicial legislation, as it were, as indicated by the arguments of plaintiff Philco, were not included in the ruling, therefore there is no room to discuss them further discussion.
In light of the above did not see a place to order another hearing and decided to reject the requests.

5,129,371 requestor DN 29/84 carry Bhutzaotio of the first respondent with linkage and interest until the actual payment amount of 000, 500 shekels.
DN 30/84 plaintiff bears Bhutzaotio of the first respondent with linkage and interest until the actual payment amount of 000, 500 shekels.






Given day, John Tevet Tshm"h (27.12.84).


Mini - Ratio:
* My daughter - a trial - further discussion - grounds for the existence
* My daughter - Law - Halacha verse - American Laws
* My daughter - Law - Halacha verse - English Laws
* Sources of Israeli law - foreign sources - Laws American
* Sources of Israeli law - foreign sources - Laws English
* Sources of Israeli law - foreign sources - contact them

Petitions for further discussion revolved around the questions, if the ruling object of the petition for further discussion renewal went, and if the court referral practices used in the United - States to be grounds for further discussion.

The Supreme Court ruled:
A.. Additional discussion is appealed. There is nothing between the explicit discussion of errors in testimonies Vaskt conclusions from them, according to the applicant's claim, and the essence is meant, the - by law, of discussion.
At. (1) reference American case law or case law of other countries, which tend Law similar to ours, there Gibosn our perceptions of or reference to such ruling to understand nature's rules similar statement accepted a long time.
(2) This trend has received special impetus with the enactment of Article 15 (c) payable to government and legal procedures, תש"ח - .1948 of this section did not make a decisive break from driving to beginning the trial, on the other as well as permission was not a preliminary study on the thoughts, views and attitudes that are not sources of English law.
(3) Section 11 orders payable to government and law served as a teacher through an initial ruling, which was influenced by the fact that, last part of Article 11 gave essentially the opinion that, political independence also leads to follow changes in the law. Interpretation. This created the basis for an independent interpretation of the law of freedom of the independent court of law formulation.
(4) the courts free to deviate from the precedents of English, whether based on provisions of section 11 orders payable to the government based on law and fact, courts are a sovereign country.
(5) in section 2 (2) Companies Ordinance was a reference interpretation of the Companies Ordinance under English law, but there was a more relevant time to tie our corporate law - the broad sense of that term - interpretation exclusively by English law. No country in this matter of interpretation of the command words formula that granting legal interpretation of the meaning of debts, which are an essential part of corporate law.
(6) for the completion Movnm meaning of concepts and teaching on the nature of duties over write command could look for a missing filling, other legal sources, which brought attention to similar topics as for the provisions of the same.
Action' is a notoriously vague term used to describe a action. This, however, is not helpful, for 'chose in Except that they confer no right to possession of a mass of interests which have little or nothing in common Rights under a contract to patents, copyrights and trade physical thing, and which range from purely personal .marks Contract, for as we have seen the memorandum and it is tempting to equate shares with rights under a Between the company and its members and it is these articles of association constitute a contract of some sort Conferred by the shares. But a share is something far doucments which directly or indirectly define the rights More than a mere contractual right in personam. This Shareholders... Is sufficiently clear from the rules relating to infant Widely quoted is that of farwell j. In borland's trustee the definition of a share which is, perhaps, the most :v. Steel A share is the interest of a shareholder in the" company measured by a sum of money, for the purpose Second, but also consisting of a series of mutual covenants of liability in the first place, and of interest in the Entered into by all the shareholders inter se in .[1948of the companies act 20section] accordance with Of the original incidents of the share. The contract contained in the articles of association is one Measured by a sum of money and made up of various a share is not a sum of money ... But is an interest . Rights contained in the contract, including the right"to a sum of money of a more or less amount Considerable and perhaps disproportionate stress on the it will be observed that this definition, though it lays Contractual nature of the shareholder's rights, also
-emphasises the fact that he has an interest in the com  
The artcles of association defines the nature of pany. The theory seems to be that the contract constituted by But instead confer some sort of proprietary interest in the rights, which however, are not purley personal rights The company though not in its property. The company Rights and duties, but also as a res, the object of rights itself is treated not merely as a person, the subject of And duties. In an attempt to distinguish the persona 'or 'share capital', but the use of the vague term from the res the latter is often described as 'capital stock Fact that the shareholder has rights in the company as 'capital' hardly makes for greater precision. It is the The member from the debenture holder whose rights well as against it, which, in legal theory, distinguishes This time the debenture) but are rights against the are also defined by contract(itself and not the articles ,. Company and if the debenture is secured, in its property"but never in the company itself (ההדגשות האחרונות הן במקור. היתר שלי - מ' ש'). r.r penningtonבספרו ,london) company law 61- 60( 1979,.th ed4): Shareholders' rights were purely contractual at common" law and in equity, and a share today is simply the , And the company's memoradum and bundle of contractual rights given to the shareholder by. 20, S1948, the companies act Articles... But the contractual rights which Transferable at common law at a time when other choses make up a share are of a peculiar nature. They were ,us in action were not legally assignable. Because of this0shares have been called 'property', which is innocu . Enough, provided that it is remembered that they do not"comprise any proprietary interst in the company's assets (ההדגשות שלי - מ' ש').
הצג סקריפט אנגלי
It seems that L.c.b. Gower emphasizes the contractual nature of spring - a proprietary stock together, and rr Pennington refers primarily to the contractual characteristics of the stock; However, to our business need not go here about setting up the legal nature of the stock, if the answer to the question fairly before us is whether you can create, given the nature, limiting the validity of the stock, as described.
As noted, a stock is essentially an expression of complex rights and obligations, which Thomihn Off-Label special contractual arrangements between the company and its shareholders and the shareholders themselves, arrangements, conducted in special ways, formulated the laws of Member States. Between the main rights are: right to vote in general meetings of shareholders, the right to receive dividends, the company Llachshiohlt division, and the right to participate unload surplus with the dissolution of the company. Rights enumerated rights are secondary and derivative obligations of the shareholders - the companies are granted all the laws and regulations of the company. Some Kogntiot, and some are Lhtnah on - the changing nature of each company. Indeed, it is difficult to limit and determine that the relationship of the shareholders and the company are purely contractual. There is a tighter link between company shareholders, although clearly that, in light legal buffer between the Company and members of the separate legal personality distinguished members of society to define her relationship is not proprietary. Company property is the property of shareholders; property of shareholders is stock, and the last are the link between the shareholders of the Company, or, in other words, an expression of interest as shareholders in the company.
The very nature of contractual rights, even if it is special and has additional features as described in that duration subject to the wishes of the parties contractual agreement that they can also agree in advance on the duration and set of their choice. In this respect the validity period of contraception to limit someone's life. Ie, can agree in advance that, with the death of the holder which can be torn right, then it no longer exists legally. Unlike Korforeliim assets, which existed in the world is objective, and law adds applies to the - by design rights and obligations that accompany them, the stock is among the assets they are a figment of the legal system. Stock came into being by way of issuance, and moves from the world with the dissolution of the Company or otherwise disabling it. All in all, according to general principles presented above do not find any reason why the overall rights and obligations, is bound to share certain, could be limited existence validity specified period of time, the theme with the death of someone, and, if given that the explicit consent of the parties to contractual relevant, and dressed in this agreement, as required by the nature of the stock way of determining the rights and obligations thereof.

.8 Trailing poser is whether the restriction is the existence of a share capital reduction, which is prohibited because under section 45 payable to the companies. Article 45 provides that:
"5 (1) the limited company shares, or limited company that has a guaranteed share capital can reduce a special resolution according to the its share capital on the road, the conditions the court approves it, especially without harm by the general nature of that authority above, can she --
(A) cancel or reduce the liability on shares of its shares on the equity shares not yet been removed, or (b) be revoked or swelling of the time commitment of some of its shares or not canceled or swelling, cancel any paid share capital or lost or not in exchange assets ( Active) exist; or (c) will be revoked or swelling of the time commitment of some of its shares or not swelling or canceled, pay all outstanding shares of both capital and surplus of the company's needs, and can it, when necessary and learned they need to change the memo by reducing its share capital and its shares accordingly.
(2) a special resolution in accordance with this section is called this command decision to reduce the fund shares.
There are specific cases, which can be reached without the need to reduce capital and permanent judicial proceedings in the above 45, which are primary among them: (a) when a company issues shares in Premiere, which can be redeemable under section 38 payable to the companies. The company - an exception that a company can buy and sell shares ¬ can redeem shares, the shares issued in the first place premiere, given maturity.
(B) forfeiture of shares under section 42 payable to the companies:
On - the provision of the law in question, authorized to foreclose on a member's shares for non members - pay the amounts that come for them (see: AE 244/55 [2]).
(C) delivery of shares. R.r. Pannington this book discusses this other type of cases, which can be reached to reduce capital without court approval. This, called, of shares Surrneder is essentially a shortcut to the forfeiture procedure. when the company is authorized foreclose
הצג סקריפט אנגלי
Shares in respect of non - payment, it also can accept the voluntary return of those shares, forfeiture at issue, when no power of shareholder to payments required of him, and when the return is for the benefit of society. In this case the company can re-issue (re-issue) the shares were returned to her. Says 164
163r.r. Pennington, supra at about this: It it Questionable whether a Forfeiture or surrender of "shares does really reduce the company's capital. At first Sight it appears to do so, because the company can not It looks as though the shares are Extinguished. But this be treated as a Transferee of the shares, and therefore Are not canceled by being forfeited or surrendered, but is not necessarily the result. The cases show that shares Issued. No-Dividend is paid in respect of them, and, Presumably, are merely in Abeyance until they are re-meetings, but that does not mean that they cease to no votes can be given in respect of them at Shareholders Issued the full rights attached-issued shares are the same shares exist. When they are re-to them Revive. The re That were forfeited or surrendered and not new shares. "issued in place of the forfeited or surrendered ones See also:. nd ed., by 22 cm, london) fb palmer, company law 384, 330 (1976. Schmitthoff (d) subject to certain conditions possible return without the authorization of the court if not paid for - by the company for compensation. say 165 - 164r.r. Pennington, supra at in this context: A company may accept a surrender of fully paid shares "from a Shareholder if it gives no consideration out of ... its assets in return The surrender has been in consideration of the company in most of the cases which have come before the courts Issuing new shares with different rights in exchange Company does not then Distribute any of its assets as for the surrendered shares. This is Permissible, for the As paid up on the new shares must not Exceed the amount consideration for the surrender. But the amount paid Credited ... up on the surrendered ones
הצג סקריפט אנגלי
, is that they go into Abeyance, but full rights and the effect of a surrender of shares, as was shown above Isuues them, and the Reissued shares are the same Liablities attached to them when the company Revive-re ... shares as the Surrenderd ones Issue surrendered shares at any-price, and they are paid up in the hands of the person the company may re Who takes them to the same Extent as they were paid Cancel the surrendered shares so as to prevent their up at the date of surrender. If the company Wished to Issue, it can do so only under the provisions dealt-with below relating to reduction of capital with the re They can not be canceled under; the provision dealt with above, Whereby shares which Sanction of the court. Have never been issued may be canceled without the "court's approval (e) the company can reduce an issued share capital, if authorized to do so by regulations.
The question is, if our business falls within one of the cases mentioned.
Respondents offer a grant to Regulation 35 the meaning of the return of stock-class holding company after the death of them. Such an interpretation is unacceptable to me, for him it was the authors intention installation, should the prosecutor in so many words. Commentary explained, rising from the above, is that it shares, aggressive expires and cancel them with the holder's death. Here is also a case of forfeiture of shares, as petitioners claim. Fully paid shares here, so the company can not get up the expropriation authority.
Any reduction of capital, even the most minimum, requires, for - according to this section, Htmlautm of two conditions - a decision a special meeting of shareholders and approval of the court order, maintains the reduction, and I'll be back here Lmgmtn Olrkan of these provisions, discussed in the ruling , where further discussion is concerned.
The above indicates, therefore, that to obtain the result of idle stock A but - by a special decision the court approval, as stated in Section 45 Companies Ordinance. True, our business does not fall within one of the options listed explicitly in Article 45 above,
However, these options are, according to a formula of the provision of the law should, as a just examples, does not take an exhaustive list of cases of capital reduction.
However, when concluded, I read the judgments of my friends and dignitaries, President Judge Barak, they say Scnaoni, with all due respect, that in the case Danan not determine the law on Article 45 Applicability of the Companies Ordinance, since the petitioners did not meet the burden imposed on them and proved their claim .
.9 Next question is whether the power of argument motivate, claims against petitioners our case, to cure a defect that train, a negative answer.
We take action here, which is a deviation from the forces of society. This matter seem worthy President's remarks on appeal, according to which no power of shareholders to ratify actions exceed the authority of the company and that they largely idle (. Lcb 164gower, supra at). Although petitioners before us are shareholders in the company, but if the shareholders, they are members of society, they can not agree to reaffirm action, which is beyond the power of society, let alone consent of third parties would not help to validate the action, which is essentially idle.
.10 Which - yes My view is that Regulation 35 A is, indeed, valid, and does not contradict the provisions of inheritance law and corporate law.
President M. Landau: I agree experience - opinions of my friends and dignitaries, judges Shamgar and Barak, regarding the lack of contradiction between Regulation 35 and discussed in a Section 8 (a) of the inheritance law, and I agree, that before us a case of forfeiture of shares or the return of company shares but the shares due to the death of the expiry of their husbands. In relation to another question, if there is such confiscated because reducing the stock of capital within Article 45 of the Companies Ordinance, requires a special decision - by the Company and approval of the court, I avoided --
As one of the three judges, discussed the appeal, which deals with this petition - Mlhoot my mind about that question seemed complicated that undermine Hamidoh not on the agenda on the grounds that the appeal properly, and a written summary of the appeal which touched only indirectly, in connection with the claim of forfeiture claimed. This petition the petitioners' counsel argues, that it was right, but I think still, that distinguish the forfeiture claim, appeal uploaded correctly, and argued that even if not ahead of forfeiture or return of shares, it was still formally in terms of capital reduction. Anyway, today, when we come to discuss additional discussion, it does not matter if I was right Bhimnoti discussing this issue, but most important is, if the appeal was discontinued gone, can not stand now for further discussion, because its importance. Hardness or renewal, as stated in paragraph 8 (b) of the Law Courts, Tshi"z - .1957 answer
It depends on it, if at least two of the three appeal judges ruled she went a problem, otherwise there was no ruling went on - as the Court House - Law. As noted above, expressly refrained me from doing so. The substantial social, Judge Ben - Porath, paragraph, before us a case of capital reduction, which applies Article 45 of the Companies Ordinance. Judge firstborn, who wrote the main opinion on appeal, discussed this issue, and indeed there are farms - opinion statements, which can be understood, also pro version, buy 35 brings a reduction of capital. But, at the end of farm - he thought he was finished saying that "left no doubt in my mind if this matter can conclude that it is a case that has a share capital reduction of the company formally, something which can not be done without court approval, and he puts the final conclusion interest in driving (and that did not agree with him and with substantial social, honorable members of Justice Shamgar get my mind on this matter). Consequently, the appeal did not stop the Supreme Court, sitting in three, went to this problem, so even though she does not need this additional discussion.
In my opinion, has kept expansion frame the discussion beyond its destination, ie, further discussion of law, stopped the composition of the three, as it may guide later houses - Law and other courts. Without gone verse can be no further discussion law verse.

For these reasons, I agree to the postponement of this petition.
Justice A. Barak: .1 lack the language skills of regulation that caused considerable legal difficulties, in front of them were company shareholders and the courts on hand. If all he wanted to achieve denial of rights management and redundancy with the death of a stock, you could achieve this result by way of provision by regulations, that the death of a scoring scale change management redundancy rights, linked Lmniito. Fraktika this is acceptable in Israel, it is about - avoiding some of the difficulties of her mouth, standing in front of us this additional discussion. But the draft regulations the company had not been the proper way, creating a strange creature, with all my search did not find unmatched legal literature, pertaining to shares of a company. As a result, were more questions before us, answer some of them is not easy at all.
.2 Bhintn of these questions must be done against the correct interpretation of the installation in question, which tongue is this:
"Notwithstanding the provisions of regulations 34 to 35 inclusive, in the case of death of a shareholder Ho"s A (voting) - These shares are not transferable heirs or any other person".
On - the wording on the question of verbal offenses installation Dana shares after death. It is nothing on the question of validity of the stock itself. Apparently can be said that the stock itself continues
To insist, without be transferred to heirs or to anyone else. On - according to this approach up the question, Who is a bond, and who may run the power, inherent in it? Shut installation and interpreted. Of course the company itself is not a shareholder, since law is that the company may not acquire its shares: [11] (1887). Trevor v. Whitworth is also assumed that the intention was that the shares have become a "Itltlin not have an" and - yes can any person, subject to any law, property ownership in which perception and intention to get them "(Article 3 of Law Hmitltlin, 1971) . seems therefore that there is no escaping the conclusion that a reasonable interpretation of installation, as it was done "by assessing their opinions of the parties" (Article 24 Law of Contracts (General Part), 1973), is that with the death of a stock expires stock itself. Found that we are not interested, but with provision, limiting the Abiroth of stock, but our interest with a provision that permits the death of a share stock ceased to exist. Question, arising this additional discussion, is whether such provision is valid. This question has been raised before us as to the Supreme Court, discussing her AE 708/79, from the perspective of the laws of inheritance than from the perspective of corporate law (general and special) that. Turned on - so, for this test.

Inheritance Laws

3 Section 8 (a) Succession Law states:
"Agreement on the legacy of a man giving up his inheritance made that person's life ¬ idle.
It seems that suggest the law saw "undesirable speculation, and even immoral, Agreement on Succession future such renunciation of inheritance" (Ministry of Justice, Succession Law (Tshi"b) 48). On this approach can be shared. Why an agreement on the joint account bank between people - a couple, whereby the death of one pass right after, it has an ethical speculation (see: 682/74 [1], p. 763)? more convincing explanation, that "the legislature did not want to tie himself Lmoris possibility of inheritance on - by any arrangement or agreement to give him a team option which will be able to return at will until the day he died "(Justice Keester AE 155/73 [3], p. 676). This reasoning also does not provide a clean.
Agreement deceased's life tie him his life. Why can not order the inheritance after his death? It seems that these doubts and others brought judges concluded that the provision of Article 8 (a) should be interpreted as "the maximum reduction through carefully grave" (Justice H. Cohen AE 682/74 [1], p. .762 See also: A. 'Yadin, "an expanded view of a joint bank account," the lawyer to (תש"ם - Tshm"a) 572). on - according to this approach there is room to make the question - which Judge D. Harvest, the first instance, made it -- If you do not establish that the expression "agreement" in section 8 (a) the law of succession, does not include articles of incorporation of a company. Moreover, even if the articles of incorporation are an "agreement", is not to say that the provisions of Article 8 Application being
"Companies Ordinance specific legislation regulating the relationship between union members compared with the inheritance law that regulates relations between relatives, usually, or the benefit under a will by the will of the commandment" (Judge D. Katzir first instance)? First approach is an interpretive approach, reducing the teaching of which Article 8, while the second approach reduces the Applicability of Article 8 under the law, which is external to him. Is there a place for adoption of these views? .4 Does "internal", whereby articles of incorporation are not included in an "agreement" for the purposes of Article 8 of the law of succession, may be based on the opinions of those judges and writers who were not prepared to see articles of incorporation contract for all purposes. For example, Judge J. Cohen, that "section 19 (1) does not say, regulations are a contract, but their binding force is the power of the contract" (AE 82/73 [4], p. 77-78) . Professor Procaccia believes that the articles of incorporation are not a contract within the meaning of this term contracts Law (General Part) (see: J. Procaccia, "Applicability of contracts Law (general part) the articles of incorporation of the company" the notional sentence ( Tsl"o - L"z) 491). shall be the power of this approach as will be found and stopped ¬ tenure, whereby articles of incorporation, they contract for all purposes (see: AE 180/75 [5], p. 228) -- It seems to me that there is no alternative Mlhhil the teaching section 8 (a) the inheritance law and regulations regarding a memorandum of a company. Flavors that are: First, even the articles of incorporation are not a contract, the power of their contract, and if a contract of inheritance of a man off, articles of incorporation a provision regarding the inheritance of an idle person. In other words, even looks - as there is, I think, see - articles of incorporation "statutory contract" is a contract, sui Generis then by order of the Companies Ordinance Article 19 have to see the articles of incorporation require the company to friends as well, as if made by shareholders and society, and Covenants contained on the part of each member ... s "and on the part of the company to Pbserve all the Proviions." of the memorandum and the articles
"covenant" is, as noted, must "agreement" for the purposes of Article 8 (a) the law of succession.
Indeed - and this is the second point - hard to see any difference between a contract to open a bank account or a partnership contract, which must fall frame expression "agreement", the fixed section 8 (a) the law of succession, and the articles of incorporation. Another approach may create a large opening to work around the law, even if you can visit us have the Caymans.
.5 Means "external", that the inheritance law legally General Companies Ordinance was postponed because a specific law, is facing criticism, even taste that there is no provision by order companies --

No explicit or implicit - can be put against contradicts the teaching of Section 8 (a) the law of succession. True, the illness of Section 8 (a) the inheritance law and regulations may cause a memorandum to the island - very comfortable life possible disruption of commerce. It is also the point application of this provision a contract or partnership contract to open a bank account or create a piggy bank. The appropriate way to handle this matter is by way of legislative review, if no order of Section 8 (a) too broad, and if it is desirable to prevent Applicability of purchase agreements used economically worthy goal. Indeed, it seems to me that Section 8 (a) may create a planning framework is too rigid a deal death investor (see: death, e. Younger 1 (1967). Brooklyn l. Rev. 34, "and the close corporation) but as long as the legislature did not change this provision, we do not free individuals to ignore it.
.6 Do memorandum or regulatory provision that the death of a stock will cease to exist in construction, is teaching "about the legacy of a man"? President Judge reactor - the court ruling, he added that the topic for discussion - and members of the Justice Shamgar, agree with the president, the debate itself - answer this question in the negative, because, in their opinion, this provision is to determine arrangements for inheritance, but interest in determining the contents of the assets, They apply the usual succession arrangements. This approach is correct, with all due respect, but does not answer the judge's position Ben - Porath decision - her state, which, in practice, with cancellation scoring pass to the rights attaching to the other shareholders and to the heirs. This position is strengthened in light of the ruling - this sentence, which saw earnings per share making a stock transfer of property is denied because the other shareholders in the sense the term "transfer" estate tax law, תש"ט - 1949 (see: AE 269/78 [6]) . Like everyone agrees that teaching regulations private company, which had but two shareholders, whereby the death of a stock goes right to the other remaining alive, she orders "regarding a person's inheritance. What's between this and teaching regulations, whereby the death of a construction bond is canceled? In practice, the meaning of this provision is that a stock, remaining alive, makes the same rights to their owners, who were before by the deceased. No practical difference between the two cases, he would be justified difference went? .7 Indeed, the question requiring a decision, is this: Does the phrase "Agreement on the legacy of a man" applies only to the Agreement, which provisions are Hnormatibiot which states that the right passes to another person's death first; or whether it extends also expressed agreement , which orders Hnormatibiot not determine anything about the transfer of right, but the result of the agreement, in practice, is that the right of a person found by the death of another with the first? This question is not easy at all. The phrase "Agreement on the legacy of a man" is quite Lacon, and may include within each of the above approaches. She definitely deserves a choice, the - yes, a question of legal policy. In this context it seems to me that there prefer the first interpretation,
He does "normative", the - the second interpretation, he means "physical". Flavors, bringing me to this, are two: a.. First, it seems to me that he should interpret Section 8 (a) the law of succession, as he will be limited to those cases, including the right to pass another person's death first.
It seems to me that part of Section 8 (a) the law of succession, the - the legislative intent, we have a right, which is passed to another person with death - the characteristics, scope weaknesses. Such is the case, when Reuben makes a deal with Shimon instructing him that with his death shall pass its own right Simon (and the heirs - the order of succession). After Reuben's death, right, that will be by Simon, is a former right of Reuben. But naturally, the - yes, that all claims of ownership or protection, you can raise against Reuben, also can be put against Simon, as Simon the right to essentially the same gain, which was first of Reuben. Different thing when we issue the agreement, which does not move right, but the result, in practice, is moving right. Exact analytic analysis shows that this last case we have no interest in transferring the right characteristics, scope weaknesses, but we have a right to independent reproduction of the other, which draws its strength of his right to independence. Tall case, it becomes an agreement between the only two shareholders of a private company, which with the passing of one stock expires. Of course with the passing of a share of stock becomes a right to the other owner of her company. However, the full right of a stock, which remains alive, was essentially right, was deceased shareholder. The right of a stock, which remains alive, is independent of his own original right, the economic program has expanded because of the death of the other shareholder. In this respect there is no difference between this case and the case, in which Julie and Chris make an agreement, whereby Reuven Shimon rent property, and the death of Reuben Ttbtl lease. Are an example of its shares and patterned lease, with death did not pass the right of the deceased contract owner. The company designs, with the death of a stock does not go right shareholder, remained alive. Rent pattern, not the lessee becomes the owner himself. In both cases, substantial change in economic value of the right to a contract, which remains alive. In both cases also applies to changing legal status of remaining alive, in the sense that the independent right to civilize. In light of the above similarities between these two modes, should the matter is that the teaching section 8 (a) be liable to inheritance law is equal. Because according Dkoli Alma matter is no less rent frame section 8 (a) the law of succession, it seems to apply to Dean regarding cancellation of stock.
At. Second, we have already seen (AE 682/74 [1], p. 762) that is acceptable to chew, because there are to interpret the provision of Article 8 (a) "the maximum reduction through serious and carefully.
In this framework can be found to reduce Kosher Applicability of Section 8 (a) the law of succession Normatibiot transfers only.
.8 Attitude in question is based on the assumption that the arrangement made between the parties, is at the end - heart, he is healthy and represents an economic interest. Not true, if the only purpose of
Arrangement is Akifto of Section 8 (a) the law of succession. On - yes, if proven, purpose of transfer parties dress cultural dress, will place an indirect rule of law. For example, if all parties aim of founding the company is evasive teaching section 8 (a) the law of succession, there is the usual rule is contrary to the law. Matter before us proved, that the purpose of Regulation 35 of the Regulations a company was not to circumvent the inheritance arrangements, but to give legal dressed for that matter terminate the management and redundancy rights, which were the same with a stock, you can personal trust. In these circumstances it seems to me that disqualify a regulation 35, against the laws of inheritance.

Corporate Law - general considerations
.9 Claims came before us argued - force petitioners that by general principles of corporate law, no shareholder may determine that the amount of a stock will cease to exist in its construction. Asks come - power petitioners:
"Is the power of agreement between partners in real estate to determine that the death of one of the partners expires deceased partner's ownership of land?" For, as the answer to this question is no, it has to say no to the question of whether shareholders may agree that the death of one Ttbtl construction. To come - force petitioners' stock is not a contract. She is nothing but property rights and grants.
.10 Indeed, the stock has many faces, and defining it on - the formula one short. Similarly, the definition may vary - according to the special issue in the discussion. For example, for criminal liability for theft or civil liability for damages can be seen in stock - or rather, in stock - shake that a property right owner. On - yes, there may be cases - mainly bearer shares - including the transfer of stock from another reporter has also transfer rights, which constitute the bond. In terms of problem, where we are, have to share judicial unit, the Center's bus property rights - personal . tape that included the right against the Company declared dividends and assets liquidation and voting included in company meetings, not just right "in the narrow sense" to society, but also right in the sense of "freedom" and "spirit" in society, because the stock does rise some the main organ of society, is General Assembly (see: AE 368/78 [7], p. 184).
.11 Rights, wedding tape, which is the legal unit called a stock, not the rights status, and not ownership rights. Is a stock "with" society, and the owner of the stock ownership of company assets. Rights, which constitute the bond, are property rights - personal. Origin of these rights is essentially agreements, namely, that "statutory contract" referred to
Articles of incorporation, partly Sttotri, ie, instructions Hkogntiot Ohdisfozitibiot the Companies Ordinance. Nature of property - personal rights, which constitute the bond, leading result, the parties to the treaty, which creates the same rights, free to determine the content of rights as they wish, provided that the agreement will not be illegal, immoral or contradictory to public policy.

הצג סקריפט אנגלי
Evident and she ceased to exist, but a decline in membership is grounds for dissolution. What's wrong is that? Shareholders may advance to limit the amount of time, which they seek to hold the company itself, in that for the time in question will be grounds for dissolution. Why not be able to cancel the shares, thereby creating a factual foundation, which may lead to the dismantling of the company? .15 More convincing is the argument that precisely the nature of property - personal stock trailing the result that the share owner's life offense, inherited his death. Cancel stock with the owner's death contradicts this basic trend. It can be said against that property right is not dragging the Abiroth anyway. For example, the law stipulates check charges, 1969, that right is the check, unless revoked Abiroth by agreement between debtor and creditor (Section 1 (a)). On - yes I see no preventive principle that, because Abiroth denied a share of owner's life. However, we can leave this question to study, in light of the Companies Ordinance tongue, which may be interpreted as states that can limit but not to deny the crimes share (Section 31 Companies Ordinance). Indeed, under similar provisions were houses -- trial in the United - States and Canada, which ruled that you can not deny the Abiroth of stock owned in my life. (See: 1090D. 3A.lr 61; 1318D. 2A.lr 65; 1159a.l.r65). be justice in this matter as may be, does not issue to prevent the creation of a stock - like the issue before us - life passed her, but ceased to exist with his death. provisions of section 31 payable to companies share their business crimes and share life with death (see: AE 580/69 [8], p. '77). True, some say that the denial Abiroth late stages of a stock does not hold.
Says 527 (1950) levy, private corporations and their control: The validity of a provision in the articles excluding "transmission of the shares in case of death has not been the better view is that such a provision would;. Decided" be void but The learned author explains not mind this, and it is not acceptable to me. Companies Ordinance in the absence of provision denying it, I see no point, why can not the parties, under contractual freedom given to them, design right to buy - personally, duration of life of its owner is attracted.
.16 Already insisted that the contractual freedom to shape the scope of the rights attaching to share, not total freedom, but only relative freedom. For example, do not use this freedom to oppress the minority shareholders or to harm creditors. The question of exploitation does not occur in minority interest before us, because regulations change the company received unanimous. But what is change it to hurt creditors? This question raises the issue of capital reduction, which is discussed now.


Capital reduction
.17 Is Teaching regulations - the original regulations and new regulations - that a stock will cease to exist with the death of its owner, because it has a capital reduction is prohibited? This question was discussed decision - Judge's Ruling reactor, which ruled that the question is whether we can say, there's a capital reduction. The substantial social, Judge Ben - Porath, paragraph, before us a case of capital reduction is forbidden, you can only prepare the procedure set in Article 45 Companies Ordinance. President refrained Mlhoot opinion on this issue. Believes that additional discussion Honorable members, Justice Shamgar, the expiry of shares is prohibited capital reduction, which can train only permanent way mentioned in section 45. Members of the president believes that we discuss this question under discussion. As I see below, if it occurs in our case, reduction of capital, it is illegal, harms the rights of third parties - creditors. Under these circumstances, when I woke question before us, should he will take a position either way. Body it is my opinion that the question of whether the death of a share capital reduction brings the company can not be a single answer, but the answer varies - according to circumstances. Matter before us, claiming to reduce the burden of capital prohibited prove his point, took it were not petitioners. On - yes I reject this argument. And Nimokii: .18 principle that reducing the company's office is prohibited, Bfsiktm origin of the courts, which sought to ensure "safety cushion" creditors of the company. Rightly pointed out, prof. L.c.b. Cower 218, supra at admit that English judges of the 19th century, that without legislative aid to a real set way to ruling the rules, to protect the creditors and shareholders against the company's term reduction. This need to protect the breathing was born precisely because of the limited liability of shareholders. Since creditor can not get shareholder assets, the only security company is the property itself, it must be ensured that her fortune will be made available to the company's outstanding debts to creditors through it, and returns to shareholders, whether by way of distribution of dividends, whether by way of cancellation of debts and otherwise . As watson lord affair from 424 to 423, at [11] trevor: Up capital may be Diminished or lost in the course-paid "That is a result which no; but persons who deal with, and of the company's trading; legislation can prevent Amount of capital already paid, as well as upon the the fact that the company is trading with a certain give credit to a limited company, Naturally rely upon Responsibility of its members for the capital remaining and they are entitled to assume that no part of; the capital which has been paid into the coffers at the call
. Company has been subsequently paid out, except in the "legitimate course of its business by virtue of this principle has stopped, that the company may not acquire its shares, can not divide dividends from capital, and can not get stock Discount (see Roper v. Wallroth) .; Ooregum gold mining company of india v. Roper [13] (1892) insisted. Jessel M.r case in re, exchange banking 533, at [14] (1882) (Filcroft's case). Co., saying: The Creditor has no debtor but that Impalpable thing "the corporation, which has no property except the Say, gives credit to the capital, gives credit to the company assets of the business. The Creditor, therefore, may i On the faith of the representation that the capital, and he has therefore a right to say that the corporation shall be applied only for the Purpoes of the business. "Shall keep its capital and not return it to the Shareholders Over time it became clear that business may be circumstances in which he justified in terms of consideration of the Company, to reduction in office, while maintaining the proper interests of creditors. To do this repaired corporate law, rules of membership were introduced provisions that allow a reduction in capital company, provided that existed special procedures, provided that. This is the background to Article 42 Companies Ordinance, which allows reduction of capital by way of forfeiture of shares. insisted that Justice Agranat extensively CAC 244/55 [2], p. 1503, saying:
"Indeed, this power to expropriate shares ... is an authority - ordinary extraordinary, as the principle of law is, as implied, that the company must ensure, in favor of his creditors, that the issued share capital will remain intact; because society would not be allowed to decrease without receive advance permission to by a house - court ... because what the law allows that the company will include regulatory authority to confiscate non-paid shares (fully paid or not), authority is extraordinarily harsh one? answer is: The law grants the company this means precisely that of considering the principle ¬ recently mentioned to enable it to ensure that the issued share capital will remain and will be used to pay debts reach his creditors. The very threat of regulation authorizing the north managers expropriate shares of a friend, not filled after the payment request sent to him, may give rise to a payment amount due from him on his stocks.

This is also the background to its enactment of Article 45 Companies Ordinance, the following allow the company to reduce its shareholders under certain conditions. Doc: Section 45 is out of the Companies Ordinance to prohibit capital reduction. Capital reduction prohibition law originated in verse, on the stamped Companies Ordinance passed. Article 45 of the Ordinance came to allow reduction of capital in certain cases, if that assumption, rising out of it, is, except for those cases of capital reduction is prohibited.
.19 Conclusion, obvious to this analysis, is that the first question, have to answer, is whether there is a certain action because the reduction of capital is prohibited. Only if the answer is yes, stand up the second question, if the prohibition can be overcome by special permit provisions of the Companies Ordinance. Indeed, often encountered situations courts, ostensibly to reduce capital and were forbidden, but after examination and testing determined that there is no reduction of capital involved, and - well prepared the action without having to resort to the procedure, the fixed section 45 Companies Ordinance (see 162r.r. Pennington, supra at).
.20 Hence, the question facing us is whether the cancellation of shares in the death of their husbands because the injury has confidence in "rhythm" of creditors, and - yes a capital reduction is prohibited. In my opinion, not to give a sharp answer to this question partly because it all depends on circumstances. Tall case, where the share Hmtbtlt yet fully paid, and Bitola's debt erased a stock or successors. In this case there must be a capital reduction is forbidden, for cancellation of stock reduces the assets - ie the right stock fees - of the company. The same is true if the cancellation involves the return of stock funds heirs of a deceased share, for cancellation of share capital involves the return to shareholders. Similarly there could be reducing capital, even if fully paid shares are revoked, Ovitoln does not involve the return of property and heirs. As we know, the cancellation of shares (the passive side of the balance sheet) trailing match the structure of the company's assets (the active side of the balance sheet). If this creates a matching fund, from which the company seeks to divide dividends, it could not divide before cancellation, it brings to the cancellation of the share capital reduction. However, if the death of shareholder cancel fully paid shares, the cancellation does not involve, not directly or indirectly, transfer of capital to shareholders, it does not dismiss all this capital reduction.
.21 Matter before us there is no factual data, that have to help resolve the question of whether practice leads to cancellation of share capital reduction. The judge noted reactor decision - countries that fully paid shares are revoked, Ovbitoln not make a commitment the company in return capital heirs. But this is not enough. Was created as a result of cancellation Fund dividend distribution? Does David actually divided? All these do not answer the material at hand. It seems to me that the burden of proof lies on the matter before us the petitioners, who claim that the cancellation involves reducing the capital stock is prohibited. Burden that they were not, and - yes I would reject this claim.

.22 When I got the conclusion that no matter we have proved that reducing the capital is prohibited, in any case I do not need to discuss the question of what law, if speculative, as members, Justice Shamgar, a capital reduction that occurred. Accepted me in this matter the opinion of the distinguished members of that occurrence of a capital reduction is not enough to cancel the new installation, but to "complete the work to prepare the consequences" of the Company to comply with provisions of Section 45 Companies Ordinance. In this context the question arises in any case, if the deceased's shares voting shareholders, and if the heirs are entitled to vote against the reduction. That we have not heard any complaints, and - yes, he should not that extend about. However I would like to note that even the deceased's shares may vote meeting of members - and interest is dependent on other provisions, articles of incorporation set - then it seems to me that this vote must vote those shares for capital reduction. This commitment, he took upon himself the deceased, and that obligation, imposed on his successors (see paragraph 19 (1) Companies Ordinance). If we want, we can see that means, establish regulations necessary implied that the stock is not an offense and - yes expires; if we want, we can see that the accompanying charge, from the obligation of shareholders to act in an acceptable late at the end - note to the above regulations. Inherit behavior, which is not inconsistent with the existence of a capital reduction, and giving effect to the provisions the new installation is not acceptable behavior at the end of the road - a heart, and Lmnah Court (see Article 39 Contracts Law (General Part), and HCJ 59/80 [9]) .

Motivate
.23 Ruling of the Supreme Court CAC 708/79 disagreement regarding the question of whether petitioners are prevented Mltaon that the deceased's shares ceased to exist with his death. Judges firstborn son - Porat stated that driving is against the claim of the petitioners. On the other hand stated President that claim would not help motivate the respondents, for an company in violation of Section 8 (a) the law of succession or prosecuted against forfeiture is an action that exceeds the authority of the company itself and not just authority directors, and motivate claim can cure this defect. Another debate is joined distinguished members Justice Shamgar, the president's position. In his opinion, there is no power of shareholders to approve actions that exceed authority company, and that they, therefore, largely idle, and - yes all the more so, the consent of the petitioners would not help third parties to validate action , which is essentially idle. light I stood, that the provision of the regulations is not a contradiction of the law of succession, and that no proof of any reduction of capital, I have no need at all to discuss the question of motive. However, I would like to mention these two: First, the claim arising before us is moving towards the company's claim but moving towards the petitioners claim, given their new arrangement, and - yes motors Mlhtchs him. As we have seen, the track Haofratibi, where this argument may find a way out should he vote heirs constraint for Bitoln meeting of members of the stock they own. Such a vote must not contradict the inheritance law (since the petitioners are the heirs of the deceased), it is a step towards having the necessary procedures for the reduction of capital.

Second, technically, I can not accept the position of President Judge Shamgar, that interest us here in action, stepmother forces the company (ultra Vires) I think we have no interest here stepmother action forces the company, but we have a illegal action. Indeed, nothing will change the answer, if it turns out that the company's memorandum had been given the necessary powers to carry out those activities? Of course no matter that. The question before us is not a question of kashrut, but a question of legality. On - yes, this question remained standing even after the Israeli legislature abolished Companies Amendment Ordinance (No. 17), Tshm"a 1980, the doctrine of ultra - Shears. Tall interest of the Agreement on the legacy of a man. Question itself was occurs, if we had a son - a person or partnership - for which a claim has no ultra - Shears - not just the company. claim a capital reduction is not covered at work, stepmother forces of society - because it was possible to correct this flaw - by changing the clause objectives memorandum - but in action, the law forbade it. Indeed, it is regrettable that President Agranat saw fit AE 244/55 [2] mentioned to analyze the issue of forfeiture in terms of deviation authority. As the capital reduction, although the issue of forfeiture, interest and legality of actions the company Bcsharoth - and - well not unusual authority of the company. . Prof. L.c.b. Gower insisted that unfortunately sometimes require courts to the concept) exception authority in inaccurate, and use that time to resort to the principles of non-valid. The learned author says (165supra at): Sometimes, indeed, the courts have given a still Wider "meaning to ultra Vires by applying it to any activity the company Which is Prevented by law from carrying Ot explain the Prohibition of a reduction of capital, out . For example, the ultra Vires doctrine has been invoked Vires for a company to purchase its own shares so that whether in trevor v. Whithworth it was said to be ultra. or not it was Empowered to do so by its memorandum Restrict the expression ultra Vires to those things which this use of the expression is Confusing. It is better to a company is Incapable of doing because they are not There is no need to Invoke it; in connection with activities which are prohibited by its memorandum Authorised

"even though in the Authorised Memorondum
Of course, this is not an obvious conclusion that the claim is driving a good claim against the company. Even if the company's decision to amend the regulations by way of adding a regulation 35, is not exceeded their authority, still have to say - on - the minds of those not accepted me, because it has a conflict of laws of inheritance laws reducing the capital - because it is an illegal decision, and asked is, if there
The driving force to overcome it. As noted above, the light stood in principle, subject to the first remark, I have to take a stand on this issue. The result is that I join the result, which came members of the president, ie, I reject the petition and no additional permanent teaching farm - Justice Shamgar's opinion about capital reduction.
Judge M. Maisky: My friends and respected our hearts the issue, to which we are required, a comprehensive and thorough manner farms - opinions trainer, that I'm afraid, that as I try to add only Agra. Mostly of things I have accepted the conclusion that there is no contradiction between installation 35 and is discussed in a Section 8 (a) the law of succession, as joins I position, that the said installation brings forfeiture of shares is prohibited in terms of Companies Ordinance. In this context another question first bothered another aspect, which, however, did not load on - by island - with a power law: Do not install this pre-cut frozen on this company, at no longer be alive despite holding Class A shares, which only have a right General Assembly vote on the board? Since these shares no crimes, no inherited not any other person, the company may be in a position that expired all such shares due to the death of all Mhazyakihn, and she is in a state of utter stagnation and without any ability to act, that only doomed to liquidation. And, apparently, against the public interest and policy of corporate law. Convinced by his words of the distinguished members, Justice Barak, that is not enough to prevent an attacker will of all shareholders, even if will cause dissolution of special circumstances, a situation which must be predicted, the time came for consent to install an installation.
As the distinguished members, Justice Shamgar, we propose that it be returned home - to maintain law Kama's instructions Companies Ordinance Section 45 regarding the reduction of capital, it can I join the conclusion reached her distinguished President Barak, that undermine not proved, that the cancellation of shares involved reducing capital, and for that reason need not claim that additional discussion.
On - the question this far I am not required to take a position on the question of motive, also discussed the additional discussion, and only edge it says that I am inclined to the opinion, suggested the original hearing - by honorary judges firstborn son - Porat. All in all, I'm of the opinion, rejected the petition.
Justice M. Ben - Porath: I think she made it clear the CAC as 708/79, and considerations guided muscle then there are the eyes.
I think there is no distinction between interpretation "Hnormatibi" means "physical" Section 8 (a) the law of succession, as the terminology, which had taken distinguished members, Justice Barak.
AE 682/74 [1], p. 762 and - 763 (from Justice H. Cohen), though determined --

Determine acceptable Ali --

That Section 8 (a) above law (hereinafter - the law) applies only when inheritance agreements, namely,
"Agreements that purport to transfer or inheritance heir to the heir who is not an heir not to - the - and the law - the law as written will. In question is providing or the negative of the right of inheritance" (my emphasis - m at). And mind - It stops there, because transactions, covering only assets in the estate, not a "legacy transactions." If Reuben hope to achieve a certain property of the Levy - among other things, in succession - and based on his hope that undertakes to sell Simon, the agreement takes, we is not seen orders of Section 8 (a) the law (which sees an agreement concerning a person's inheritance or waiver of the inheritance of his lifetime Hmoris Cancel). In other words: Yes, there are to interpret the section on the reduction in terms of scope but while maintaining strict (I think) on the freedom of choice of all person to leave his assets fruits of his labor on earth to whom he pleases. Therefore, there is no known cables, which ties him (about it) agreement signed.
I agree with the distinguished members, Justice Barak, that the regulations are Sngros contract for all purposes, and Sngros only power is the power of the contract, the result is that application of Section 8 (a) also extends them.
According to this mind-my mind is, installing, which revolved around the debate before us, has become in practice the other shareholders heirs, though - the - the non-heirs "not on - the - law and not on - the - will the law as written" (see quotation above words of Justice H. Cohen AE 682/74 [1]). The fact that it is indirectly or directly transfer the rights of the deceased, is due with the existence of a "ban" in Section 8 (a) of the Law. absentia There is reason to assume them , installation was simply states that with the death of the deceased will stock the other shareholders. goal itself was achieved, at least mostly indirectly, by that regulation. However booty "cancellation" by the late the formal right to object ¬ legislator visited - to make at one time will determine a successor after his own heart and see his eyes. I understand, there is between these and the question of the end - heart and nothing.
View that as a man could tie himself agreement requires pulled his life, so there's no reason not to let him call connection also requires the subject of succession after his death, is, of course, legitimate. However, I have accepted the policy, found expression in Article 8 (a) law, whereby all have to guard the privilege of every person to decide who will be his property as he liked after the end of his life. Moment of weakness and distress, or a passing interest he may sign an agreement, means (direct or indirect) is heir inheritance or transfer of becoming the heir of someone who is not allowed to - by law or a will. Such an agreement should be seen to cancel, and thus prevent the thwarting of the policy intention of the legislature which chose.
The comparison between the results of installation, which revolved around the debate, and the lease agreement, whereby this will end the tenant's death, is not acceptable, in any respect. Lease agreement gives the lessee only
Personal right, which is not inherited successors (as opposed to the provisions of tenant protection laws, explicitly states the rights of the widow, children, etc.). Holding back rent after the previous owner, there is no reason, under will be precisely defined in time. On the contrary, can be (as in the example that was brought about - by members) for life of lessee.