Take a seat


Typical legal form for start-ups

Limited Liability Company (Ltd.)

Brief information

Start-ups usually choose the legal form of the israeli ltd. It is the only legal form that enables limited shareholder liability as a private company.

A PE/VC Fund may, under certain conditions, supervise its investment through an observer seat in the board of directors.

The bodies of Corporation are the shareholders' meeting, the Board of Directors and the Officers/General Manager. The shareholders' meeting elects the Board of Directors and approves extraordinary company actions. The Board of Directors is responsible and approves the material company actions (strategy, employee participation, budget, etc.). The Officers/General Manager carry out the day-to-day management but the Board of Directors has the authority to issue directives and may carry out an order in their place if required.
There is no separate supervisory body. However, investors can be granted an observer seat status by contract. The observer may attend meetings of the Board of Directors but has no voting rights.

A PE/VC Fund may in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions.
PE/VC Funds may not participate in the Board of Directors.

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: Pearl Cohen