Control of Corporations Bill, 5786-2025

This bill aims to establish a central registry of controlling shareholders in corporations in Israel. Its purpose is to improve law enforcement capabilities, reduce the misuse of corporations, and assist in the international fight against money laundering and terrorist financing, in accordance with international recommendations from organizations such as the FATF and the OECD. What the law changes and establishes: Establishment of a registry of controlling shareholders: A central registry will be established at the Ministry of Justice, where the details of every controlling shareholder in a corporation will be registered. Appointment of a registrar: A registrar of controlling shareholders will be appointed, who will be an employee of the Corporations Authority and qualified to serve as a judge. The registrar will be responsible for managing the registry and exercising the powers granted by the law. Reporting obligations for corporations: Every corporation will be required to report to the registrar of controlling shareholders the details of its controlling shareholder. The details to be reported include: full name, surname, date of birth, identity number (or passport for foreign residents), address, digital address, rate of holding or control, the circumstances under which they are considered a controlling shareholder, and the date they became one. Reporting obligations for controlling shareholders: The controlling shareholder themselves will be required to provide the corporation with the details required for reporting. Reporting deadlines: An initial report will be submitted by corporations within 14 days of their registration. An annual report will be submitted by corporations by the end of the calendar year. In the event of a change in the details of the controlling shareholder or the corporation, it must be reported to the registrar within 14 days of the change. Exemptions from reporting obligations: The reporting obligation will not apply to certain entities such as banking corporations, stock exchange members, insurance companies, financial companies, and others, as will be specified in regulations. Access to information: Access to information in the registry will be limited to certain public bodies (such as the Tax Authority, the Israel Police, the Prohibition on Money Laundering Authority, law enforcement agencies, etc.) for the purpose of fulfilling their duties. Financial institutions and business service providers will be able to request information for the purpose of fulfilling their obligations under the Prohibition on Money Laundering Law. Supervision and enforcement powers: The Minister of Justice will authorize inspectors from his office to supervise the implementation of the law's provisions. The registrar will be authorized to demand information, examine documents, and impose financial sanctions on corporations that do not comply with reporting obligations. Financial sanctions will be imposed in accordance with the amounts set in the law and can reach significant sums. In certain cases, instead of imposing a financial sanction, an administrative warning may be sent. Confidentiality and penalties: Unlawful disclosure of information from the registry will constitute a criminal offense. Amendments to existing laws: The law includes amendments to the Companies Law, the Administrative Courts Law, and the Prohibition on Money Laundering Law, in order to adapt them to the provisions of the new law. Commencement: The law will enter into force one year from the date of its publication. Existing corporations will be required to report within one year from the date the law enters into force. Who the law applies to: The law applies to every corporation registered in Israel, including companies, non-profit organizations, cooperative societies, partnerships, as well as foreign companies registered in Israel. It applies to the controlling shareholders of these corporations, who are natural persons who hold or control the corporation directly or indirectly.

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