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Blog  / Corporate

Adv. Hadar Israeli
What is the definition of bribery in Israeli law and what are the maximum penalties for it?
Adv. Anat Even-Chen
In an attempt to assist businesses in addressing the privacy challenges they face, we prepared a short guide on the key principles of handling data.
Adv. Hadar Israeli
Hoskins, a British national and former executive of Alstom SA, a French company was convicted by an American federal court of violating the Anti-Corruption and Bribery Law. This is an important red flag for any person or company conducting activity in the United States. 
Adv. Ron Shuhatovich
A private company considering an IPO should know it is a complex and long process, and one that may pose many challenges. Therefore, before deciding to undertake an initial public offering, a deep examination of the process is recommended.
Adv. Alon Anava
Crowdfunding is by now not a new fundraising option for corporations in Israel. These seven points helps explain the ins and outs of the process and the players involved.
Adv. Itay Gura- Lawyer in israel - Barnea
Raising financing is tricky, stressful and for many involves navigating uncharted waters. Click to read for useful information to help you sidestep certain unhealthy choices.
Adv. Michael Barnea
In 2019, Israel remains “the Start-Up Nation” and a leader of technological innovation. Thanks to its strong currency, active economy, and robust export industries, it also continues to attract noteworthy international investments.
Adv. Samuel Henri Samuel
In contrast to Britain and Germany, France does not appear as one of the leading investor countries in the Israeli economy. Adv. Samuel Henry Samuel outlines the situation.
Adv. Zvi Gabbay Lawyer in israel - Barnea Jaffa Lande.
The crowdfunding model enables the general public investment opportunities that were previously reserved only for sophisticated or institutional investors. In this article we examine the Israeli and American models and why the Israeli legislators should find ways to make the crowdfunding channel more attractive, for both investors and companies seeking funding.
Adv. Sagi Gross
When reaching business decisions, nearly every manager must consider issues relating to restrictive trade practices. Click to read basic terms that every business should know about the antitrust law.
Adv. Yuval Lazi
How you negotiate with an angel investor goes a long way in determining whether you will receive funding or not. Click to read some top tips for negotiating with a potential angel investor.
Adv. Dreyfuss Ariella
Sellers in an M&A transaction are required to make certain statements about the company they are selling. If these statements are not true, the buyer can claim against the seller for any damages it incurs as a result of the inaccuracies. W&I insurance can cover the cost (or part of the cost) of the buyer’s damages.
Adv. Daphna Klein
It is not common knowledge that officers of companies who customarily disseminate advertising messages in a manner that constitutes a violation of the Israeli Anti-Spam Law are personally exposed to lawsuits, even to class actions at millions of shekels.
Adv. Anat Even-Chen
Recently, the Ministry of Communications ordered Bezeq to begin implementing a “wholesale market” and selling its competitors access to telephony infrastructure at a regulated price. The objective of this directive is to expand competition in the fixed-line telephone market and to establish a separation between the infrastructure market and the communications services being purchased by consumers.
Adv. Michael Barnea
Despite the many internal and external challenges unique to Israel, the country has successfully transformed itself into a powerhouse of technological innovation. Israel has become an excellent destination for international business, boasting a strong local currency, an active local economy, and robust export industries. 
Adv. Zvi Gabbay Lawyer in israel - Barnea Jaffa Lande.
The race to develop a new, unique and reliable digital currency with low volatility has prompted entrepreneurs to scale the link of blockchain technology and mainstream investments, thus creating a new wave of cryptocurrencies backed by commodities or assets.
Adv. Dotan Baruch
GDPR – Why Should We Care about It?
May 28, 2018 / by Barnea
The EU’s General Data Protection Regulation is designed to help individuals better control their personal data. As this regulation applies also to those that offer products or services in the EU, major websites have begun updating their privacy policies to comply. Doing so is important for a number of reasons.
Adv. Anat Even-Chen
On June 1, 2018, another central part of the regulatory reforms under the Control of Financial Services Law (Regulated Financial Services) will come in effect. This part addresses the activities of financial asset service providers.
Adv. Yuval Lazi
Tread Carefully
May 7, 2018 / by Yuval Lazi
The GDPR craze has left everyone trying to tick off all the boxes in terms of regulatory compliance, while little attention is given to addressing: what happens if you actually get attacked.
Adv. Anat Even-Chen
Fintech and Privacy
March 25, 2018 / by Anat Even-Chen
It goes without saying that technological advancement has come with a slew of risks attached. This is particularly true where financial technology (fintech) is concerned. With large-scale data breaches occurring at regular intervals and with greater frequency, fintech and data privacy are being put to the test.
Adv. Yuval Lazi
If you’ve discovered that your company has been hacked, the first 48 hours are absolutely critical. Knowing how to actively marginalize further harm and eliminate cybersecurity vulnerability can be dealt with in the first 48 hours with an incident response plan.
Adv. Dreyfuss Ariella
Goodnight 2017…
December 31, 2017 / by Ariella Dreyfuss
It has certainly been an interesting 2017 in the Israeli Hi-Tech world, here is a rundown of 5 highlights, in case you missed them.
Adv. Michael Barnea
Fintech combines for the first time the worlds of financial services and technology, as banks and insurance companies serve as fintech’s main playing fields.   As such, both sectors must become more efficient and acquire the technological solutions that will help them fulfill their roles.   Fintech promises to bring innovation to existing players, but also threatens to disrupt conservative industries and replace them with new models and players.   The connection between the two components of fintech has proved challenging, in light of the fundamental differences in the characters of these two components. Technological solutions are provided by startup companies that, by nature, are small organizations driven by the need to work quickly and efficiently, due to the short time-to-market and the requirement to sell and recruit capital. On the other hand, the MVPs in the financial services sector are large, hierarchic organizations characterized by sluggish bureaucracy that negates rapid decision-making and agility in implementing innovative solutions.   Regulation and Fintech Fintech companies operate in a regulation-intensive environment, and this is the first main challenge, because regulations essentially define their ventures and their feasibility. On the other hand, in most of the technological fields that startup companies engage in, the challenges are innovation, competition, and the business model. Regulation is less of a challenge, if one at all.   The dominant role of regulation in the fintech sector is unique. Therefore, gaining in-depth knowledge of the synergies between regulation and fintech is critical during any analysis of a fintech venture’s prospects. And the venture must know how to maintain compliance with the various regulations in order to succeed.   By their very nature, financial services are subject to a wide range of meticulous regulations. The types of regulations that affect fintech include banking regulations, insurance regulations, and the prevention of money laundering, as well as privacy, consumer, and securities regulations. The various regulatory categories in the financial services sector follow and are adapted to the structure of the traditional market, with each sector being closely governed and controlled by its own set of regulations and regulatory authority.   In many instances, fintech strives to resolve the problems created by existing regulations, but it also must keep in mind that its operations are subject to those same regulatory systems. Already at the stage of defining the product and service a fintech venture wishes to launch on the market, it must familiarize itself with the relevant regulations. It then must find solutions that comply with the regulatory conditions, as well as that enable it to obtain approval from the relevant regulatory authority.   There are numerous dimensions to gaining familiarity with the regulations. First of all, similarly to every startup company, fintech ventures are also striving to go multinational and operate in a variety of countries. The problem is that regulations in one country are different and sometimes contradict the regulations in another country. The differences are in language, laws, and even approach. This means that the learning and compliance process is multi-dimensional and, in essence, an unending task.   If this were not enough, another problem is that regulations are drafted based on the structure of the conservative market—banking regulations for banks, insurance regulations for insurance companies, and so forth. On the other hand, in many instances, fintech ventures disrupt the structure of the traditional market. This disruption, by its very nature, creates new connections and approaches. As a result, fintech companies find themselves in a minefield of differing, overlapping, and contradictory regulations.   However, the regulatory challenge is not just difficult, but also a main foundation for creating value.   Any fintech venture that has already become well-versed in the subject, and has adjusted its solution to the various regulations, creates a real advantage over existing and new competitors. The entry barrier to this sector is not only the development stage, but rather the strength of the regulatory solution. In essence, regulatory knowledge actually becomes intellectual property.   For example, the banking sector is characterized as a regulation-intensive sector. The banking supervisor’s regulations relate to various aspects of banking corporations’ operations, including licensing, corporate governance, various regulations relating to capital adequacy and banks’ capacity to assume various risks, consumer regulations relating to banks’ relations with their customers, the prohibition of money laundering, and more. Any fintech venture seeking to interface with the banking system, to provide it services or replace some of the banks’ roles, must be well-versed in the relevant local regulations and ensure its compliance with them.   Clearly, the greater the challenge, the greater the potential.   Privacy and Fintech During the coming year, new and enhanced privacy-protection and information-security regulation systems are expected to come into effect throughout the world.   These are headed by the European GDPR, which deals with privacy protection and will take effect in May 2018. As a result of these processes, the issues of privacy and database protection against cyber risks will have an impact and a presence on the technological agenda in the coming years.   Fintech ventures create solutions that make use of sensitive personal information. As such, the ventures are engaging in fields that are exposed to privacy and database issues. Basically, all financial services involve the collection and saving of sensitive personal information. Electronic mail addresses, phone numbers, personal details, financial information, marital status, special identifying details, workplace, family members, and more are collected as part of the process of getting to know the customer in order to provide him with services, advice, and an identity. All this sensitive information has been collected, saved, stored, processed, and transferred within the companies' technological systems.   But these systems are also exposed to attacks and challenges from all sides. The exposures, in instances of intrusions, are not limited to sanctions that may be imposed on a company by the regulatory authorities, but also include a potential mortal blow to the company’s reputation and civil suits being filed by individuals on the grounds of infringement of privacy.   In light of this, the fintech sector must adopt high standards of privacy protection and security. Fintech companies are required to create privacy-protection and information-security regulations for the enormous volume of information they collect, at standards on par with the customary international practices.   Source: barlaw.co.il
Adv. Dotan Baruch
EU Privacy – Which Jurisdiction Applies?
November 5, 2017 / by Barnea
In an opinion issued to the European Court of Justice, the Advocate General of the Court stated that according to current legislation, any data protection authority in the European Union can take action against a breach of the privacy legislation enforced by that authority, even if the entity alleged to have contravened the legislation is located in another Member State.   The opinion was given in connection with a dispute about Facebook's alleged breach of German privacy legislation. Facebook argued that since its headquarters in Ireland are responsible for its data processing activities in the European Union, Germany's privacy authorities lack jurisdiction over its actions and only the Irish data protection authorities have the power to review its activities.   While the opinions of the General Counsel are not binding on the European Court of Justice, the Court tends to follow them in the majority of cases.   This opinion, if indeed followed by the European Court of Justice, is of significant importance, as it could lead to a barrage of enforcement measures against Facebook and similar structured internet multinationals. However, it should be noted, Europe's new General Data Protection Regulation (GDPR) has instituted the concept of the lead supervisory authority in the jurisdiction of the data controller or data processor's main establishment, in an attempt to limit the need to deal with such a multitude of data protection authorities across the European Union; although it should be noted that the GDPR does not block entirely the other authorities.   Source: barlaw.co.il
Adv. Ron Shuhatovich
“How did the board approve this?” Headlines like this pop up each time it is announced the Israel Securities Authority is investigating a public company’s transactions with its controlling shareholder, such as the latest allegations of deals between Bezeq and its controlling shareholder. But the real question that should be asked is, "Was the board given the right tools to perform its work?"   A Board's Authorities The Companies Law elaborates extensively on the authorities of a board of directors. These authorities may be divided into supervisory authorities and business development authorities.   Supervisory authorities empower the board to oversee the general manager and his actions. Some examples are the examination of the company’s financial position and the preparation of financial statements, the approval of the distribution of dividends, and the approval of transactions with related parties.   Business development authorities are delegated to the board of directors in order for it to forge a strategy for the company and to guide its policies. Such authorities include defining action plans for the company, appointing and dismissing the general manager, formulating a remuneration policy, and issuing bonds and allotting securities.   A Board’s Work In addition to a board of director's authorities, the Companies Law prescribes procedural rules governing the work of a board of directors, which include, inter alia, provisions regarding the chairman of the board, the convening and conducting of board meetings, voting by the board, and the procedure for approving material transactions.   As stated, the Companies Law provides the board with technical operating rules, but it does not provide the board with high-quality, fundamental rules to guide it in the exercise of its power. This omission becomes even more glaring when at issue are complex matters, such as controlling shareholder transactions and the distribution of dividends.   Over the years, this void has been filled by court rulings and guidelines, as well as via position statements issued by the Israel Securities Authority. Both constitute normative sources of guidance to boards of directors on fundamental issues pertaining to how the board’s work should be performed. While the instructions from the courts and the ISA are many and diverse, one material rule, which recently received official recognition by the Supreme Court, and which encompasses a number of material rules for exercising authority, overshadows the rest—the Business Judgment Rule.   The Business Judgment Rule The Business Judgment Rule prescribes when the court is not to intervene in business decisions made by a board of directors. Namely, the court is not to intervene in board resolutions passed with bona fides, without any conflicts of interest, and in an informed way. According to the principles of this rule, when the board exercises its powers, it must examine and consider, inter alia, these issues: Ÿ Conflicts of interest – Does the approval of a particular transaction affect, or is highly likely to affect, the board or any of its members? The board must ascertain whether the transaction promotes solely the company’s best interests or if it benefits other interested parties in the company. Ÿ In-depth deliberation – The board must hold a fundamental and practical deliberation of the proposed resolution on the agenda. It must perform a thorough examination of the transaction, ask questions, act as devil’s advocate, propose revisions to the terms of the transaction or a competitive proceeding, and examine other alternatives. Ÿ Sufficient background material – In order to hold an in-depth deliberation, the board must make sure it has been provided with the full factual foundation as well as with all the relevant background documents and data it needs, such as valuations and economic forecasts. Ÿ Documentation – Minutes of board meetings must be recorded. The objective of the minutes is not to constitute a full transcript of what was said during the board meeting, but rather to document the key statements made and to show readers that an in-depth deliberation indeed took place.   In summary, the work of a board of directors entails risks. The Companies Law prescribes procedural rules for the work of a board of directors, but only by integrating the material rules prescribed outside the Companies Law does the board possess the complete set of rules it needs to cope with the risks posed by its work.   Source: barlaw.co.il
Adv. Noa Havdala
Insolvency proceedings are an integral part of business-commercial activities, in circumstances whereby a person or corporation might need to institute proceedings to rehabilitate its business activities or even to liquidate the company.   Insolvency reflects a factual situation in which a debtor (person or corporation) encounters economic and cash flow difficulties to the extent that the debtor is incapable of paying its debts to creditors on time.   Insolvency proceedings seek to implement a fair and proper distribution of the remaining resources of the debtor (person or corporation) among the various creditors; during insolvency proceedings, the court considers the creditors’ different interests, including maximizing the disposition of the debtor’s resources; ensuring proper employment of the business’  employees; minimizing the burden on the public taxpayers; taking care of the business’  customers; taking care of suppliers that are dependent upon the business (particularly in the instance of rehabilitation and recovery); and providing assistance to shareholders in small and medium-sized businesses.   During insolvency proceedings, a differentiation is made between debtors who are private individuals and debtors that are corporations (including companies). When at issue is a private individual, the court considers critical issues, such as whether lawsuits have been filed against the debtor (including execution proceedings) and whether additional debts exist beyond the debts that are the subject of the legal proceedings.   Thus for example: in the instance whereby a number of execution proceedings have been filed against a debtor, the debtor may arrive at an arrangement whereby the cases are consolidated and his debt repayments are scheduled in installments but, naturally, the debt scheduling does not take into account any debts not covered by the execution proceedings.   Therefore, when at issue is a debtor who is a private individual desiring to arrange all of his debts, he must conduct negotiations with his creditors and, subsequently, he must file a motion with the court petitioning for approval of a compromise or settlement proposal with his creditors according to the provisions prescribed in the Bankruptcy Ordinance [New Version], 5740 – 1980.   When at issue is a company that is facing insolvency due to economic and cash flow difficulties, it has two options: Stay of proceedings pending the filing disposition of a motion and rehabilitation proceedings A company that faces insolvency may petition the court to enable it to institute rehabilitation and recovery proceedings by way of preparing a recovery plan and debt rescheduling (in the manner prescribed in section 350 of the Companies Law, 5759 – 1999).   A motion for business rehabilitation also depends upon a motion for a stay of proceedings, the purpose of which is to prevent creditors from filing lawsuits against the company and to freeze any legal proceeding filed against the company until the motion filing date, which gives the company time to implement its rehabilitation plan. The court will issue a stay of proceedings order only if it is convinced that there is a reasonable chance that implementing the rehabilitation plan will lead to the financial recovery of the company; a stay of proceedings order is usually limited to a timeframe ranging between a few weeks and nine months.   The court also has the power to appoint a trustee or special administrator to oversee the implementation of the company’s recovery plan during the period of the stay of proceedings. The trustee’s powers are defined by the court, depending upon the circumstances that led to the company’s insolvency .Such powers often include management of the company during the period of the stay of proceedings, the waiving of onerous contracts, if necessary, and the conducting of an investigation of the circumstances that led to the company’s insolvency.   Liquidation of the company There are instances whereby a company is facing insolvency, but any rehabilitation or recovery plan would be fruitless, or, alternatively, if there is no longer any economic justification for continuing its operation.   In instances whereby at issue is an insolvent company for which there is no justification or plausible way to lead to its recovery, interested parties, including creditors and shareholders, may file motions for liquidation proceedings against the company.   A liquidation proceeding is a legal proceeding that basically dissolves the existence of the legal entity of the company, first, by emptying the company of all of its economic content, and later, dissolving its existence as a legal entity.   The Companies Law recognizes three types of liquidation proceedings: voluntary liquidation, voluntary liquidation under court supervision and compulsory liquidation by the court.   Any funds obtained as a result of the disposal of the company’s assets will first be used to repay the company’s debts to its creditors according to the disposition rules prescribed by law (e.g the rights of secured creditors), and according to lawsuits filed by creditors. Insofar as any money remains after all creditors have been repaid, the surplus is distributed among the shareholders and equity investors of the company.   Source: barlaw.co.il
Adv. Michael Barnea
Distributors, agents, resellers and OEM partners all share the same commercial function of selling goods to end users. Thus, although there are significant differences between the legal statuses of each of these players, this article below treats all of them collectively as "distributors".   Appointing a distributor involves significant inherent risks. The drafting of the distribution agreement may help in mitigating these risks and realizing the potential benefit of your relationship.   While formulating distribution agreements you should pay special attention to the following key issues:   Choose an Effective Distributor:Choosing the right entity as the distributor of your products or services is the most important point. You may appoint a distributor you happened to come across, or that appears impressive. However, you have to remember that you made the appointment so that your products will be distributed and sold. The concern is that the distributor will not act upon the appointment, and the agreement that you signed will remain “on the shelf". These situations get complicated when the distributor is granted with long term exclusivity over a territory. In such event, the concern is not only that the distributor will do nothing, but that you will not be able to appoint other, better, distributor for the same territory.   Specify the Distributed Products: a distributor may be excellent for the distribution a certain product, but unsuitable to distribute other products. Therefore, it is advisable that you define the subject matter of the agreement carefully and provide an explicit reference to issues such as upgraded or updated products. For example, when you designate certain software as the products to be sold under the agreement, one could consider newer versions of the software as being covered by the exclusive rights of the distributor and another may consider them as being beyond the scope of the exclusivity (and there is no doubt as to who is the one and who is the other).   Consider the Territorial Coverage: the territorial scope of your distribution agreement is not just a question of geography. For example, if exclusive rights are given for distribution of a certain product in the East Coast of the USA, it should be made clear that such rights are not infringed if the same product may enter the territory through an OEM partner, embedded in another product. You should specify precisely all the possible channels through which the product may penetrate the market and thus protect yourself from future disputes with your distributor.   Include the Distributor’s Commitments: suppose that you and your distributor have set sales targets or even established minimum purchase quantities, failing which you are entitled to terminate the exclusivity or the entire agreement. In the real world, you do not get to impose these sanctions so quickly. They are often subject to long grace periods, to further conditions or to both, so that basically, they give you no real guarantee. With that being said, it is very important that you perform a due diligence on your distributor and receive a detailed business plan. Such business plan should include, at least, commitments regarding marketing expenditure and details of the human resources to be assigned to the distribution. If you add to this a proper incentive for meeting sales targets, you will acquire some confidence that you have a suitable, capable and motivated distributor in place.   Beware of Exclusivity: exclusivity can be unilateral, that is, the distributor is your sole distribution channel in the market, but he may sell competing products. Similarly, you may supply your product to others, but the distributor may not sell competitors’ products. In reality, these one-sided arrangements usually do not work so that it is more advisable to conclude bilateral arrangements. In this regard, it is important to note that in many countries, exclusivity arrangements are considered anti-competitive and thus, in some cases, unlawful. Thus, it is highly advisable that you consult with an anti-trust specialist lawyer to make sure that the arrangement that you are about to enter into is not illegal.   Set the Term of the Agreement: flexibility regarding termination of the distribution agreement is crucial. Take for example a case where your company is facing an acquisition and the acquirer conditions the purchase on the termination of the distribution agreement. In such event your exit is dependent on your distributor's consent to release you from the agreement. This issue also arises where "change-of-control" provisions are included, whereby your distributor may terminate the agreement upon a change of control in your entity. Thus, if your buyer's proposal depends on the continuation of your relationship with the distributor, you are at his mercy. Therefore, set definitive and short initial periods that can be extended repeatedly by mutual consent. In this way, you may not be free to end the relationship whenever you want to, but you will always be able to do so within a specified period of time.   Deal with the Post-Termination Period: questions of no less importance can arise in relation to the post-termination period. Among the things you must consider are return or buy-back of remaining products, non-competition and confidentiality undertakings, commissions for transactions that are close to being concluded, continued support for the supplied products and more.   Opt for Home-court Governing Law: in some cases, well defined “choice of law” provisions may impact upon the probability of disputes between the parties leading to actual litigation. In many cases, when you have a local jurisdiction clause in your agreement with a foreign distributor, your distributor will be hesitant to initiate proceedings against you. Another way to avoid proceedings is to set an expensive arbitration arrangement as the sole and exclusive procedure for settlement of disputes. In this way, the party with the greater economic strength sometimes assures for himself a sound and peaceful relationship.   Remember your Intellectual Property: when you appoint a distributor, you also grant a license to use your intellectual property for purposes of the distribution. You are basically giving him access to your most sensitive assets. He is authorized to use your domain name, your logo and your trademarks. If these issues are not specifically addressed in the agreement, this may lead to situations where your distributor takes possession of your intellectual property and actually blocks you from the territory.   Limit Liability: in most jurisdictions, the liability for damages caused by the use of the products lies with the manufacturer. Some agreements attempt to shift this liability to the distributor, but when tested by the courts they will probably not hold. Therefore, the correct way to address the risk of liability is to formulate an effective indemnification mechanism that will limit the scope of your liability. Such mechanism should limit your liability both in terms of amount and time and be backed up by adequate insurance coverage.   Originally published on the "ChannelSmart website”
Adv. Ilan Blumenfeld
A restrictive arrangement organized between an Israeli corporation and a foreign corporation, which results in significant harm to the competition in the Israeli market, is subject to the Israeli Restrictive Trade Practices Law.
Adv. Ilan Blumenfeld
We have encountered numerous instances recently whereby investors were about to make an investment without performing a prior legal due diligence examination. There are various reasons put forward by investors for not performing a due diligence examination, such as: the contemplated investment is in a young company, insufficient budget, cost-benefit considerations, the volume of the investment, timetables, long-standing work relations between the investors and the corporation, and the like. As a rule, whenever we encountered a decision to not perform a legal due diligence before investing, the decision turned out to be wrong.   Undeniably, every investment involves some risk, but the degree of risk may be mitigated by performing a comprehensive examination of the business being acquired.   A legal due diligence process allows the investors to learn about the corporation in various aspects, including: the identities of the corporation’s shareholders; its relations with the banking system; the approvals required from third parties; the corporation’s pledged assets; the corporation’s licenses and the potential impact of the transaction on their validity; its workforce and their employment terms, including exposures relating to the company’s obligations to its employees, both by law and by virtue of the employment agreements with such employees; the corporation’s tax exposures; the structure of the agreements with the corporation’s suppliers, including the degree of risk involved in working with a few material suppliers; the corporation’s customer base and the terms of engagement with them; the corporation’s exposure to past lawsuits; necessary actions in order to protect the corporation’s intellectual property rights, including the registration of patents, trademarks and copyrights; and the like.   The outcome of the due diligence examination should have a major impact on the nature of the contemplated transaction, inter alia: on the structure of the transaction (share purchase transaction or asset purchase transaction); on the transaction price; on the representations that will be required of the business being acquired and its owners, on the collateral to be provided to guarantee the investment; on the suspensive conditions to consummation of the transaction; indemnity clauses; the mechanism of the investment and, in the final analysis, on the very decision about whether or not to proceed with the transaction, considering the results of the due diligence examinations.   In this context, we further advise that in 2014 the Israel Antitrust Authority ("IAA") published a public statement addressing information disclosures between competitors during the performance of due diligence examinations prior to executing a transaction. According to the IAA statement, the importance of a due diligence examination to the efficient operation of a business on the one hand, and the concern about competition being compromised as a result of a due diligence being performed between competitors, on the other hand, obliges competitors that are conducting due diligence examinations of each other, to carefully and meticulously consider their actions. The main discussion in the IAA’s foregoing statement targets the tension between the prohibition of becoming a party to an unlawful restrictive arrangement, and the need for an adequate factual foundation of knowledge for the purpose of forging a transaction between the competitors.   Barnea has extensive experience performing due diligence examinations, including antitrust aspects. The performance of a legal due diligence examination is a critical component of the investment strategy and plays a decisive role in optimizing your bargaining power during negotiations.   Source: barlaw.co.il
Adv. Jaffa Simon
Companies, countries, and individuals who are interested in doing business abroad are looking more and more towards Israel. This has not occurred by accident. Israel has devised and implemented national policies to make it a world leader in technology and innovation. The result is a nation friendly to business investment. With the right business and legal guidance, investors are discovering tremendous potential in this small but sophisticated country.   Israel's Economic Performance In the last 10 years, Israel's economy has grown 100 percent - more than that of the United States or any other developed nation. This includes a remarkable 13 consecutive years of growth. Further, the International Monetary Fund predicts the country will grow another 3 percent on 2017. This does not mean that the economy in Israel cannot contract, but over time conditions have pointed consistently upward for economic development.   Human Capital Similarly, Israel has fostered a workforce highly trained in technology. Compulsory service in the Israel Defense Force steers the brightest young scientific minds into tech training. The top intelligence units in the IDF are known as the best school for entrepreneurship, naturally driving the graduates to leverage their experience and establish successful startup and high-tech companies, upon finishing their military service.   An Ecosystem of Innovation Despite its size, Israel ranks high on the list of the best countries for doing business. This ranking emerges particularly as a result of Israel's focus on innovation and start-up business growth. The infusion of venture capital funding has further built up its capabilities, with foreign investments rising about 30 percent per year. The result is a nation honed to push ahead of the pace the rest of the world sets for scientific development.   Israel's Regulatory Environment Before you can do business in Israel, you need to take the time to understand the local culture and business environment. Recent changes have made Israel more complicated in areas like taxation and obtaining permits. In many ways, this is a natural by-product of its success; as national economies grow, it is necessary for regulation to become more sophisticated. Israel is experiencing and navigating growing pains, and while its government adapts, its regulatory environment for business will involve some flux.   Barnea has the experience and expertise to guide you through the potential pitfalls to realize the potential Israel offers. Contact us today to learn how we can help you.   Source: barlaw.co.il
On March 17th Adv. Micky Barnea delivered a lecture for start-ups and entrepreneurs at the Azrieli College of Engineering, Jerusalem. The event was sponsored by Atobe Accelerator. The lecture dealt with the use of options as a tool to encourage employees and service providers of start-ups. Various issues were discussed, including the differences between shares and options and the differences in the expectations and perspectives of entrepreneurs, investors and employees of a start-up venture. During the lecture Micky explained the basic terms of options (vesting dates, exercise price etc.) and the benefits to the company of adopting a stock option plan. https://www.youtube.com/watch?v=c6vSY5NluhE&feature=youtu.be  
"Funding your organization" - a lecture in Hebrew by Micky Barnea given to the program of the Executive U.S. Embassy Alumni. The lecture took place at the Tel Aviv-Yafo Municipality's Center for Young Adults, with the participation of William Grant, Deputy chief of Mission at the US Embassy.     https://youtu.be/xosL4R7umnA
A founders’ agreement is the first encounter between entrepreneurs who are embarking on a joint venture to establish a successful start-up company. A founders’ agreement reflects the relationship between the entrepreneurs inter se and between each of them and the joint venture.   The importance of this agreement should not be underestimated. This comprehensive agreement, which is tailored to the nature, needs and aspirations of each of the entrepreneurs, and particularly those of the new venture, provides a strong foundation for a healthy and successful company.   Frequently, the drafting of a founders’ agreement requires the parties to address topics that many founders fail to address, either due to a lack of experience, a desire to avoid friction, or simply because they are looking at the venture through rose-colored glasses. Meticulous, professional handling of these issues will provide creative solutions which, with the mutual agreement and commitment of the parties, will help navigate the venture along the optimal route to success.   Barnea provides, inter alia, valuable assistance to entrepreneurs and start-up ventures and works with them to draft a founders’ agreement that prepares fertile ground from which the venture can grow and prosper.   Micky Barnea is an expert in advising start-up entrepreneurs – watch Micky lecturing on the important issue of Founders’ Agreements:  
Adv. Marie Tsion
Employee rights in Israel are regulated by a long list of laws, extension orders and collective bargaining agreements. The perception of labor law is that it is primarily protective of employees vis-à-vis employers, and indeed, a basic rule of law states that employee contracts cannot derogate from rights prescribed in laws, extension orders and collective bargaining agreements, but may only supplement them. In light of this stance and this rule of law, the importance of employee contracts has steadily diminished over the years and today, the sentiment among many employers is that an employee contract is not really meaningful and is merely a declarative document that employers should retain for the sake of good order. Many employers do not make employees customarily sign employment contracts at all, while others make use of an old outdated version of a contract. In fact, contrary to this attitude, an employment contract is exceedingly meaningful and important, if it is drawn up correctly.   Employment contracts help employers comply with their statutory obligations The Notices to Employees and to Candidates for Employment Law (Employment Terms and Screening and Hiring Procedures) was enacted in 2002, which obliges every employer to issue written notice to every employee, specifying his or her principal  employment terms, but does not require the employee to sign the notice, nor does it require the inclusion of the employee’s obligations. The law defines a list of compulsory details for inclusion in the notice or, alternatively, in the employment contract that constitutes a substitute for this notice. If an employer fails to issue a notice or issues a notice that fails to comply with the law, this constitutes a violation of the law, for which the employer can expect fines and the employee can also sue for compensation as a result. In this instance, a correctly drafted employment contract can help employers comply with their statutory obligations, by including in the contract all of the details required by law, as well as the employee’s warrants and covenants that are not included in the statutory notice. There are additional contract clauses that an employer can include in the contract in order to minimize its exposure, such as overtime clauses or clauses addressing deductions of an employee’s wage due to various debts (such as if an employee’s use of  gasoline, telephone, etc., exceeds the defined limit). Employment contracts can be helpful in overcoming statutory restrictions. For example: employers are prohibited from requesting medical information from employees, due to the privacy protection law; however, a clause may be incorporated in the employment contracts in which the employees must warrant that there is no medical reason why they cannot perform their jobs according to the job description. Another example: employers are prohibited from demanding a ‘police certificate of no criminal record’; however, employment contracts enable employers to obtain warrants from their employees that they have not been convicted of particular offenses that relate to the positions for which they are candidates. Another example is the non-competition clause that many employers want to include in employment contracts. It is important to note that, even though the labor courts will not always enforce such a stipulation, if such a stipulation is not included in the employment contract, then the employer cannot file a motion to the labor court that relates to non-competition on the part of an employee. Another topic associated with competition is the issue of intellectual property, a topic that must be regulated in employment contracts, in clauses that define the proprietary rights to the intellectual property, that assure employees’ future cooperation and that regulate the matter of the consideration in respect of the intellectual property, etc.   Employment contracts expressly regulate contractual rights Apart from the fact that employee contracts help employers comply with the statutory requirements, there are many employment rights that are purely contractual rights and are not anchored in laws, and therefore, the employment contract is the only possible instrument for regulating them. Therefore, the more explicit and detailed the employment contract is, the fewer are the uncertainties and the chances that disputes will arise over interpretation of these rights by the labor court. Examples of contractual rights not prescribed by law are bonuses, sales commissions, options, company car, telephone, etc. Commissions and bonuses are good examples of rights that labor courts are often petitioned to interpret as a result of the ambiguity of the arrangement or because they were not adequately defined in a contract. Consequently, it is important to regulate these rights clearly and unequivocally in an employment contract, including the eligibility criteria, the calculation methodology, the examination date, the payment date, etc. In Gimelstein vs. Yazamco Ltd., the national labor court (appellate level) was petitioned to deliberate a sales representative’s various bonuses (target-based bonuses and a profitability-based bonus), who also received sales commissions within the scope of his employment contract, and to rule whether or not they constituted a component of his wage.   Employment contracts help to assimilate procedures and policies Employment contracts are also ideal tools for employers to define and assimilate procedures and policies on various issues, such as safety, the prevention of sexual harassment, attendance reports, protection of privacy, etc. Employment contracts constitute a convenient instrument for informing employees of the various work procedures without having to produce a thick procedure manual. This will not only add clarity to the work relations, but may also help employers to defend themselves during various legal proceedings, when the employer must prove that it took appropriate action to assimilate policies and took appropriate preventative measures. A prime example of this may be found in the ruling of the national labor court on the matter of an employer’s right to read its employees’ e-mail correspondence: in the Tali Iskof case, the national labor court ruled that in order for an employer to not be deemed as having infringed on its employees’ privacy, the employer must show that it had set a clear policy about the use of e-mails and had informed its employees about this policy.   Employment contracts help to reduce employment costs Beyond the importance of an employment contract in terms of managing risks or minimizing legal exposures, it also constitutes an instrument for defining various arrangements that help regulate the cost of a position and reduce employment costs. Some arrangements can reduce the employment cost, provided that they have been expressly and accurately defined in the employment contract drafted by a professional. For example, the arrangement pursuant to Section 14 of the Severance Pay Law, whereby an employer will be exempt from paying supplementary severance pay in the event of a dismissal, will only be valid if it has been correctly worded and incorporated in the employment contract. A bonus will not be considered a wage component only if the bonus plan has been correctly structured, is defined as meritorious and as not constituting a guaranteed wage component. On the other hand, there are components that may be included in the wage, if they have been expressly defined as such in the employment contract, as was the ruling in the Orient Color Photography Industries (1986) Ltd. case on the matter of convalescence pay, travel expenses and holiday pay. In summation, employers benefit from recognizing the importance of employment contracts and their contribution to both the legal aspects of employment relations, and to their labor relations in general, since they provide both parties with certainty and clarity. Employment contracts help employers to assimilate policies and procedures, to enhance their image and reputation, to reduce employment costs without adversely affecting motivation, and also help employers to minimize exposures to civil suits lodged by their employees, as well as exposures to enforcement proceedings by the Ministry of Labor relating to criminal and administrative matters, including in relation to the liability of managers who might be found personally liable for offenses committed by the employer's corporation.
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