The Procedure to Dismantle an Amuta in Israel

This takes place when a general meeting of an active association decides to dissolve the amuta. In this case, the assembly appoints a liquidator responsible for the dissolution of the amuta. The liquidator is usually an attorney trusted by the General Assembly or management of the amuta. The liquidator disposes of the amuta’s assets, informs the public about the dissolution, and records the dissolution of the amuta with the Registrar of Amutot.

(For more, see detailed and up-to-date instructions on the Registrar’s website).

• The amuta’s affidavit of repayment is signed by a majority of the members of the committee (original signatures + verification of attorney). A letter accompanies the affidavit, detailing the number of members of the committee and declaring that the majority signed the affidavit.
• Minutes of a general meeting regarding the adoption of a resolution of voluntary liquidation and the appointment of a liquidator (this after the affidavit). Note that this must include the signatures of two members of the committee and should be submitted to the Registrar within two weeks. Amuta members should have been notified of these events beforehand.
• The liquidator shall publish a notice to prospective creditors of liquidation in a daily newspaper within two weeks.
• There shall be notice of the dissolution of the amuta in Reshumot (the association registry).
• The liquidator shall apply to the Registrar for approval to transfer the amuta’s assets to another amuta with similar objectives. Note that a copy of the minutes of the General Assembly deciding to voluntarily liquidate the amuta must be attached.
• The liquidator shall prepare a liquidation report, convene a general meeting, and approve the report (including the approval of the Audit Committee). Note that this must include the signatures of two members of the committee. Within two weeks, the liquidator shall submit to the Registrar the report and protocol and a notice of the finalization of the dissolution.
• The liquidator shall also submit financial statements for the last four years, or alternatively, if there was no financial activity, a signed affidavit testifying to this.
• The liquidator will also submit verbal reports of the activity for the last four years (and if there was no activity, submit an online form).
• Proof of payment of the annual fee or an exemption affidavit (signed by two committee members – and verified by a lawyer – with a special postal bank form attached).
• The liquidator shall submit a document for transfer of funds and assets to another amuta (including details of that amuta).

If the Registrar receives the request for voluntary liquidation, he shall submit it to the publication in Reshumot and send an official letter to the amuta that it has been deleted from the Register of Amutot.

(For more, see detailed and up-to-date instructions on the Registrar’s website.)

This occurs when an outside party to the amuta submits a demand for liquidation to the court. Good reasons for disbanding an association by court order may include illegal conduct, harm to the public, or non-payment of debt. If the court is satisfied, it will direct the Registrar of Amutot to submit the order to finalize the liquidation process.

(For more, see detailed and up-to-date instructions on the Registrar’s website.)

This takes place when an amuta has “ceased to operate” (see section 59 of the Amutot Law) for a number of years. An indication of inactivity is the non-payment of a fee, non-submission of a financial report, and/or non-compliance with a court ruling of one kind or another. The closing process is similar to, but simpler and therefore faster than, voluntary liquidation.

An amuta in which one of the following took place shall be deemed an amuta that ceased to function:

1. Has not paid a fee which it is obliged to pay under this law, within ninety days of the last day prescribed for payment thereof.
2. Did not submit to the Registrar the financial report within ninety days of the last day prescribed in section 36.
3. Did not comply with a judgment or decision of a court in respect of this law, within the period prescribed for this, or within ninety days of the date of the decision or judgment, whichever is later.

The deletion process requires sufficient proof that the organization has ceased to operate. Among these it must include:

• Affidavit by most of the members of the committee (original signatures + verification of attorney) that the association has no assets, the association has not been active for four years (financial and/or otherwise) and the association undertakes to be re-established (to return to action) if it turns out that one of these items is incorrect.
• Financial statements (signed by two committee members) or an affidavit by committee members that there has been no financial activity in recent years.
• Minutes of a general meeting confirming the affidavit (original signatures of two members of the committee).
• Proof of payment of the annual fee or an exemption affidavit (signed by two committee members – and verified by a lawyer – with a special postal bank form attached).

If the Registrar approves the above, he will submit it to the publication in Reshumot and send an official letter to the amuta that it has been deleted from the Register of Amutot.

The process of dismantling or deleting an amuta is a complicated and technical process. It is always preferable to carry out this process with the assistance of an expert attorney for corporate and association matters to speed up the process and minimize regrettable errors.

Please contact us Michael Decker & Co. if you are seeking assistance regarding the establishment of an amuta in Israel or legal advice regarding the dissolution and deletion of an amuta.