Of the great importance of counseling internet companies in Israel

An internet lawyer experienced in counseling companies that operate mainly online plays a crucial role in their success in negotiations with strategic partners in Israel and abroad.

Within their business activity, online companies routinely have to sign many commercial agreements with their vendors, large clients and strategic partners.

Foreign companies are natural strategic partners for Israeli internet companies in need of current legal counseling, since companies with parallel or interfacing business activities could assist their success abroad.

Almost every online and high-tech company shoots for the large global market and does not settle for the Israeli market, which is limited by its size.
Therefore, the quality of the company’s strategic management is of great importance in its business dealings with parallel companies in its target countries so that it could expand its business activity.

Trade relationships with foreign internet companies are impossible without a series of commercial agreements regulating the parties’ collaboration, rights, obligations and legal liability.

A commercial agreement for an internet company is multifaceted, and amongst its main facets are preserving the company’s intellectual property even when a third party is awarded licenses or usage rights, rules governing monetary transfers, exclusive jurisdiction provisions, legal liability limitation, determining necessary achievements by milestones and much, much more.

The social media’s overwhelming success over the past decade gave rise to a wide range of online companies that base their activity on social media platforms.
Only a high-quality, professional legal counsel relying on a proven experience in counseling internet companies could assist those companies in safeguarding their interests when faced with the social media’s dynamic terms of use that are constantly updated according to regulation and events in the real world.

Current legal counseling is crucial for internet companies, even in the day-to-day management sense.

These internet companies operate in a variety of commerce and service fields, such as advertizing, segmentation, branding, client relations, complementary apps and so forth.
What all these companies have in common is their need to enrich their current managerial decision-making process with professional legal counseling that exposes the potential implications of every twist in the business tale.

Adv. Dror Harel counsels a successful, leading internet company that collaborates with many foreign companies worldwide.
Thanks to methodical, professional work by the company’s management alongside the legal counseling, assistance in negotiations and handling contracts the company draws in English vis-à-vis its business partners, the company managed to claim a stake in its relevant markets and create a sound, solid business activity that yields continuous handsome profits.

The company specializes in creating exclusive, authentic and viral contents that yield millions of views on social media and thus exposes the clients’ brands and business activity.
The company also manages digital assets worth millions of Dollars and uses them as an advertizing platform for brands and businesses.

Handling professional negotiations with business partners and insisting on fundamental contractual clauses that award the company necessary rights for its business stability in Israel are what drives the stakeholders to keep acting as promised with full steam and professionalism.

Do not hesitate to contact us to learn what adv. Dror Harel and his team could do for you internet or high-tech company in Israel.

Israeli startup lawyer Dror Harel

Adv. Dror Harel specializes in providing unique legal services to startup companies that need to be understood and awarded a special comprehensive service to support their business growth.

Our firm counsels startups throughout their interactions with their stakeholders, including vendors such as marketing and content companies, service providers of any realm, strategic clients, investors, employees, shareholder agreements, private issuances and so forth.

When any business engagement by the startup is taken seriously, it is made through a written agreement that uncompromisingly expresses any interests.
That is the only way the startup could grow into a strong, solid company and the contractual infrastructure in which it invested would create a business certainty crucial for the company’s strength and that of its investors.

Investors, financing banks, vendors and clients always keep a watchful eye on budding startups.
Therefore, you have to know how to work with these entities with respect and understanding and interact with them on the right level to convey earnestness, responsibility and assertiveness.

Stakeholders look for entrepreneurs that are visionary and creative but also modest, grounded and surrounded by leading, trust worthy associates and professionals.

Legal counsel for startups in Israel

When a lawyer counsels a startup, they have to be 100% committed and utilize their entire experience.
A commercial lawyer’s recommendations are invaluable, since they are crucial to the company’s future.
Legal negotiations over a collaboration agreement with another company could provide the company with the runway to success, while compromising when it comes to important clauses could be devastating and jeopardize the company.

A lawyer counseling a startup has to care for each and every detail, large or small.

The Dror Harel Law Firm provides startups with an exceptional service.
That means that adv. Dror Harel is always there for you, to envelope your need for a 360 degrees service.
In brainstorming towards important decisions, counseling on how to do things, negotiating with clients over the phone, through Zoom or during meetings, drafting Hebrew and English contracts and designing and planning the strategy and business model.

You cannot go half way in counseling startups.
The job should be viewed like a construction job.
If we stack the bricks the wrong way, the building will be crooked and it will not be able to soar.

An Israeli startup lawyer to counsel the company

Our firm never settles for “sort of” or “maybe”.
We do whatever it takes and give our heart and soul so that entrepreneurs are legally covered and the work is done to the highest standards with no compromise or waiver.

Many entrepreneurs that own internet and industrial startups seek adv. Dror Harel’s help and involvement in their work, to lead them to safety.

His business understanding and experience in counseling companies enable adv. Dror to suggest excellent ideas to his clients and lead them with a sense of being part of the achievements.

Every startup experiences ups and downs and everyone goes through a learning curve.
Running a startup company is always emotional and you cannot distance yourself from the situation emotionally.
Such a company’s lawyer should also know how to tackle a potential crisis and be available to help at any time and under any circumstances.

Legal counsel for startup companies in Israel

Only a lawyer that understands businesses and has a personal experience in entrepreneurship, complex business, contracts and corporate law could counsel business clients.
A business client wants to see that their lawyer understands the challenges they face and provides them with real solutions that help them progress, succeed and prosper.

A business client funding legal expenses also wants to reap the benefits in the short term through achievements in negotiations with the other party, protecting the company, improving the contracts, strategic counseling before important business decisions, building intellectual property, non-compete, confidentiality, etc.

As a lawyer representing business clients, adv. Dror is forthright and speaks his mind in any transaction and move.
If it’s doable, albeit complex and challenging, we push on and run the distance, but when risks overshadow the business feasibility the client needs to hear that and reexamine their moves and alternatives.

Analyzing opportunities is an important aspect in providing legal counseling to startup companies.
Often, a client could tell the lawyer of a great opportunity they want to exploit and the counseling lawyer has to examine it and recommend the way to do it.
Clients love to be assured by a lawyer that the move is legally sound and the risks calculated.

In reality, many lawyers refuse to recommend opportunities involving any risk, since risk aversion is part of the legal profession’s DNA.

That is not the case with businesses; on the contrary.
Therefore, lawyers counseling startups have to both recognize the right legal way to make the business move and instill in their client the confidence to dare.

Entrepreneurs pay business lawyers not to nip their ideas in the bud, but to pave the safest way to realize their dreams.

Some transactions involve hardships alongside amazing odds, and it takes a lot of experience and courage to execute them and recommend pushing forward and not giving up.
Obviously, if anyone could see and do it, it wouldn’t have been relevant anymore.
Not anyone could and would take the risk to reap exceptional rewards, and for that you need strategic associates you can trust with anything.
Do not hesitate to call our firm and learn what we could do for your startup in Israel.

An example to an estate distribution according to the Inheritance Law

A certain person with two sons and one daughter dies at old age. (Supposing his wife predeceased him and he remained in possession of their entire common property.)
His property includes his home, a lot he purchased as an investment in another town, a savings plan amounting to 250,000 Shekels and a current account amounting to several thousand Shekels.

According to the Inheritance Law, his legal heirs are his three children, in equal shares.
Meaning that each child is entitled to exactly one third (33.33%) of the inherited estate’s value.

Handing and resolving inheritance disputes through an Israeli inheritance lawyer

Sometimes, when a person dies, one of their heirs files a probate motion and disputes arise between the heirs due to the non-equal distribution of the estate, or heirs that already received considerable funds from the parent in their lifetime, or for other reasons.

Heirs that feel deprived are authorized to file an objection to the probate and raise arguments in support of their objection; they are also required to file an affidavit confirmed by an attorney.

Heirs by virtue of a will in Israel

When a person makes sure to draw a will providing their heirs’ identity and the share (percentage) each heir would receive, the will’s instructions apply and prevail over the Inheritance Law.

In a Will, the deceased is referred to as a “testator” and the heirs are referred to as “beneficiaries”.

Writing a will in Israel

To express our precise wishes on how our property is to be distributed and not leave the property’s distribution and heirs’ identity to default and legal instructions, it is recommended that we draw a will.
Over the years, our firm in Israel has dealt with drafting many wills and we possess a vast experience in this field and an ability to assist each person with their unique characteristics and their property’s characteristics, in order to word and draw a will that would express their wishes.

A valid will requires two (2) attesting witnesses.
Upon signing the will at our offices in Israel, the lawyer serves as the first witness and the testator could provide the other witness.
Failing that, our firm will provide them with the other witness.

In certain cases, clients ask our firm to sign the will at their homes in Israel, for convenience sake or for medical reasons. Our firm always obliges that request and the attorney drawing the will comes to the client’s home and orchestrates the signatures during that meeting.

Rules, pros and examples of writing a will in Israel

In order for a will to be valid and its instructions upheld so that it won’t be easily contested in court, it is crucial to obtain legal assistance from a lawyer specializing in drawing wills in Israel.

The will should be worded so as to include bequests, many fundamental details describing the testator, their property and the manner of distribution to the beneficiaries, and the witnesses’ competency is crucial too.

Upon receiving legal counseling by a lawyer in drawing a will, you realize there are many ways to express your wishes in various situations that could occur following your demise.

For example: a will providing for “an heir for an heir” – in case the first heir we chose has already died when the will gained force.

A will providing for “a succeeding heir” – when the testators are spouses leaving the property to each other but ordering that following the surviving spouse’s demise the property will be distributed to their children.

A will providing for “a contingency” – an heir will obtain a certain asset subject to meeting a certain condition we determined. Also, there are wills with a terminating condition and many other options.

Unlike an inheritance according to the law, where a person’s estate is distributed according to the Israeli Inheritance Law (usually in equal shares between the legal heirs), a person writing a will could leave shares of their property to any person, including non-relatives (a friend, neighbor, nephew\niece).

In addition, we could determine that the property will be distributed between the heirs in different shares and percentages.
For example: a person who during their lifetime gave their eldest son considerable funds, determined in their will that that son will only receive 10% of their estate whilst the remaining three children will receive much larger shares equally, meaning 30% per heir.

Alternatively, we can designate specific assets to certain heirs.
For example: use the will to order that a vehicle will be gifted to one heir, a home to another heir, jewelry and savings to yet another heir, an active business to yet another heir and so forth.

In some cases, the will should include instructions concerning the appointment of an executor.
The executor could be one of the heirs according to the will, someone from outside or a lawyer.
A lawyer counseling a person that decides to draw a will recommends that they appoint an executor when there is considerable or complex property to be distributed between the heirs, or when there will probably be disputes and battles between the heirs over the will’s instructions.
Other special circumstances that warrant an executor are when the heirs include a dependent or incompetent person, or a minor.

Establishing a company in Israel in a nutshell
Establishing a company in Israel through a business lawyer

I have been a member of the Israeli Bar specializing in commercial and business law for more than a decade.
As a business lawyer in Israel, I assist entrepreneurs by handling anything the business activity requires, such as: establishing new companies, drawing founders’ agreements, drafting commercial agreements between the company and vendors and clients, general legal counsel, and much more.

Alongside a vast legal experience in establishing companies in Israel, I also hold an Executive MBA from the Hebrew University of Jerusalem and serve as the legal counsel for many companies.

Establishing a company in Israel through a business lawyer could greatly contribute to shaping the legal structure suitable for your company, while applying a broad business understanding of your business activity and receiving appropriate advice.

Establishing a company in Israel – considerations and merits

Establishing a company in Israel is the best option for any entrepreneur wishing to manage a business while controlling the risks and legal exposure resulting from their business activity.
Also, legitimate, legal tax plans are the realm of CPAs handling LLCs.

Whether the envisioned business activity is operating a restaurant, food packing plant or apparel store, in each case establishing a company is the legal solution that provides the founders with maximal protections and minimal risks.

Managing businesses through companies enables you to plan ahead, for example in accepting new partners and raising investments, protecting intellectual property, establishing management rules through Articles, share sale or transfer procedures and so forth.

Managing the business activity by establishing a company shows vendors and clients that this is a serious, solid business.

In Israel, companies are established and managed according to the Companies Law, and their current functions require a dual bookkeeping and audit by a CPA.
Company owners are required to show earnestness in anything to do with the company’s routine management, to avoid breaching laws and regulations by the income tax authorities, Ministry of Justice and other agencies, which could lead to sanctions and fines.

Taxation wise too, establishing a company in Israel is profitable since the Companies Tax awards the company certainty, since it is fixed at a rate of 23% while an individual’s income as a “licensed dealer” is determined according to actual income levels and could reach up to 49%.

Establishing a company in Israel also guarantees its owners that no payments will be made to Social Security and health fess out of the profits accumulated in its coffers.
Payments to Social Security are deducted only when salaries are cashed, so that the company’s coffers accumulate greater funds than those of a licensed dealer.
Don’t forget that an individual paying tax as a licensed dealer has to pay Social Security and health fees for their entire earnings!

The right time to establish a company in Israel

The right time to establish a company in Israel is individual for each case.
Regardless of an economic analysis and economic profitability in anything to do with taxes and ancillary expenses, some entrepreneurs decide to establish companies even before they have any revenues.

Entrepreneurs dealing with high-tech, banking, internet, food, digital and pharmaceuticals realize that establishing an LLC in Israel provides them with many business and legal benefits, regardless of the operation costs.

The operation costs of establishing a company in Israel mainly include an annual fee to the Israeli Registrar of Companies, amounting to approximately NIS 1,500 and current CPA fees averaging approximately NIS 1,400.

An Israeli company is an independent legal being created on its establishment date, which forms a legal entity that is separate from the company’s founders.

In other words, the company will have legal rights and obligations of its own, that will be unrelated and will not affect its shareholders and officers.

The company is authorized to execute contracts with vendors, sell merchandize to clients, take loans, purchase assets, register property in its name etc.

Unlike a person managing their business as a licensed dealer, an Israeli company could use its Articles to create a set of rules applicable to any of its officers.

Establishing a company in Israel – selecting a name for the company

When you file the documents necessary to establish a company with the Israeli Registrar of Companies, you also have to provide the name you want for your company.

Before we file the name for registration, we run several tests that include, inter alia: reviewing the Israeli Registrar of Companies’ database to check that the name isn’t taken or similar to an existing name, and an identical review of the Israeli trademarks’ database.

When we establish companies for business that will operate abroad, we run additional tests concerning its name, using such databases of European, American and other government entities.

Drafting Articles to establish a company in Israel

The company’s Articles of Association form a fundamental document, since they determine important rules governing its management and shares.

The Articles contain clauses taken directly from the Companies Law which could not be stipulated against, but there are many other provisions that could be shaped and worded as we please.

The Articles are a contract amongst shareholders and between them and the company.
Meaning, the Articles obligate the shareholders to act accordingly both amongst themselves and within the company itself.

The provisions provided in the Articles’ initial version greatly impact the company’s day-to-day life and managerial routine thereafter.

When establishing a company, one should consider the various potential future scenarios and prepare suitable business and legal protection clauses, from the manner of transferring shares that will apply to all shareholders to drafting clauses dubbed “poison pills” to avoid a hostile takeover against the company.

A founders’ agreement when establishing a company

When there are at least two founders establishing a company, a founders’ agreement is advisable in addition to the Articles.

A founders’ agreement differs from Articles of Association since it only applies to its parties and not the company.
In addition, the agreement is discrete and only its parties are privy to it, as opposed to Articles that are available to the public.

Before establishing a company, entrepreneurs want to make sure they can divide the roles between them and reach understandings.
As part of the founders’ agreement, they set guidelines, plan the first actions necessary to establish the company and describe each founder’s responsibilities.
Usually, a founders’ agreement also includes confidentiality and non-compete clauses, or clauses limiting the entrepreneurs’ competition against each other.

Should the founders’ agreement ripen and the entrepreneurs’ vision be realized into a company, most of the agreement’s provisions could be incorporated in the Articles to preserve the parties’ objectives and aspirations at the core of the company.

Commercial agreements following the establishment of a company in Israel

Often, as early as the establishment of the company, entrepreneurs ask their commercial lawyer to draw several commercial agreements that will serve the company.

These are usually agreements with employees, vendors and clients, research and development agreements, distribution agreements, English agreements if necessary and so forth.

Actions following the establishment of a company in Israel

Every company in Israel has to maintain a bank account in its name, in order to receive payments from clients and pay vendors and employees.
Several actions have to be taken once the company is established:

Drafting minutes of a resolution by the company’s board, to determine its signatories concerning its bank account.

Selecting the bank in which the company will maintain its account and the banking services it will be authorized to use.

Determining the identity of the company’s CPA, CEO, etc.

Services by the Israeli Registrar of Companies following the establishment of the company

Pledge registrations, removals and amendments in the company’s extract.

In Israel, a company extract is a document similar to a real estate property’s land registration extract.
A company extract is issued once a company is established and contains its name, registration number, incorporation date, registered address, details of potential pledges, share capital composition, main shareholders and the names of the company’s directors.

Annual fee collection – in addition to the fee for establishing the company, there is also an annual fee to be paid to the Israeli Registrar of Company, from NIS 1,043 to NIS 1,386 (depending on payment date).

Document review and reports concerning companies – such as board composition changes, share transfers, share capital changes, etc.

• Handling a voluntary company liquidation.

Changes following the establishment of a company that are to be reported to the Registrar of Companies

Several actions have to be reported to the Registrar upon their taking:

Increase or annulment of the company’s registered share capital, changes in its board’s composition, auditors termination, share transfers or allocations, changes in its Articles, alteration of its registered address, details of pledges it created, in addition to an annual report to the Israeli Registrar of Companies.

Most actions have to be reported to the Israeli Registrar of Companies within 14 days of the relevant decision.

The Companies Law determines that a company that failed to report to the Israeli Registrar of Companies as necessary of any of the above mentioned actions breached its duty and the Israeli Registrar of Companies is authorized to fine it.

Company name change following its establishment

Should the lawful majority in a meeting of the company’s shareholders decide to change its name, the minutes are to be sent to the Israeli Registrar of Companies along with an appropriate form.
The Israeli Registrar of Companies will review the new name just like a name for a new company wishing to be registered.

Company Articles change following its establishment

Alterations of company Articles are fairly common compared with a company name change.

The decision to change the Articles is usually taken when the company raises an investment and the new shareholder conditions their investment on alterations to the Articles and addition of clauses according to their legal and business interests.

To change the Articles, the company has to hold a shareholders’ meeting and resolve with an ordinary or another special majority obligated by the Articles.
Report of the Articles’ change and a copy of the new Articles have to be filed with the Israeli Registrar of Companies within 14 days, as mentioned.

Relevant Israeli legal provisions

The companies Law of 5759-1999.

The Companies Ordinances (Reporting, Registration Details and Forms) of 5760-1999.

The Companies Ordinances (Fees) of 5761-2001.

The Companies Ordinances (Reporting, Registration Details and Forms) (Amendment) of 5775-2015.

A reasoned legal caution letter

Prior to drafting a caution letter, you have to be well acquainted with the case’s facts and then present the recipient with their legal defaults and your demands of them.
Furthermore, you have to support the legal arguments with references to relevant legislation and sometimes with case law examples as well.
That is coupled with arguments based on legal doctrines such as bona fides, damage mitigation etc.

In order to write a persuasive caution letter that will achieve the desired goal, you should reason your arguments and demands in an original, unique fashion to motivate the recipient to act as required and avoid handling the differences in court.

In a caution letter, the battle takes on a mental aspect too and often it is our job to persuade the recipient that they will not have the upper hand in court, but rather the other way around.

When does a lawyer send a caution letter?

Adv. Dror Harel’s Israeli law firm specializes in writing and sending caution letters before filing suits in the following cases:

• A caution letter concerning a business dispute between partners of between a supplier and their client.
• A caution letter following commercial dispute due to the breach of a business contract.
• A caution letter from a client to a business that failed to provide them with the promised service or product.
• A caution letter for an un-repaid loan.
• A caution letter to a tenant due to a breach of lease and caution prior to taking legal actions.
• A caution letter from a tenant to their landlord due to failure to repair faults and malfunctions in the property and causing damages to the tenants.
• Civil disputes between neighbors.
• Drafting caution letters to debtors due to un-repaid monetary debts.
• A caution letter to a college that sells classes due to false displays and consideration failure.

A caution letter prior to a lawsuit is a common legal service that serves various purposes.
A professional caution letter could nip a legal dispute in the bud.

A seasoned attorney drafting a good caution letter reviews the legal situation, describes the facts and circumstances, provides legislation and case law references and requires the recipient to act as demanded in order to avoid a lawsuit that as mentioned will only entail additional expenses and inconveniencies for both parties.

What is the right time to send a caution letter prior to a lawsuit?

As mentioned, a caution letter prior to a lawsuit is usually sent as a last resort before filing a suit with the relevant court.
Of course, you should take into account that sending a caution letter from an attorney puts an end to private communications between the parties and the case takes on a professional legal character.

If you are on the receiving end of the caution letter, it is highly recommended not to respond on your own but rather seek legal counsel from an attorney that will draft an appropriate response letter.

Without suitable legal training, corresponding with the other party that already hired a lawyer could damage the case, since there are professional legal ways of handling the correspondence that will most likely be presented as evidence in court later on, should you get there.

The outcomes of a professional caution letter from a lawyer

One cannot predict how each recipient will react to a caution letter, since we each respond differently.
Some recipients are quick to respond and comply with demands, others negotiate and reach a settlement shortly thereafter, and still others fail to respond at all – which necessitates procedures and lawsuits.

However, our firm’s legal experience shows that in most cases, when the caution letter is well-put the recipient understands what’s required of them and the ramifications in case they refuse to cooperate, which leads to quick, efficient negotiations that eventually prove beyond any reasonable doubt that the caution letter strategy proved it worth and saved the client a great deal of expenses.

Business law attorney in Israel for a caution letter

Adv. Dror Harel’s Israeli law firm is highly experienced in drafting special, efficient caution letters for individuals and corporations.
Feel free to contact us to learn more.