ISRAEL Law and Practice Contributed by: Yaron Mehulal, Nataly Davidai and Shalom Hershkovitz, FISCHER (FBC & Co.)
Thus, the actual structure of incorporation depends upon the selected source of law governing the crea - tion of the structure, namely: • an amutah has a separate legal personality and is governed by the Amutot Law, 5740-1980; • a charitable company has a separate legal person - ality similar to a corporation and is governed by the Companies Law, 5759-1999; • a public hekdesh , which is a form of charitable trust, does not have a separate legal personality and is governed by the Israeli Trust Law; and • a charitable fund has a separate legal personality as a corporation and is governed by the Compa - nies Law, 5759-1999. In fact, sophisticated donors usually prefer to incor - porate a charitable company or charitable fund, as both of these structures provide more flexibility in terms of ability to retain control and allow for the use of up-to-date solutions. However, if the not-for-profit organisation is intended to include many members of the public, it is recommended to use an amutah , which is easier to manage with a large number of members and benefits from a better public image (although for no good reason).
Nonetheless, as all said structures require extensive reporting and are subject to extensive scrutiny by the Registrar and the public, a donor that only wishes to provide grants to other not-for-profit organisations may wish to refrain from incorporating or forming any charitable structure while they are alive, and to set up a testamentary charitable trust (ie, a public hekdesh ) in their will. Alternatively, a donor may wish to consider setting up a Donor-Advised Fund with an authorised and regulated organisation.
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