Establishment & Registration of the Amuta and Halatz Non-Profit Organizations in Israel

There are two types of non-profit organizations in Israel: Amuta and Halatz. In light of recent legislative amendments, the differences between these two types of non-profit organizations are insignificant, and most regulations apply to both almost equally. However, there are still specific differences between the two types of organizations on which it makes sense to obtain individual specialist advice.


An Amuta is a non-profit association formed by two or more founders (association members) for a legitimate purpose not aimed at making a profit and distributing it among the association members.


A Halatz is a non-profit company whose articles of association specify only public purposes (which are included in a list that is an integral part of the articles of association) and whose articles of association necessarily include provisions prohibiting the distribution of profits or “other distribution” of assets or rights to shareholders.


The registration procedure for both Amuta and Halatz in Israel takes place in two stages.


  • Stage one: Registration in the “Registry of Non-Profit Organisations” at the Ministry of Justice. During the registration process of Amuta or Halatz, all necessary documents must be submitted, including a receipt for payment of the registration fee. The registration stage ends with receiving a “Certificate of Registration” issued by the “Registry of NPOs.”
  • Stage Two: Opening files with the tax authorities: income tax, VAT and national insurance (if employers have employees).


Setting up and running a non-profit organization in Israel can have several undeniable advantages, namely, the opportunity to conduct organized charitable activities alongside business activities, the opportunity to support in the public and social sphere, the opportunity to strengthen the connection and affinity with the country, the opportunity to build personal social activities, tax considerations and much more.


Please get in touch with us for legal, tax and professional advice on this matter.

An Amuta's Structure

In accordance with the “Amutot Law,” the corporate structure of any such organization must consist of several mandatory bodies: the General Meeting of Amutot Members, the Amutot Management Committee and the Audit Committee.

The purpose of the existence of these mandatory structural units is to ensure the proper management of Amuta and to ensure its stability.

  • General Assembly: an organizational structure in which all members of Amuta who were founding members at the time of registration or admitted to it by the provisions of the Articles of Association participate. The assembly members shall have the right to vote on any matter brought up for discussion; the decisions taken at the assembly shall be binding on all members of Amuta and its officers. Each member of Amuta shall have one vote unless the bylaws provide for veto power for specific members. For example, the Chairman of Amuta may have veto power. Currently, the “Registrar of Associations” approves the adoption of the bylaws with veto clauses under certain conditions and in some instances.
  • Executive Committee: the organizational structure solely responsible for the association’s management. It consists of at least two persons from among the members of Amuta, with the first Executive Committee consisting of the founders of Amuta. After that, the general assembly appoints additional committee members. The Executive Committee is an entirely voluntary body; its members cannot be reimbursed in any form (except for compensation and reimbursement of expenses; this will be detailed separately).
  • Audit Commission (audit body): an organizational structure whose role is to verify the reliability and legality of Amuta’s activities and those of its structural units and the cost-effective achievement of its objectives. The general assembly also appoints the Commission and must include at least two persons from among the members of Amuta.

There are several existing prohibitions on the behaviour and composition of the Executive Committee and the Audit Committee:

  • Prohibition of payment of remuneration to members of the Executive Committee and members of the Audit Committee, whether in the form of salary in cash, in the form of transfers to an account or in any other form.
  • Prohibition of duplication of members of the Executive Committee and the Audit Committee: one person may not be a member of both governance structures.
  • Prohibition of family ties between a member of the Executive Committee and a member of the Audit Committee. Amuta, which for some reason finds it difficult to appoint an Audit Committee from among its members (lack of Amuta members who are free to engage in this activity or lack of Association members who have the necessary skills and knowledge for this type of activity, etc.), may appoint an audit body outside the Audit Committee and staff it with a paid external accountant (who is not its full-time accountant). His or her role would be only to review the financial statements and not act as an internal auditor. Alternatively, other paid staff, such as a lawyer, tax consultant or a person trained as an internal auditor with at least two years of audit experience, may be hired, subject to the approval of the Registrar of Associations.

Please get in touch with us for legal, tax and professional advice on this matter.

The Terms of Office for Non-Profit Organizations

Continuing the previous material on mandatory institutions in Amuta, by the Law and the instructions of the Register of Non-Profit Organisations, it is also essential to discuss the terms of office of Amuta’s bodies and officers.

Many believe that it is sufficient to elect Amuta institutions either on an ad hoc basis or even for an indefinite period of time without complying with the provisions of the Law and the instructions to appoint institutions at the required frequency and for fixed terms.

As part of its inspections and audits, the NPO Registry considers it very important to select mandatory institutes and office bearers strictly per the prescribed regulations.

In this post, we will clarify some questions regarding the term of office of mandatory institutions and officials in the Association.

Which institutions or officers are we talking about?

  • Board of Directors
  • Audit Committee
  • The accountant of the Association
  • Governing bodies or other officers as provided in the Association’s bylaws.

Instructions from the Registry of Non-Profit Organisations regarding the length of the term of office of Amuta’s mandatory institutions and officers:

  • An Amuta with a typical charter must select and appoint a Governance Committee and an Audit Committee for the Amuta each year.
  • An association that has yet to adopt a typical charter must elect and appoint a Board of Directors and an Audit Committee at least every 4 years (unless the charter provides a shorter period to do so).

It is important to emphasize that even if Amuta’s charter does not specify a term of office, according to the instructions of the NPO Registry, a situation in which a member of the Board of Directors or a member of the Audit Commission is appointed to a position with a term of office not limited in time is contrary to the norms of the Law and the instructions. In this regard, the NPO Registry’s instructions state that the term of office of Amuta’s bodies will be limited to four years.

  • The accountant of Amuta will be elected every year for a term of one year.

Can the members of the Board of Directors or members of the Audit Commission get elected for additional terms?

  • There is no impede Amuta from electing the same members of the Board of Directors and members of the Audit Committee for additional terms. If Amuta has a general charter, it may elect the same members of the Board of Directors and members of the Audit Committee (all or some of them) for additional terms of one year each year.
  • An Amuta whose charter does not exist and does not specify a term of office may elect the same members of the Board of Directors and members of the Audit Committee for additional terms of up to 4 years.

Please get in touch with us for legal, tax and professional advice on this matter.

Specifics of the Non-Profit Registration

In the process of registering non-profit organizations (Amuta or HALAC) with the State Corporations Office and the Tax Department, it is essential to note the following: 

  • The name of the non-profit organization. The founder(s) may choose any name. The main thing is that it must differ from the name of all already existing registered companies, organisations or associations in Israel. As part of the registration procedure, the Israel Corporations Authority must be offered 3 name options in order of priority.
  • Specify the purposes for establishing the non-profit organization. The formulation of the purposes is essential for the choice of the form of taxation. It should also be remembered that changing the original purposes to other purposes that are substantially different in content will always require court approval.
  • Provide the organization’s Articles of Association. It is recommended to initially register a non-profit organization with model Articles of Association (for Amuta, the existing Articles of Association with the addition of standard amendments, for HALAC, the recommended Articles of Association for a non-profit organization).
  • Specify the legal address of the organization. As part of the registration procedure, the legal address of the organization should be specified.
  • Take into account the procedure for liquidation of the non-profit organization. According to the legislation, in case of liquidation of a non-profit organization, all its assets and rights will be transferred to HALAC or Amuta with similar purposes. Therefore, before registration, it should be clear what assets and rights should be transferred to the established organization, whether it should be limited to the rights of use only, or whether any other arrangements should be established by signing agreements.
  • Take into account the peculiarities of favourable taxation. For a non-profit organization to benefit from exemption from income tax and VAT on its income, the organization (association) should be established by at least 7 (seven) founders, most of whom are unrelated. Therefore, if the founders initially have less than 7 (seven) members, adding up to 7 (seven) additional founders from the list of members is necessary.
  • Take into account the legal requirements for the founders of the organization. A founder may be any private person (Israeli or foreign) and any Israeli or foreign company. Suppose one of the founders is a private person who does not have Israeli citizenship or a foreign company. In that case, this fact may complicate the registration procedure with the Corporation Authority, the Tax Authority and the banks (compared to the situation when the founders are Israelis and/or Israeli corporations). A founder cannot be a private individual bankrupt or restricted by banks and authorities. In addition, a corporation in the liquidation process cannot be a founder.

Please get in touch with us for legal, tax and professional advice on this matter.

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Roman Tzerelstein is a  CPA (Certified Public Accountant), and licensed auditor in Israel (Roe Heshbon).
Registering and starting a business, taxation, Esek Murshe, Hevra Baam, Amuta and Halatz registration. Annual report, capital declaration.
Tax refunds, counseling, pension taxation. Professional accounting services for businesses at any level.

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Ramat Gan, 52573

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