General definitionAn association is defined in Article No. 1 of Israel's Associations Law. חוק העמותותis defined as an organization founded by 2 or more people, operating for a legal purpose, not intended to distribute profits to its members, and whose main objective is not to make a profit.
The 3 main characteristics of an association are :
- Prohibition on distributing profits.
- The association's activity must be solely within the scope of the objectives that have been validated by the association. (Ex: Politics, Sport, Education, Religion, Arts etc...)
- Membership of an association is a personal right, and cannot be transferred to a third party.
Israel's Associations Law requires associations to create 3 main bodies:
- A general meeting - אסיפה כללית. (As for a classic company).
- An Executive Committee - ועד מנהל. (The corporate equivalent of the Board of Directors).
- An Audit & Control Committee - ועדת ביקורת. (This committee can be formed by an accounting firm, accredited by the Chamber of Associations in Israel).