However, this in itself is not enough, since the mechanism of a derivative claim was a well-known mechanism, which was used in case law long before it was enshrined in the Companies Law (see, for example, Civil Appeal 180/75 Leviv v. Israel Industrial Development Bank in Tax Appeal, IsrSC 30(3) 225, at p. 229 (Justice Y. Sussman) (1976); Civil Appeal 216/84 Baumkar v. Bank Leumi Le-Israel Ltd., IsrSC 40(1) 414 (1986); Civil Appeal 215/91 Agatan in Tax Appeal v. Lim in Tax Appeal IsrSC 48(2) 43 (1994)). Hence, the legislature was aware of the possibility of filing a derivative suit long before the enactment of the Companies Law in 1999.
- Another interpretive way to trace the legislature's intention is by comparing the legal status of companies for the benefit of the public and the legal status of non-profit organizations. This is because public benefit companies are corporations that have common characteristics with non-profit organizations: in both cases they are corporations that are not for-profit companies; In both cases, the shareholders (or members) do not have the right to benefit from the assets of the corporation upon its dissolution (see Sections 345A and34521(a) to the Companies Law in the matter of a public benefit company, and Section 1 and58(a) to the Non-Profit Organizations Law).
The arrangement that was enacted in relation to a public benefit company was discussed as a bill in 2006, and was enacted in 2007 – that is, when the legislature had before it both the fixed arrangements in relation to non-profit organizations and the institution of the derivative claim in relation to commercial companies.
As I noted, in the Companies Law, the legislature explicitly applied the mechanism of a claim that is derived from companies for the benefit of the public as well. It also granted the Registrar of Endowments the right to file a derivative claim on behalf of a public benefit company, in a manner that expanded the supervision of these companies within the framework of the derivative claim mechanism in relation to commercial companies.
- When it enacted the arrangement that applies to companies for the benefit of the public, the legislature was aware of the need that exists specifically in such companies, of the unique goals underlying their establishment, of comprehensive enforcement and supervision arrangements. Thus, in the explanatory notes to Section 345D of the Bill (Amendment No. 4) of the Companies Law, it was determined that:
"Section 194 of the law states that any shareholder and any director of a company may file a derivative claim. In light of the special nature of a public benefit company, a special public interest may arise in respect of it due to a breach of the duties of care and trust by its officers, as a result of which the realization of the public purpose is impaired. Since there is an inherent problem with enforcement by the shareholders in a public benefit company, it is proposed to determine that in a public benefit company, the Registrar of Endowments and the Attorney General will also be able to file a derivative action, so that the duties of care and trust imposed on the officers of the company can be enforced" (ibid., at p. 1100).