“)a)(1) A court may attribute a debt of a company to a shareholder thereof, if it finds that in the circumstances of the case it is just and proper to do so, in the exceptional cases in which the use of the separate legal personality is made in one of the following:
(a) in a manner that may defraud a person or deprive a creditor of the company;
(b) in a manner that harms the purpose of the company and while taking an unreasonable risk as to its ability to repay its debts, provided that the shareholder was aware of such use, and taking into account his holdings and the fulfillment of his obligations to the company under sections 192 and 193 and taking into account the company's ability to repay its debts.
(2) For the purposes of this subsection, a person shall be deemed to be aware of the use as stated in paragraph (1)(a) or (b) even if he suspects the nature of the conduct or as to the possibility of the existence of the circumstances that caused such use, but refrains from clarifying them, except if he acted negligently only."
- It is clear from the provision of the section that lifting the corporate veil will be done only in exceptional cases, in which the principle of the company's separate legal personality is abused in order to defraud a person or deprive a creditor, or in cases where an act is done that harms the purpose of the company, while taking an unreasonable risk in relation to its ability to repay its debts. In addition, a requirement of awareness on the part of the shareholder was established for the misuse of the principle of separate legal personality.
As appears from the ruling of the National Labor Court, in order to obligate a shareholder to the company's debts, a sufficient factual basis must be laid for lifting the veil (Application for Leave to Appeal 52353-08-16 A.B. TOCO CHEF IN A TAX APPEAL AND ITZIK ANCONIA - ADMARIAM GAVR NEGOUSE (13.11.06) (hereinafter - the Toko Chef case)]. As a rule, non-payment of rights by virtue of the protective labor law, in and of itself, is not a sufficient reason for lifting the corporate veil. In order for such a drastic step to be taken, it is necessary to prove an exceptional case of the use of the separate legal personality for the purpose of avoiding payment of rights (see Labor Appeal (National) 14306-06-14 Tamnon HaGalil Hotline in a Tax Appeal against Shata Afromashvili (10 December 2015), and see the Toko Chef case].