A sole shareholder of a company that was voluntarily liquidated after never having engaged in business activity, sought to revive it. The underlying purpose of the proceeding was to utilize the company's corporate seniority to meet threshold requirements and participate in construction tenders.
The Court held that the conditions allowing for the cancellation of a company's strike-off from the Registrar of Companies were not met. As a rule, there are two independent grounds for the revival of a company struck off the Israeli Registrar of Companies: first, when the company continued its business or was in operation at the time of the strike-off; and second, when there is another reason justifying it. The term in "operation" refers to a substantive requirement that actual activity took place in practice and a mere formal legal existence is not sufficient. Here, the company never conducted business activity or employed workers, and the desire to use its incorporation seniority in tenders does not constitute a legitimate justification but rather may create a misrepresentation. Therefore, the company was not restored to the Register of Companies.