Entrepreneurial activity and its organizational and legal forms are governed by the Act of Israel "About Companies" of 1999.

The main types of companies that can be registered in Israel are:
• companies
• branches and representative offices of foreign companies
• partnerships
• cooperatives
• non-profit organizations.

Companies
The most common legal form is a limited liability company. This means that each owner is liable in the amount of the value of owned shares. In this case the term "Limited" (or the abbreviation "LTD") is being added to the name of the company.
In accordance with Israeli laws, companies are divided into two main groups: public companies (open joint stock companies) and private companies (closed joint stock companies).

Public companies
Public company is an open joint stock company, whose shares are traded on the stock market. Thus, the company has the opportunity to receive investments by making its shareholders interested in prospective dividends from the company's activity. In order to enter the stock market and offer its securities, the company must be accepted as a member of the exchange and satisfy a number of requirements imposed by the Companies Ordinance and the Securities Act. Public companies must publish annual reports in the prescribed form that includes financial statements and report of the directors, with all this information available to the public.

Private companies
Unlike public companies, a private company cannot offer its shares to free sale. The board of directors and shareholders must approve any redistribution of the company’s shares between the shareholders. In accordance with the law a private company cannot have more than 50 shareholders. Information about financial status and activities of a private company is not public.

Branches and representative offices of foreign companies
A foreign company may register a branch, representative or subsidiary in Israel in accordance with the local law. In this case the foreign company must register with the Registrar of Companies and place there its list of directors and the power of attorney in the name of the representative of the company in Israel.

Partnerships
Establishment and operation of partnerships is governed by the Decree on Partnerships, which defines this legal organization form of enterprise as a union of several parties on mutual and equal basis. Herewith, regulation of relations within the partnership is carried out on the basis of a contract between the partners, which takes the value of statutes.

Cooperatives
This form of business is mainly used in agriculture, transport and certain types of marketing activities related to agricultural products.

Non-profit enterprises
Non-profit enterprises are typically used by charitable, educational, sport and other organizations that do not aim to earn profits and distribute them among its members, unlike companies and partnerships. However, these companies have every right to engage in economic activity, only the proceeds thereof should be directed to the development of their charter activities.