Delaware Amends Laws Relating to Corporations, LLCs, LPs, and Partnerships

September 25, 2014

Many Massachusetts residents elect to incorporate their businesses under the often more favorable and flexible business laws of Delaware. Accordingly, it is important to be aware of changes in the applicable Delaware statutes, and to understand how those amendments affect existing and future business entities incorporated under those laws.

Delaware recently amended its General Corporation Law, its Limited Liability Company Act, its Revised Uniform Limited Partnership Act, and its Revised Uniform Partnership Act. Those amendments, as explained in a recent National Law Review article, are summarized below.

Corporations

  • Written consents to corporate action may now be executed to be effective at a future date (up to sixty days from the date of execution), so long as the person executing such consent becomes a director or a shareholder prior to the future effective date.
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  • Stockholder approval is no longer required for the corporation to make certain amendments to its Certificate of Incorporation. Generally, however, such amendments must be disclosed in notices of special or annual meetings.
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  • Section 251(h), which regulates merger and consolidation of domestic corporations, was modified to remove uncertainty regarding the permissibility of tender and support agreements and rollover agreements in such transactions, and to clarify the requirements applicable to such transactions.

Limited Liability Companies, Limited Partnerships, and Partnerships

  • LLCs and LPs must maintain a current record that identifies the name and last known address of each member and manager of an LLC or of certain partners of the LP, and are required to provide this information upon request, including the name, business address, and telephone number of a natural person with access to this record.
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  • Similar to changes to consent provisions for corporations, a person now may consent to an action to be effective in the future, provided that the person is a member of the LLC or a partner of the LP or partnership as of the stated effective date. However, the LLC Operating Agreement or Partnership Agreement may provide to the contrary.
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  • Each LLC member, LP limited partner, or partnership partner is entitled to request and view the entity's books and records either in person, or through an attorney or other agent. When acting through an attorney or other agent, however, such member or partner must provide a power of attorney or other written authorization authorizing such action on his behalf.
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  • An additional means for revocation of the dissolution of an LLP or LP is also now available under the statutory amendments.
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To further discuss how these amendments may affect your Delaware corporation, limited liability company, limited partnership, or partnership, please contact a business attorney at Parker | Scheer today.