Delaware General Assembly

Signed 6/30/01

The General Assembly has ended, the current status is the final status.

5/3/01

Sharp

Sen. Adams, Vaughn, Winslow
Reps. Valihura, DiLiberto

AN ACT TO AMEND TITLE 8 OF THE DELAWARE CODE RELATING TO THE GENERAL CORPORATION LAW.

Section 1. The Delaware Revised Uniform Partnership Act ("DRUPA") allows (and in some cases requires) partnerships to file various statements with the Secretary of State. Section 15-108 of DRUPA requires names of partnerships filing certificates to be distinguishable on the records of the Secretary of State from the names of other entities. The amendment to Section 102(a)(1) is the reciprocal of Section 15-108 of DRUPA. Sections 2 and 3. The amendments to Section 134 clarify the procedures relating to changes in the address or name of a registered agent. Sections 4, 5, 6 and 7. The amendments to Section 157 provide that the board of directors may authorize one or more officers to designate officers and employees of the corporation or of any of its subsidiaries to be issued rights or options of the corporation and to determine the number of rights or options to be issued to those officers and employees. The terms of the rights or options, including the exercise price (which may include a formula by which such price may be determined), must be established by the board of directors. The board of directors must specify the total number of rights or options that may be awarded by an officer, and an officer may not designate himself or herself as a recipient of a right or option. Section 8. The amendment to Section 215(a) makes the provisions of Sections 211(a) and 212(c) and (d) applicable to nonstock corporations, with the references in such subsections to stockholders and the board of directors being deemed, when applied to a nonstock corporation, to be references to the members of such corporation and to the governing body of such corporation, respectively. Section 9. New subsection (e) of Section 215 provides that, in the specified circumstances, any requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission. Section 10. Under this amendment to Section 218(a), entities other than corporations may also become voting trustees. Section 11. The amendment to Section 228(d)(1) provides that such subsection applies to consents in lieu of a meeting by members of nonstock corporations. Section 12. The amendment to Section 232 makes the title of such section "Notice by electronic transmission." Section 13. The amendment to Section 245(c) brings that section into conformity with Section 242(a) as amended in 1996. See 72 Del. Laws, C.123, §5. Sections 14, 15, 17, 18 and 19. These amendments to Section 251(g) expand the types of entities that may be used in a holding company reorganization to include limited liability companies of this State. In order to protect the rights of the former corporation's stockholders, the limited liability company will be required to adopt provisions in its organizational documents which impose on the limited liability company and its managers certain duties and requirements applicable to corporations and directors of corporations of this State. Section 16. The amendment to Section 251(g)(4) brings that subsection into conformity with Section 242(a) as amended in 1996. See 72 Del. Laws, C.123, §5. Section 20. The amendment to the second paragraph of Section 251(g) is intended to ensure that a holding company reorganization involving a limited liability company of this State does not affect, limit or extinguish the prior standing of a stockholder to institute or maintain derivative litigation on behalf of the constituent corporation, consistent with decisions of the courts of this State preserving such rights in holding company reorganizations involving corporations of this State. Section 21. The amendment to Section 262(d)(2) clarifies that notice of appraisal rights given after a merger or consolidation is to be given by the surviving or resulting corporation. Sections 22, 23, 24, 25 and 26. The amendments to Section 263 permit Delaware corporations to merge with general partnerships, as well as limited partnerships. The amendment to Section 263(c) protects any stockholder of a merging corporation who would become a general partner of a surviving or resulting partnership by requiring that the stockholder approve the agreement of merger or consolidation. Sections 27, 28 and 29. The amendments to Section 265 permit a Delaware general partnership to convert to a Delaware corporation. Sections 30, 31 and 32. The amendments to Section 266 permit a Delaware corporation to convert to a Delaware general partnership. Sections 33 and 34. The amendments to Section 311(a) clarify which stockholders are entitled to vote on revocation of dissolution. The intent of the statute is to confer such a vote on those who were the stockholders at the time of dissolution. The current language of the statute, however, could be read to permit a vote by transferees subsequent to dissolution. This amendment removes that potential ambiguity. Section 35. The amendment to Section 312(i) eliminates the requirement of calling a meeting of stockholders immediately after renewal or revival of the certificate of incorporation. A meeting of stockholders could be ordered to be held under Section 211(c) if the periods for which Section 211(c) provides have passed while the corporation was in dissolution. Section 36. Section 36 provides for an effective date of July 1, 2001.

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Takes effect upon being signed into law

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