Delaware General Assembly

Signed 6/14/05

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

4/21/05

Vaughn

Reps. Valihura, Wagner

Rep. J. Johnson

AN ACT TO AMEND CHAPTER 18, TITLE 6 OF THE DELAWARE CODE RELATING TO THE CREATION, REGULATION, OPERATION AND DISSOLUTION OF DOMESTIC LIMITED LIABILITY COMPANIES AND THE REGISTRATION AND REGULATION OF FOREIGN LIMITED LIABILITY COMPANIES.

This bill continues the practice of amending periodically the Delaware Limited Liability Company Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act. Section 1. This section amends § 18-101(7) of the Act to confirm that a member and manager of a limited liability company and an assignee of a limited liability company interest are bound by the limited liability company agreement. Section 2. This section amends § 18-106(a) of the Act to expand the permitted purposes of a limited liability company. Sections 3 and 5. These sections amend § 18-212(i) and § 18-214(g) of the Act to confirm that these sections of the Act address the effect of domestication and conversion, respectively, as a matter of Delaware law. Section 4. This section amends § 18-213(b) to conform the approval requirements for the transfer of a domestic limited liability company to the requirements for the conversion of a domestic limited liability company. Section 6. This section amends § 18-301(b)(3) of the Act to clarify the way in which a person is admitted as a member of a limited liability company pursuant to a merger or consolidation. Section 7. This section amends § 18-301(c) of the Act to confirm that a person is admitted as a member of a limited liability company in connection with a domestication or a conversion as provided in the limited liability company agreement. Section 8. This section amends § 18-406 of the Act to clarify the circumstances under which members, managers and liquidating trustees of a limited liability company may rely on the records of, or information relating to, the limited liability company. Sections 9, 10, 11, 12, 13, 14 and 15. These sections amend § 18-703 to clarify the nature of a charging order and provide that a charging order is the sole method by which a judgment creditor may satisfy a judgment out of the limited liability company interest of a member or a member’s assignee. Attachment, garnishment, foreclosure or like remedies are not available to the judgment creditor and a judgment creditor does not have any right to become or to exercise any rights or powers of a member (other than the right to receive the distribution or distributions to which the member would otherwise have been entitled, to the extent charged). Section 16. This section amends the Act to add a new § 18-806 to provide, under certain circumstances, for the revocation of the dissolution of a limited liability company. Sections 17 and 18. These sections amend the Act to add a new § 18-912 to identify the activities of a foreign limited liability company in the State of Delaware that will not constitute doing business for purposes of Subchapter IX of the Act and move former subsection (b) of § 18-902 of the Act to new § 18-912. Section 19. This section provides that the proposed amendments of the Act shall become effective on August 1, 2005.

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Takes effect upon being signed into law

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