Delaware General Assembly

Signed 6/10/10

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

4/21/10

M. Smith

Reps. B. Bennett, Carson, Hudson, Kovach, Lavelle
Sen. Blevins, Sorenson

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 provide, in light of the decision of the Delaware Supreme Court in Olson v. Halvorsen, C.A. No. 1884 (Del. Supr. Dec. 15, 2009), that a limited liability company agreement is not subject to any statute of frauds. Sections 2, 26, 27 and 28. Sections 2, 26, 27 and 28 amend §§ 18-105(b), 18-910(b), 18-911(a) and 18-911(c) of the Act to allow for service of process upon the Secretary of State thereunder by means of electronic transmission but only as prescribed by the Secretary of State, to authorize the Secretary of State to issue such rules and regulations with respect to such service as the Secretary of State deems necessary or appropriate, and to enable the Secretary of State, in the event that service is effected through the Secretary of State in accordance therewith, to provide notice of service by letter sent by a mail or courier service that includes a record of mailing or deposit with the courier and a record of delivery evidenced by the signature of the recipient. Section 3. This section amends § 18-106 of the Act to confirm the broad powers of a limited liability company. Sections 4, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 20 and 30. Sections 4, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 20 and 30 amend §§ 18-203, 18-206(a), 18-206(b), 18-206(d), 18-209(a), 18-209(b), 18-209(c), 18-209(d), 18-209(e), 18-209(f), 18-209, 18-210, 18-301(b) and 18-1105(a) of the Act to provide a mechanism to implement a short form merger under new Section 267 of Title 8 where a domestic limited liability company is the parent Entity (as defined in new Section 267(e)(2) of Title 8). Section 5. This section amends § 18-204 of the Act to clarify, for purposes of the laws of the State of Delaware, when a power of attorney will be irrevocable, and the effects of such irrevocability. Sections 12, 18 and 19. Sections 12, 18 and 19 amend §§ 18-209(c)(8), 18-213(b)(7), and 18-216(e)(7) of the Act to allow for service of process upon the Secretary of State thereunder by means of electronic transmission but only as prescribed by the Secretary of State, and to authorize the Secretary of State to issue such rules and regulations with respect to such service as the Secretary of State deems necessary or appropriate. Section 21. This section amends § 18-305(f) of the Act to clarify both the categories of information that are within its scope and that the prescribed time period for responding to an information demand may be varied by a limited liability company agreement. Section 22. This section amends § 18-305(g) of the Act to make it consistent with other sections of the Act and to clarify and confirm that all amendments are valid if adopted in the manner provided for in the limited liability company agreement. Section 23. This section amends § 18-702(a) of the Act to confirm the circumstances in which an assignee of a limited liability company interest has the right to participate in the management of the business and affairs of a limited liability company. Section 24. This section amends § 18-704(a) of the Act to confirm the circumstances in which an assignee of a limited liability company interest may become a member. Section 25. This section amends § 18-902 of the Act to require that a foreign limited liability company registering with the Secretary of State must file a certificate, as of a date not earlier than 6 months prior to the filing date, issued by an authorized officer of the jurisdiction of its formation evidencing its existence, along with, if applicable, a translation thereof under oath. Section 29. This section amends § 18-1101 of the Act to provide that a limited liability company agreement that provides for the application of Delaware law shall be governed by and construed under the laws of the State of Delaware in accordance with its terms. This amendment is not intended to negate the application of Delaware law to the interpretation and enforcement of a limited liability company agreement that does not explicitly provide for the application of Delaware law or to negate the application of the internal affairs doctrine to Delaware limited liability companies. Section 31. This section provides that the proposed amendments of the Act shall become effective August 2, 2010.

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