Delaware General Assembly

CHAPTER 387

FORMERLY

SENATE BILL NO. 365

Section 1. Amend Subsection 3801(e), Title 12 of the Delaware Code by striking said subsection in its entirety and substituting in lieu thereof a new subsection as follows:

“‘Other business entity’ means a corporation, a partnership (whether general or limited), a limited liability company, a common-law trust, a foreign business trust or any other unincorporated business, excluding a business trust.”

Section 2. Amend Subsection 3801(f), Title 12 of the Delaware Code by striking the first sentence of said subsection in its entirety and substituting in lieu thereof a new sentence as follows:

“‘Governing instrument’ means any instrument which creates a business trust or provides for the governance of the affairs of the business trust and the conduct of its business.”

Section 3. Amend Section 3801, Title 12 of the Delaware Code by inserting a new subsection (h) thereto as follows:

“(h) ‘Independent Trustee’ means, solely with respect to a business trust that is registered as an investment company under the Investment Company Act of 1940, as amended (15 U.S.C. §80a-1 et seq.), or any successor statute thereto (the “1940 Act”), any trustee who is not an “interested person” (as such term is defined below) of the business trust; provided that the receipt of compensation for service as an independent trustee of the business trust and also for service as an independent trustee of one or more other investment companies managed by a single investment adviser (or an “affiliated person” (as such term is defined below) of such investment adviser) shall not affect the status of a trustee as an independent trustee under this Chapter. An independent trustee as defined hereunder shall be deemed to be independent and disinterested for all purposes. For purposes of this definition, the terms “affiliated person” and “interested person” have the meanings set forth in the 1940 Act or any rule adopted thereunder.”

Section 4. Amend Section 3805, Title 12 of the Delaware Code by inserting new subsections (f) and (g) thereto as follows:

“(f) Except to the extent otherwise provided in the governing instrument of the business trust, legal title to the property of the business trust, or any part thereof, may be held in the name of any trustee of the business trust, in its capacity as such, with the same effect as if such property were held in the name of the business trust.

(g) No creditor of the trustee shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the business trust with respect to any claim against, or obligation of, such trustee in its individual capacity and not related to the business trust.”

Section 5. Amend Section 3806, Title 12 of the Delaware Code by inserting new subsections (e) and (f) thereto as follows:

“(e) Unless otherwise provided in the governing instrument of a business trust, on any matter that is to be voted on by the beneficial owners, (i) the beneficial owners may take such action without a meeting, without a prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the beneficial owners having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all interests in the business trust entitled to vote thereon were present and voted and (ii) the beneficial owners may vote in person or by proxy.

(f) Unless otherwise provided in the governing instrument of a business trust, on any matter that is to be voted on by the trustees, (i) the trustees may take such action without a meeting, without a prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the trustees having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all trustees entitled to vote thereon were present and voted and (ii) the trustee may vote in person or by proxy.”

Section 6. Amend Section 3807, Title 12 of the Delaware Code by inserting new subsection (e) thereto as follows:

“(e) A trustee or registered agent of a business trust whose address, as set forth in a certificate of trust pursuant to § 3810(a)(1)b. of this title, has changed may change such address in the certificates of trust for all business trusts for which such trustee or registered agent is appointed, to another address in the State of Delaware by paying a fee as set forth in § 3813(a)(5) of this chapter and filing with the Secretary of State a certificate, executed by such trustee or registered agent, setting forth the names of all business trusts for which such trustee or registered agent is appointed, and the address of such trustee or registered agent before it was changed, and further certifying as to the new address of such trustee or registered agent for each of the business trusts recited in the certificate. Upon the filing of such certificate, the Secretary of State shall furnish to the trustee or registered agent a certified copy of the same under his hand and seal of office, and thereafter, or until further change of address, as authorized by law, the address of such trustee or registered agent in the State of Delaware of each of the business trusts recited in the certificate shall be located at the new address of the trustee or registered agent thereof as given in the certificate. A trustee or registered agent of a business trust whose name, as set forth in a certificate of trust pursuant to § 3810(a)(1)b. of this title, has changed may change such name in the certificates of trust for all business trusts for which such trustee or registered agent is appointed, to its new name by paying a fee as set forth in § 3813(a)(5) of this chapter and filing with the Secretary of State a certificate, executed by such trustee or registered agent, setting forth the names of all business trusts for which such trustee or registered agent is appointed, the name of such trustee or registered agent before it was changed, and further certifying as to the new name of such trustee or registered agent for each of the business trusts recited in the certificate. Upon the filing of such certificate and payment of such fee, the Secretary of State shall furnish to the trustee or registered agent a certified copy of the certificate under his hand and seal of office. Filing a certificate under this section shall be deemed to be an amendment of the certificate of trust of each business trust affected thereby and no further action with respect thereto to amend its certificate of trust under § 3810 of this chapter shall be required. Any trustee or registered agent filing a certificate under this section shall promptly, upon such filing, deliver a copy of any such certificate to each business trust affected thereby.”

Section 7. Amend Section 3813, Title 12 of the Delaware Code by inserting new subsection (a)(5) thereto as follows:

Section 8. Amend Section 3820, Title 12 of the Delaware Code by striking said section in its entirety and substituting in lieu thereof a new section as follows:

Ҥ3820. Conversion of other business entities to a business trust.

(a) Any other business entity formed or organized or existing under the laws of the State of Delaware or any other state or the United States or any foreign country or other foreign jurisdiction may convert to a business trust by complying with subsection (f) of this section and filing in the Office of the Secretary of State in accordance with § 3812 of this chapter:

(b) The certificate of conversion to business trust shall state:

(c) Upon the filing in the Office of the Secretary of State of the certificate of conversion to business trust and the certificate of trust or upon the future effective date or time of the certificate of conversion to business trust and the certificate of trust, the other business entity shall be converted into a business trust and the business trust shall thereafter be subject to all of the provisions of this chapter, except that notwithstanding § 3810(a)(2) of this chapter, the existence of the business trust shall be deemed to have commenced on the date the other business entity commenced its existence in the jurisdiction in which the other business entity was first formed or organized or otherwise came into being.

(d) The conversion of any other business entity into a business trust shall not be deemed to affect any obligations or liabilities of the other business entity incurred prior to its conversion to a business trust, or the personal liability of any person incurred prior to such conversion.

(e) When any conversion shall have become effective under this section, for all purposes of the laws of the State of Delaware, all of the rights, privileges and powers of the other business entity that has converted, and all property, real, personal and mixed, and all debts due to such other business entity, as well as all other things and causes of action belonging to such other business entity, shall remain vested in the business trust to which such other business entity has converted and shall be the property of such business trust, and the title to any real property vested by deed or otherwise in such other business entity shall not revert or be in any way impaired by reason of this chapter; but all rights of creditors and all liens upon any property of such other business entity shall be preserved unimpaired, and all debts, liabilities and duties of the other business entity that has converted shall remain attached to the business trust to which such other business entity has converted, and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it in its capacity as a business trust. The rights, privileges, powers and interests in property of the other business entity, as well as the debts, liabilities and duties of the other business entity, shall not be deemed, as a consequence of the conversion, to have been transferred to the business trust to which such other business entity has converted for any purpose of the laws of the State of Delaware.

(f) Unless otherwise agreed, or as required under applicable non-Delaware law, the converting other business entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of such other business entity and shall constitute a continuation of the existence of the converting other business entity in the form of a business trust. When the other business entity has been converted to a business trust pursuant to this section, the business trust shall, for all purposes of the laws of the State of Delaware, be deemed to be the same entity as the converting other business entity.

(g) Prior to filing a certificate of conversion to business trust with the Office of the Secretary of State, the conversion shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other business entity and the conduct of its business or by applicable law, as appropriate, and a governing instrument shall be approved by the same authorization required to approve the conversion.

(h) The provisions of this section shall not be construed to limit the accomplishment of a change in the law governing, or the domicile of, an other business entity to the State of Delaware by any other means provided for in an agreement governing the internal affairs of the other business entity or as otherwise permitted by law, including by the amendment of an agreement governing the internal affairs of the other business entity.

(i) In connection with a conversion hereunder, rights or securities of, or interests in, the other business entity which is to be converted to a business trust may be exchanged for or converted into cash, property, rights or securities of, or interests in, such business trust or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of, or interests in, another business trust or other business entity.”

Section 9. Amend Section 3821, Title 12 of the Delaware Code by striking said section in its entirety and substituting in lieu thereof a new section to read as follows:

“§ 3821. Approval of conversion of a business trust.

A business trust may convert to an other business entity formed or organized under the laws of the State of Delaware, upon the authorization of such conversion in accordance with this section. If the governing instrument specifies the manner of authorizing a conversion of the business trust, the conversion shall be authorized as specified in the governing instrument. If the governing instrument does not specify the manner of authorizing a conversion of the business trust and does not prohibit a conversion of the business trust, the conversion shall be authorized in the same manner as is specified in the governing instrument for authorizing a merger or consolidation that involves the business trust as a constituent party to the merger or consolidation. If the governing instrument does not specify the manner of authorizing a conversion of the business trust or a merger or consolidation that involves the business trust as a constituent party and does not prohibit a conversion of the business trust, the conversion shall be authorized by the approval by all of the beneficial owners and all of the trustees. When the conversion of a business trust shall have become effective, the business trust shall file a certificate of cancellation in the Office of the Secretary of State in accordance with § 3810(d) of this chapter. Unless otherwise agreed, the conversion of a business trust to an other business entity pursuant to this section shall not require such business trust to wind up its affairs under § 3808 of this chapter or pay its liabilities and distribute its assets under § 3808 of this chapter. In connection with a conversion of a business trust to an other business entity pursuant to this section, rights or securities of, or interests in, the business trust which is to be converted may be exchanged for or converted into cash, property, rights or securities of, or interests in, the other business entity into which the business trust is being converted or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of, or interests in, any other business entity.”