CHAPTER 265
FORMERLY
SENATE BILL NO. 343
AN ACT TO AMEND CHAPTER 38 OF TITLE 12 OF THE DELAWARE CODE RELATING TO BUSINESS TRUSTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §3803, Chapter 38, Title 12 of the Delaware Code by adding a new subsection (c) thereto to read as follows:
"(c) Except to the extent otherwise provided in the governing
instrument of a business trust, an officer, employee, manager or other person acting pursuant to Section 3806(b)(7), when acting in such capacity, shall not be personally liable to any person other than the business trust or a beneficial owner for any act, omission or obligation of the business trust or any trustee thereof."
Section 2. Amend §3804(a), Chapter 38, Title 12 of the Delaware Code by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:
"(a) A business trust may sue and be sued, and service of process upon 1 of the trustees shall be sufficient. In furtherance of the foregoing, a business trust may be sued for debts and other obligations or liabilities contracted or incurred by the trustees, or by the duly authorized agents of such trustees, in the performance of their respective duties under the governing instrument of the business trust, and for any damages to persons or property resulting from the negligence of such trustees or agents acting in the performance of such respective duties. The property of a business trust shall be subject to attachment and execution as if it were a corporation, subject to §3502 of Title 10. Notwithstanding the foregoing provisions of this §3804, in the event that the governing instrument of a business trust, including a business trust which is a registered investment company under the Investment Company Act of 1940, as amended (15 U.S.C. §§80a-1 gt sig.), creates one or more series as provided in §3806(b)(2), and if separate and distinct records are maintained for any such series and the assets associated with any such series are held and accounted for separately from the other assets of the business trust, or any other series thereof, and if the governing instrument so provides, and notice of the limitation on liabilities of a series as referenced in this sentence is set forth in the certificate of trust of the business trust, then the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of the business trust generally."
Section 3. Amend §3806(a), Chapter 38, Title 12 of the Delaware Code by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a> to read as follows:
"(a) Except to the extent otherwise provided in the governing
instrument of a business trust, the business and affairs of a business trust shall be managed by or under the direction of its trustees. To the extent provided in the governing instrument of a business trust, any person (including a beneficial owner) shall be entitled to direct the trustees or other persons in the management of the business trust. Except to the extent otherwise provided in the governing instrument of a business trust, neither the power to give direction to a trustee or other persons nor the exercise thereof by any person (including a beneficial owner) shall cause such person to be a trustee."
Section 4. Amend §3806(b), Chapter 38, Title 12 of the Delaware Code by adding a new paragraph (7) thereto to read as follows:
"(7) May provide for the appointment, election or engagement, either as agents or independent contractors of the business trust or as delegatees of the trustees, of officers, employees, managers or other persons who may manage the business and affairs of the business trust and may have such titles and such relative rights, powers and duties as the governing instrument shall provide. Except to the extent otherwise provided in the governing instrument of a business trust, the trustees shall choose and supervise such officers, managers, employees and other persons."
Section 5. Amend §3806, Chapter 38, Title 12 of the Delaware Code by adding a new subsection (d) thereto to read as follows:
"(d) To the extent that, at law or in equity, an officer, employee, manager or other person designated pursuant to Section 3806(b)(7) has duties (including fiduciary duties) and liabilities relating thereto to a business trust, a beneficial owner or a trustee:
(1) Any such officer, employee, manager or other person acting under a governing instrument shall not be liable to the business trust, any beneficial owner or any trustee for such person's good faith reliance on the provisions of such governing instrument; and
(2) The duties and liabilities of an officer, employee, manager or other person acting pursuant to Section 3806(b)(7) may be expanded or restricted by provisions in a governing instrument."
Section 6. Amend §3808(a), Chapter 38, Title 12 of the Delaware Code by striking said subsection in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:
"(a) Except to the extent otherwise provided in the governing
instrument of the business trust, a business trust shall have perpetual existence, and a business trust may not be terminated or revoked by a beneficial owner or other person except in accordance with the terms of its governing instrument."
Section 7. Amend Section 3810, Chapter 38, Title 12 by deleting the title thereof and substituting in lieu thereof a new title to read as follows:
"Certificate of trust; amendment; restatement; cancellation"
Section 8. Amend Section 3810(c), Chapter 38, Title 12 of the Delaware Code by redesignating subsection (c) thereof as subsection (d) thereof and by adding a new subsection (c) thereof to read as follows:
"(c) (1) A certificate of trust may be restated by integrating into a single instrument all of the provisions of the certificate of trust which are then in effect and operative as a result of there having been theretofore filed one or more certificates of amendment pursuant to subsection (b) of this section, and the certificate of trust may be amended or further amended by the filing of a restated certificate of trust. The restated certificate of trust shall be specifically designated as such in its heading and shall set forth:
a. The present name of the business trust, and if it has been changed, the name under which the business trust was originally formed;
a. The date of filing of the original certificate of trust with the Secretary of State;
a. The information required to be included pursuant to subsection (a) of this section; and
a. Any other information the trustees determine to include therein.
(2) A certificate of trust may be restated at any time for any purpose as the trustees may determine. A trustee who becomes aware that any statement in a restated certificate of trust was false when made or that any matter described has changed making the restated certificate false in any material respect, shall promptly file a certificate of amendment or a restated certificate of trust."
Section 9. Amend §3814, Chapter 38, 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:§3814. Use of Names Regulated.
(a) The name of each business trust as set forth in its certificate of trust must be such as to distinguish it upon the records of the Office of the Secretary of State from the name of any corporation, limited partnership, business trust or limited liability company reserved,
registered, formed or organized under the laws of the State of Delaware or qualified to do business or registered as a foreign corporation, foreign limited partnership or foreign limited liability company in the State of Delaware; provided, however, that a business trust may register under any name which is not such as to distinguish it upon the records of the Office of the Secretary of State from the name of any domestic or foreign corporation, limited partnership, business trust or limited liability company reserved, registered, formed or organized under the laws of the State of Delaware with the written consent of the other corporation, limited partnership, business trust or limited liability company, which written consent shall be filed with the Secretary of State.
(b) The name of each business trust as set forth in its Certificate of Trust may contain the name of a beneficial owner, a trustee or any other person.
(c) The name of each business trust, as set forth in its Certificate of Trust, may contain the following words: "Company", "Association", "Club", "Foundation", "Fund", "Institute", "Society", "Union", "Syndicate", "Limited", or "Trust" (or abbreviations of like import).
(d) The exclusive right to the use of a name may be reserved by:
(1) Any person intending to form a business trust and to adopt that name; and
(2) Any business trust registered in this State which proposes to change its name.
(e) The reservation of a specified name shall be made by filing with the Secretary of State an application, executed by the applicant, together with a duplicate copy, which may either be a signed or conformed copy, specifying the name to be reserved and the name and address of the applicant. If the Secretary of State finds that the name is available for use by a business trust, he or she shall reserve the name for the exclusive use of the applicant for a period of 120 days. Once having so reserved a name, the same applicant may again reserve the same name for successive 120-day periods. The right to the exclusive use of a reserved name may be transferred to any other person by filing in the Office of the Secretary of State a notice of the transfer, executed by the applicant for whom the name was reserved, together with a duplicate copy, which may be either a signed or conformed copy, specifying the name to be transferred and the name and address of the transferee. The reservation of a specified name may be cancelled by filing with the Secretary of State a notice of cancellation, executed by the applicant or transferee, together with a duplicate copy, which may be either a signed or conformed copy, specifying the name reservation to be cancelled and the name and address of the applicant or transferee. Any duplicate copy filed with the Secretary of State, as required by this Subsection, shall be returned by the Secretary of State to the person who filed it or his or her representative with a notation thereon of the action taken with respect to the original copy thereof by the Secretary of State.
(f) Fees as set forth in §3813 of this Chapter shall be paid at the time of the initial reservation of any name, at the time of the renewal of any such reservation and at the time of the filing of a notice of the transfer or cancellation of any such reservation."
Approved June 27, 1994