SB 275

Abstract

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 Section 18-101(9) of the Act to confirm that any registered series or protected series of a limited liability company is bound by the limited liability company agreement of such limited liability company regardless of whether the series executed the limited liability company agreement. This amendment is not intended to imply that other references to “limited liability company” in the Act do not include protected series or registered series thereof (to the extent required by the context). This section also amends Section 18-101(9) of the Act to insert a new clause c. to confirm that a limited liability company agreement may include or incorporate multiple documents that may govern the business or affairs of the limited liability company or any of its series. Section 2. This section amends Section 18-109(b) of the Act to provide that when service of process is being effected on a manager or liquidating trustee of a limited liability company, the Prothonotary or the Register in Chancery of the court in which the civil action or proceeding is pending shall address the required copies and statements to the manager or liquidating trustee of the limited liability company at the principal place of business of the limited liability company (if such address is known) and to the manager’s or liquidating trustee’s address last known to the party desiring to make such service. Section 3. This section amends Section 18-113(b) to confirm that a signature on a certificate of limited liability company interest may be a manual, facsimile, or electronic signature. Section 4. This section amends Section 18-204(d) of the Act to clarify that the execution of a certificate by a person who is authorized by the Act to execute such certificate constitutes an oath or affirmation that, to the best of such person’s knowledge and belief, the facts stated therein shall be true at the time such certificate becomes effective, not at the time such certificate is executed. Section 5. This section amends Section 18-212(g) of the Act to provide that the approval of a limited liability company domestication in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the non-United States entity and the conduct of its business or by applicable non-Delaware law, as appropriate, and the approval of the limited liability company agreement by the same authorization required to approve the domestication, are required to occur prior to the time a certificate of limited liability company domestication becomes effective. Section 6. This section amends Section 18-214(h) of the Act to provide that the approval of a conversion to a limited liability company 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 entity and the conduct of its business or by applicable law, as appropriate, and the approval of the limited liability company agreement by the same authorization required to approve the conversion, are required to occur prior to the time a certificate of conversion to limited liability company becomes effective. Section 7. This section amends Section 18-1108(b) of the Act to make conforming changes. Section 8. This section amends Section 18-1109 of the Act to (i) clarify the effect of the filing of a certificate of revival of limited liability company on any protected series of such limited liability company that are not, at the time of such filing, otherwise terminated and wound up and any registered series of such limited liability company whose certificates of registered series are not, at the time of such filing, otherwise cancelled, and (ii) make other conforming changes. Section 9. This section provides that the proposed amendments to the Act shall become effective August 1, 2022.