SB 98

Abstract

This Act continues the practice of amending periodically the Delaware Limited Liability Company Act (“LLC Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of proposed amendments to the LLC Act. Section 1 amends § 18-104(e) of the LLC Act, which addresses certain duties of a registered agent of a limited liability company. Amended § 18-104(e) specifies that a registered agent may not perform its duties or functions solely through the use of a virtual office, the retention by the agent of a mail forwarding service, or both. Amended § 18-104(e) defines “virtual office” as the performance of duties or functions solely through the internet or solely through other means of remote communication. Section 2 amends § 18-106(e) of the LLC Act to provide that § 18-106(e) applies to ratification or waiver of a void or voidable act or transaction by any member, manager, or other person in respect of a limited liability company, in addition to acts or transactions by a limited liability company. This Section also amends § 18-106(e) to provide that ratification or waiver pursuant to § 18-106(e) may be express or implied, including by the statements, action, inaction, or acquiescence of or by the members, managers, or other persons. Further, this Section amends § 18-106(e) to clarify that in a circumstance in which § 18-106(e) requires notice of the ratification or waiver to be given, the giving of the notice is not a condition to the effectiveness of the ratification or waiver. The amendments to § 18-106(e) in this Section are intended to provide rules different from the rules applied in existing case law that § 18-106(e) is limited to ratification or waiver of a limited liability company’s own acts and transactions and that § 18-106(e) does not apply to ratification or waiver by conduct. Section 3 amends § 18-203(b) of the LLC Act to confirm that, in addition to correcting a certificate of cancellation, a certificate of correction may nullify a certificate of cancellation. Section 4 amends § 18-209(c) of the LLC Act to provide that a certificate of formation must be attached to a certificate of consolidation for a consolidation in which the resulting entity from such consolidation is a domestic limited liability company. Section 5 amends § 18-211(a) of the LLC Act, which provides for the correction of certificates filed with the Secretary of State. The amendment confirms that, in addition to correcting a previously filed certificate, a certificate of correction may nullify a previously filed certificate by specifying the inaccuracy or defect with respect to such previously filed certificate and providing that the previously filed certificate is nullified. Such a provision is sufficient if it states that the previously filed certificate is nullified or void or uses words of similar meaning. Section 6 amends § 18-302 of the LLC Act to confirm that a limited liability company agreement may be amended in connection with a division of a limited liability company and a merger of registered series of a limited liability company, as is specifically contemplated by §§ 18-217(f) and 18-221(e) of the LLC Act, respectively. Section 7 amends § 18-1107(c) of the LLC Act to confirm that when the existence of a domestic limited liability company or registered series, or the registration of a foreign limited liability company, will cease by the filing of a certificate under the LLC Act, the full amount of the annual tax for the calendar year in which such certificate becomes effective is due and payable before the filing of such certificate. Section 8 provides that the amendments to the LLC Act take effect on August 1, 2025.