2009 Delaware LLC Act Amendments
Steven D. Goldberg, Esq.
Wilmington, DE
sgoldberg@delcorp.com
Contact me if you need assistance in forming/organizing a Delaware business entity or any matter of Delaware law.
[These Amendments were approved by the Delaware General Assembly on June 19, 2009 and signed into law by the Governor on June 23, 2009]
The 2009 Delaware Limited Liability Company Act (LLC Act) amendments will be introduced in the Delaware General Assembly shortly. Here is a black line showing the sections to be amended. 2009 LLC Amendments
Present Section 18-111 grants jurisdiction to the Court of Chancery to hear actions to “interpret, apply or enforce” the provisions of a LLC agreement or the duties and obligations of the members and managers to the LLC or the rights or powers of, or restriction on, the LLC its members or managers. The amendment broadens the reach of the section to include the authority for the court to determine those rights or powers of, or restrictions on the LLC, its member or managers under “or any provision of this chapter, or any other instrument, document, agreement or certificate contemplated by any provision of this chapter.” The amendment broadens the reach of the Section and is intended to avoid arguments that 18-111 limits the court’s jurisdiction.
The amendment to Section 18-204 is intended to clarify who, and on behalf of which entity, a certificate of merger or consolidation is to be signed.
The amendment to Section 18-209(a) clarifies the meaning of the term “other business entity” as used in Section 18-204.
Previously Section 18-209(c)(4) permitted the certificate of merger to change the name of the surviving domestic LLC. The amendment will now permit the certificate of merger to also change the registered office or registered agent.
A little understood feature of Section 18-209 is the ability within the context of a merger or consolidation to amend the LLC agreement or to adopt a new LLC agreement notwithstanding language to the contrary in the existing agreement placing limitations or special voting or consent requirements on amendments, requiring a super majority vote to amend the agreement or a prohibition on amendments. The new language contained in the amendments confirms this authority and provides that only in the case where the limitations on amendments by its terms applies in connection with a merger or consolidation will the limitation in the agreement prohibit the adoption of an amendment or new agreement in connection with a merger or consolidation.
The Section 18-302 amendment is a conforming amendment for the 18-209(f) amendment.
A recent decision of the Delaware Court of Chancery raised the legal question of whether the corporate doctrine of independent legal significance applies in the context of a LLC. The amendment to 18-1101 to add a new subsection (h) is intended to confirm that the doctrine of independent legal significance applies to LLC’s.
