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UCC & Corporate Due Diligence

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Delaware Legislation

July 15, 2019 Legislation

The following updates to Delaware legislation are effective August 1, 2019.

SB 88 – Chapter 48
Amends the General Corporation Law (GCL), adding new provisions relating to documentation of transactions, the execution, and delivery of paper/electronic documents. Revisions were made to default provisions applicable to stockholder notices and updates to provisions governing notices of appraisal rights and stockholder consents delivered by electronic transmission, clarifies when a unanimous consent of directors in lieu of a meeting becomes effective, and other changes to incorporator consents and resignation of registered agent for a void corporation.

SB 89 – Chapter 47
Amends the Revised Uniform Limited Partnership Act (RULPA). A new Section 17-221 permits the creation of an additional type of series known as a “registered series” which is an association formed by the filing of a certificate of registered series that meets the requirements to be “registered organizations” under the Uniform Commercial Code (UCC) for use in secured lending transactions.

A series formed under Section 17-218(b) will be known as a “protected series” which is not required to register with the Secretary of State. The registered series name must begin with the name of the applicable LP and sufficiently distinguish itself from the name of any other entity or registered series formed or qualified to do business in Delaware.

A Registered series may merge or be consolidated with other registered series, and the Secretary of State can issue certificates of good standing and certificates of existence which will incur an annual fee of $75.00 per registered series. A protected series may convert to a registered series.

New Section 17-220 enables LPs to divide into one or more newly formed LPs with the dividing partnership continuing or terminating its existence. Subchapter XII of the act provides for the formation of statutory public benefit limited partnerships which are intended to produce a public benefit and to operate in a responsible and sustainable manner.

SB 90 – Chapter 46
Amends the Revised Uniform Partnership Act (RUPA) with respect to definitions and safe harbor methods for documents/electronic transmissions, to authorize use of networks of electronic database, and to permit resignation by a registered agent even if a partnership’s statement of partnership existence was cancelled or statement of qualification revoked.

SB 91 – Chapter 45
Amends the Limited Liability Company Act to include additional provisions related to electronic forms of documents and electronic transmissions which are the equivalent of a written document and an electronic signature may be used whenever a signature is required.

Contractual appraisal rights may be available in connection with mergers or consolidations in which a registered series is a constituent party, any division, any conversion of a protected series to a registered series or any conversion of a registered series to a protected series. The certificate of formation or certificate of registered series shall be amended, corrected, or restated upon the filing of a certificate of amendment (or judicial decree of amendment), certificate of correction, corrected certificate or restated certificate, and confirms that a certificate of registered series is canceled upon a certificate of conversion of a registered series to protected series becoming effective. A registered agent may resign without appointment of a successor even if the LLC’s certificate of formation was cancelled.

SB 180
Requires proposed names to be distinguishable from the names of registered series of series LLCs.

Senate Bill 181 – Chapter 355
Amended the Revised Uniform Partnership Act to require the name of a partnership to distinguish from the name of any registered series of a series LLC.

SB 182 – Chapter 356
Amends the Revised Uniform Limited Partnership Act (RULPA) allowing for the use of blockchain and distributed ledger technologies in the maintenance of records of LPs. Proposed LP names must be distinguishable from the names of registered series of series LLCs.

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