2013 Amendments to Delaware’s General Corporation Law and Alternative Entity Statutes
Louis Hering, Morris Nichols Commercial Law Counseling Group partner, and Melissa DiVincenzo, Morris Nichols Delaware Corporate Law Counseling Group partner, co-authored 2013 Amendments to Delaware's General Corporation Law and Alternative Entity Statutes appearing in the July 19, 2013 edition of Corporate Accountability Report, a publication of Bloomberg BNA.
The article highlights amendments enacted by the Delaware legislature to the General Corporation Law and to three of Delaware's four "alternative entity" statutes - the Delaware Limited Liability Company Act (â€˜â€˜DLLCA’’), the Delaware Revised Uniform Limited Partnership Act (â€˜â€˜DRULPA’’) and the Delaware Revised Uniform Partnership Act (â€˜â€˜DRUPA’’). The amendments will become effective on August 1, 2013.
The significant amendments to the DGCL include creation of a new procedure to enable corporations to ratify defective corporate acts, granting the Delaware Court of Chancery jurisdiction to validate defective corporate acts through a specific court procedure, providing for a second-step merger following a tender offer without a stockholder vote if certain conditions are satisfied and adoption of a new “Public Benefit Corporation Subchapter.”
The significant amendments to the alternative entity statutes include confirmation that default fiduciary duties apply to Delaware limited liability companies, that the provisions of the DLLCA apply whether a limited liability company has one member or more than one member, that a charging order is the sole remedy by which a judgment creditor of a member or partner may satisfy a judgment out of the judgment debtor’s interest in the entity and that in connection with a domestication, transfer, continuance or conversion, interests in an entity that is domesticating or converting to a partnership or limited liability company and interests in a partnership or limited liability company that is transferring to, domesticating or continuing in another jurisdiction or converting to a different type of entity or other jurisdiction, may remain outstanding in connection with such domestication, transfer, continuance or conversion.
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Published by The Bureau of National Affairs, Inc., in Washington, D.C., Corporate Accountability Report helps corporate lawyers stay alert to the full range of developments affecting corporate practice.