In accordance with its annual tradition of updating its business entity laws, the Delaware legislature has passed Senate Bills 113, 112 and 115. On July 17, 2023, Governor Carney signed the bills. They generally take effect on August 1, 2023. Let’s examine some of the key changes to the partnership and LLC laws that these bills make.
(Note: Senate Bill No. 113 amends Chapter 18, Title 6 of the Delaware Code, Sections 18-101 to 18-1208 (the Delaware Limited Liability Company Act). Senate Bill No. 112 amends Chapter 17, Title 6, Sections 17-101 to 17-1208 of the Delaware Code (the Delaware Revised Uniform Limited Partnership Act). Senate Bill No. 115 amends Chapter 15, Title 6, Sections 15-101 to 15-1210 of the Delaware Code (the Delaware Revised Uniform Partnership Act). The citations in these sections refer to these Code provisions.)
Certificates of Division-Amendment
Sections 18-217 and 17-220 currently include procedures for filing a certificate of division if a domestic limited liability company or a domestic limited partnership divide. The sections are amended to include amendment provisions to the certificate of division. A certificate of division may be amended to change the name or business address of the listed division contact or to change certain required information. Content and execution requirements for a certificate of amendment of certificate of division are set. Mandatory amendment requirements are also included when there is knowledge of false information in a certificate of division or changes in required information. The expiration of a 6-year period after the division’s effective date ends certain updating requirements.
Amendments to Sections 18-1107 and 17-1109 add the filing of required certificate amendments of certificates of division in provisions relating to the issuance of certificates of good standing.
Sections 18-1105 and 17-1107 are amended to set a filing fee for a certificate of amendment of a certificate of division. ($180 for domestic limited liability companies, $200 for domestic limited partnerships.)
If you’d like to work with a team that can handle your corporate filings, corporate dissolutions and more, head on over to our Corporate Services page.
Revocation of Dissolution or Termination
Sections 17-806 and 18-806 include provisions for revocation of dissolution for domestic limited partnerships and domestic limited liability companies before filing a certificate of cancellation in the Office of the Secretary of State. Sections 18-218(f) and 17-221 (f) are added to include provisions for registered series. Revocation of dissolution is permitted before filing a certificate of cancellation of the registered series in the Office of the Secretary of State, provided certain requirements are satisfied. If a registered series is dissolved by the dissolution of the limited liability company/limited partnership, the dissolution of the registered series will be automatically revoked upon any revocation of the certificate of dissolution of the limited liability company/limited partnership (subject to certain conditions).
Section 18-215(d) and17-218 (d) are added to provide for revocation of termination of a protected series. In addition to the set revocation provisions, the termination of a protected series of a limited liability company/limited partnership will be subject to automatic revocation if there has been a revocation of dissolution of the limited liability company/limited partnership (subject to certain conditions).
Irrevocability of Subscription
Sections 18-506, 17-506, and 15-208 are added to provide that for all purposes of Delaware law, a subscription for a limited liability company interest/partnership interest, whether submitted in writing, by means of electronic transmission or as otherwise permitted by applicable law, is irrevocable if the subscription states that it is irrevocable to the extent provided by the subscription’s terms.
Merger or Consolidation
Sections 18-209(f), 17-211(g), and 15-902(g) are amended to provide that an agreement of merger or consolidation or an approved plan of merger may (1) effect any amendment to the limited liability company/partnership agreement or (2) effect the adoption of a new limited liability company/partnership agreement, in either case, for a limited liability company/limited partnership/domestic partnership if it is the surviving or resulting limited liability company/limited partnership/partnership in the merger or consolidation. This amendment demonstrates the authority for these surviving entities to amend their agreements upon a merger or consolidation.
Other Amendments Only Related to Senate Bill No. 115
“Foreign partnership” is added to the definitions in Section 15-101. “Foreign partnership" means a partnership that is formed outside the laws of Delaware. Foreign “limited liability" partnership is added to the annual reports provision in Section 15-1003(b) to clarify that this provision applies to foreign limited liability partnerships.
Links to bills in this section:
- Senate Bill No. 113 (limited liability companies)
- Senate Bill No. 112 (limited partnerships)
- Senate Bill No. 115 (domestic partnerships and foreign limited liability partnerships)
Delaware has also amended its General Corporation Law. For more information, please see our article Delaware Business Law Changes Part 1: Delaware General Corporation Law.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.