New Business Entity Legislation in Delaware Affects Corporations, Alternative Entities and UCC
September 4, 2013
The Delaware Legislature approved a number of significant changes to the state’s General Corporation Law during this year’s 147th General Assembly, most of which became effective on August 1. Substantive changes also were made to the state’s alternative entity statutes and Uniform Commercial Code, and revisions were made to the Chancery Court Rules.
The 2013 corporation law amendments include a streamlining of the back-end merger process that eliminates the need for a stockholder meeting in certain circumstances; establishing a clearer path for ratification of certain defective corporate acts, including defective stock issuances ( changes to take effect on April 1, 2014); specifying the formation, management, and notice requirements for establishment of public benefit corporations; and changes designed to address issues identified by the Delaware Secretary of State to deter the practice of forming “shelf” corporations.
Among other changes, amendments to Delaware’s LLC and partnership statutes confirm that a charging order is the exclusive remedy by which a judgment creditor of a member or partner, or of its assignee, may satisfy a judgment out of the judgment debtor’s LLC or partnership interest, and an amendment to the Delaware LLC statute confirms that fiduciary duties not explicitly provided for in the LLC agreement may apply. The legislature also revised Article 9 of the Delaware UCC (“Delaware Article 9”) as part of a national effort to encourage the adoption of uniform revisions by all states and other US jurisdictions.
“This year Delaware enacted some very important corporate changes and clarified key provisions in its alternative entity laws,” said Matthew O’Toole, a partner at Potter, Anderson & Corroon LLP in Wilmington, Delaware, and a Senior Legal Advisor at CSC®Publishing. “These changes will continue to make Delaware the jurisdiction of choice for forming a business entity.”
Delaware Laws Governing Business Entities, Fall 2013
The Fall 2013 Edition of CSC®Publishing’s Delaware Laws Governing Business Entities captures this year’s changes, and provides statutory amendment analysis from legal experts in the state to help business and legal professionals get up to speed quickly on the new legislation.
In addition to the statutory changes, the Fall 2013 Edition contains over 45 new case annotations from Delaware state courts and from courts in other jurisdictions that apply Delaware business entity law. There are also five new full text cases in Volume 2, including In re MFW Shareholders Litigation (merger of corporations), Brinckerhoff v. Enbridge Energy Co. (indemnification by limited partnership agreement), and Carsanaro v. Bloodhound Technologies., Inc. (breach of fiduciary duty).
In addition, readers will find “Guidelines for Persons Litigating in the Court of Chancery,” a useful resource created by the Court “ensure that all attorneys are aware of the expectations of the Court and to provide helpful guidance in practicing in our Court.” Suggestions include best practices for handling in-court hearings and litigating cases before the court, touching on such issues as the role of Delaware counsel, protocols for contacting chambers, scheduling, pleadings, motions, and trial procedures.
The Fall 2013 Edition also includes these useful features:
- A Table of Sections Affected that shows at a glance where legislation has changed.
- A Table of New Annotations that provides users with a quick snapshot of new cases that apply the legislation.
- Blacklined Amendments that indicate clearly how the new legislation has changed the statutory law.
- A Table of Amounts Payable to calculate fees owed to the state.
- Court of Chancery Guidelines, which are comprehensive set of guidelines designed to provide attorneys with best practices for managing cases in Delaware’s business court.
Volume 2 features published and unpublished annotations from state and federal courts citing Delaware business entity law, as well as the full text of recent key Delaware business opinions.
Delaware Laws Governing Business Entities is available as a two-volume softbound set designed to fit in a briefcase or carry into the courtroom. In addition, electronic versions of the books are now also available for the iPad, Kindle, and other tablets, as well as some smart phones and computers.
Subscribers to the Spring and Fall Editions get access to The Delaware Business Entity Law Website at no extra cost. The website provides online access to the updated content found in Volumes 1 and 2 of Delaware Laws Governing Business Entities, as well as links to full-text opinions of cases cited in the annotations, annotated forms for Delaware business transactions, and sample bylaws and operating agreements.
In addition, the website provides advanced research tools and bookmarks that allow for fast searches, and a convenient “Notes Window” where users can record their thoughts while they research. The site also includes key Delaware business entity form documents including draft formation documents for Delaware entities. The site is intuitive and easy to navigate, and allows users to print, email and export research results.