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Statutory Updates & Filing Office News
Gov. Jack Markell signed bills passed by the General Assembly amending the Delaware business entity statutes with the intention to maintain their national preeminence. The General Corporation Law was amended by House Bill 341 (Chapter 253) signed May 3 and effective August 1 and by HB 375 (Chapter 290) signed June 10 and effective August 2. HB 372 (Chapter 287) signed June 10 amends the Limited Liability Company Act effective August 2. HB 373 (Chapter 288) amends the Revised Uniform Limited Partnership Act, and HB 374 (Chapter 289) amends the Revised Uniform Partnership Act, both effective August 2
HB 341 makes consistent the GCL’s application to nonstock corporations organized for profit or not-for-profit either with a charitable purpose or a non-charitable purpose. GCL Section 114 sets forth which provisions apply to nonstock corporations generally and which provisions apply to non-profit nonstock corporations specifically. Among other changes: (i) nonstock corporations will be expressly required to have members; (ii) nonstock corporations may effect a short-form merger with a subsidiary corporation, so long as the parent nonstock corporation is the survivor and the merger would not impair the charitable status of a charitable nonstock corporation; and (iii) approval of mergers of domestic nonstock corporations where there are no members entitled to vote on the merger other than members of the governing body may be obtained at a single meeting by vote of a majority of the total number of members of the governing body.
HB 375 adds new GCL Section 267 allowing a short-form merger of a subsidiary corporation and a parent non-corporate entity with 90% ownership, but Section 267 will not apply to nonstock corporations. Section 132(b) confirms that requirements to provide and update the “communication contact” to the corporation’s registered agent apply to both domestic and foreign corporations in Delaware. Section 145 (d) is clarified that the decision to indemnify a present or former director, officer, employee or agent is made by one of four specified decision making bodies of the corporation providing the indemnification. Section 145(e) clarifies advancement of expenses to present officers and directors of corporation and further that expenses may be advanced upon such terms and conditions as the corporation deems appropriate. A certificate of dissolution filed under Section 274 or 275(d) must contain the date of filing of the original certificate of incorporation. Also, in a merger, the certificate of incorporation of the surviving corporation may be amended and restated in its entirety. http://www.legis.delaware.gov/LIS/lis145.nsf/vwLegislation/HB+375/$file/legis.html?open
Amendments to the Alternative Entity Statutes (LLC, RULPA, and RUPA) provide that governing agreements are not subject to any statute of frauds; clarify that alternative entities have authority to grant, hold or exercise a power of attorney including an irrevocable power of attorney; ensure consistency with the DGCL provisions permitting a non-corporate parent to effect a short-form merger; clarify that the time period for responding to information demands may be varied by the governing agreement but not longer than 30 days; require foreign entities qualifying in Delaware to file a certificate of existence issued from their domestic jurisdiction within 6 months of qualification; and confirm circumstances for an assignee to become a partner or member.
HB 372 Limited Liability Company Act
HB 373 Revised Uniform Limited Partnership Act
HB374 Revised Uniform Partnership Act
In addition, Senate Bill 302 passed by the House June 30 after approval by the governor will amend the Statutory Trust Act effective August 2.
Senate Bill 386 (Act 70) signed by governor and effective June 1 deleted a Secretary of State special fee of $1.00 to provide a written response to a question for a correct corporate name, agent for service of process, or officer names.
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