United States: Amendments to Delaware Corporation Laws
Recent amendments have been made to the Delaware General Corporation Law (DGCL), the Delaware Limited Liability Company Act (DLLCA), the Delaware Revised Uniform Limited Partnership Act (DRULPA), and the Delaware Revised Uniform Partnership Act (DRUPA).
The new rules took effect on 1 August 2019. The primary changes include the following:
Electronically documented transactions
A recent amendment to the Delaware General Corporation Law (DGCL) permits transactions to be documented, signed and delivered electronically through the use of DocuSign. This applies to transactions regarding merger agreements, voting agreements, stockholder agreements, limited liability company agreements, partnership agreements and more.
Notices of corporate action
Corporations are now permitted to send notices to stockholders via email. Previously, a stockholder was required to consent to the receipt of notice by electronic transmission in order for the notice to be effective. According to the new provisions, notices given by email must include a legend expressing that the communication is an important notice regarding the corporation.
To facilitate greater flexibility in business transactions, the Delaware Revised Uniform Limited Partnership Act (DRUPA) has been amended to allow for the division of a limited partnership into two or more limited partnerships.
The amendment also stipulates that, in order to facilitate secured financing transactions through limited partnerships, a limited partnership may create a registered series. A registered series will qualify as a registered organization under the Uniform Commercial Code (UCC) and will be subject to provisions regarding security interests. Registered series will also be able to obtain certificates of good standing from the Delaware Secretary of State.
Resignation of registered agent
According the new provisions, registered agents of Delaware corporations now have the ability to resign without appointing a successor. This includes circumstances where any such entity has become void for failure to pay franchise taxes and annual fees.
To resign, a registered agent must give the entity at least 30 days’ notice before filing a certificate of resignation with the Delaware Secretary of State.