2020 Updates to Delaware Entity
The State of Delaware typically amends its entity statutes annually to ensure that the statutes are state of the art and most effectively meet the needs of the changing business community. Consistent with this practice, Delaware’s governor recently signed into law this year’s amendments to the Delaware’s Limited Liability Company Act (the “LLC Act”), Revised Uniform Limited Partnership Act (the “LP Act”), Revised Uniform Partnership Act, General Corporation Law (the “DGCL”) and Statutory Trust Act. Unlike most years when the amendments have all gone into effect on August 1st, this year’s amendments went into effect at various times due to the COVID-19 pandemic, with the latest effective time being August 1st.
Notable amendments to the DGCL include (i) provisions to clarify and expand the emergency powers boards of Delaware corporations may invoke in the face of certain emergency conditions such as the COVID-19 pandemic, (ii) modifications to the DGCL provisions relating to exculpation and indemnification, (iii) changes to make it easier and more appealing for a corporation to become a public benefit corporation and (iv) revisions to the requirements relating to holding company mergers.
Some of the significant amendments to the remaining entity statutes include (i) confirmation that no appraisal rights are available with respect to LLCs, partnerships or statutory trusts unless contractually provided for in certain documentation, (ii) changes to the LLC Act and the LP Act to reduce the occurrence of technical pitfalls when dealing with the admission of members and limited partners, (iii) clarifications with respect to electronic signatures and record keeping and (iv) providing for the division of a Delaware statutory trust.
For a more detailed discussion of the amendments discussed above, as well as descriptions of other amendments to the Delaware entity statutes this year, please click here: 2020 Delaware Entity Statutory Amendments