State of Delaware Entity Statute Update
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, this year’s amendments to Delaware’s Limited Liability Company Act (the “LLC Act”), Revised Uniform Limited Partnership Act (the “LP Act”), Revised Uniform Partnership Act and General Corporation Law went into effect on August 1, 2019.
Notably, the amendments to each of Delaware’s entity statutes establish non-exclusive, safe harbor methods to reduce certain acts or transactions to electronic documents and allow for documents to be signed and delivered electronically. The amendments confirm that Delaware entities can execute and deliver documents using “Docusign” and other similar electronic services.
There were significant amendments this year to the LP Act and most of them were substantially similar to the 2018 amendments to the LLC Act. The 2018 and 2019 amendments to the LLC Act and LP Act (i) allow Delaware LLCs and LPs to divide into two or more LLCs/LPs, as applicable, (ii) provide for the creation of a new type of series of an LLC or LP called a “registered series” that allows for a series to be formed and have a public record of its existence by doing a filing with the Delaware Secretary of State, and (iii) provide for the creation of statutory public benefit LLCs and LPs.
For a more detailed discussion of the amendments discussed above, as well as descriptions of other amendments that went into effect on August 1st, please click here.