Examining the 2015 Amendments to Delaware’s General Corporation Law and Alternative Entity Statutes
In its last session, the Delaware legislature passed a number of amendments to the Delaware General Corporation Law (“DGCL”) and to three of Delaware’s four “alternative entity” statutes—the Delaware Limited Liability Company Act (“DLLCA”), the Delaware Revised Uniform Limited Partnership Act (“DRULPA”) and the Delaware Revised Uniform Partnership Act (“DRUPA”). Gov. Jack Markell signed the bill into law June 24, 2015. Except as otherwise noted, all of the amendments are effective as of Aug. 1, 2015.
The amendments to the DGCL effect a broad array of substantive, technical, and clarifying changes. Among other changes discussed in greater depth below, the amendments (1) prohibit “fee shifting” provisions in the certificate of incorporation or bylaws of Delaware stock corporations, (2) authorize forum selection provisions in the certificate of incorporation and bylaws, (3) clarify the power of the board to issue stock within prescribed parameters, (4) clarify and refine the procedures for statutory ratification under Section 204, and (5) remove obstacles to the adoption of “public benefit” status.
The amendments to the alternative entity statutes include several important changes. They eliminate, generally on a prospective basis, the class or group default voting in the DLLCA and DRULPA, which had applied to mergers, conversions, domestications, dissolutions and a number of other significant actions. They also confirm that the same rules governing irrevocability apply to a proxy as apply to a power of attorney and confirm that a delegation by a general partner or a manager is irrevocable if it states that it is irrevocable.
Click here to read the full article which discusses the amendments to the DGCL and the amendments to the alternative entity statutes, each in turn.
# # #
Melissa A. DiVincenzo, Louis G. Hering, and Jason S. Tyler, “Examining the 2015 Amendments to Delaware’s General Corporation Law and Alternative Entity Statutes,” Corporate Accountability Report, Bloomberg BNA, Vol. 13, No. 30 (July 24, 2015)
Read more from Morris Nichols on related topics: