CSC Publishing: 2018 Delaware Laws Governing Business Entities

Delaware’s General Assembly enacts significant changes to the state’s LLC Act

Delaware legislators approved important changes to the State’s business entity laws during its 2018 session. Many of the changes became effective on August 1, 2018, while others will take effect in August 2019.

Among the amended provisions of the Delaware Limited Liability Company Act are those concerning limited liability company names, registered agents, the use of electronic networks or databases by limited liability companies, judicial cancellation of certificates of formation, series, division of limited liability companies, and formation of statutory public benefit limited liability companies.

The 2018 amendments substantially revise the statute’s treatment of series LLCs (effective August 1, 2019) by clarifying what constitutes a series and introduces the “protected series” and the “registered series.” The changes also confirm the applicability of certain provisions of the Delaware Uniform Commercial Code (UCC) to a series.

These and other changes are captured in the Fall 2018 edition of Delaware Laws Governing Business Entities. In-depth analysis of the changes, as well as changes to the state’s General Corporation Law and partnership laws, are provided by CSCPublishing’s Senior Legal Advisors Matthew O’Toole and Robert Symonds, attorneys in the Delaware firm Potter, Anderson & Corroon LLP.

Fall 2018

The Fall 2018 Edition of Delaware Laws Governing Business Entities is updated through Chapter 362 of the 149^th General Assembly, with over 45 newly enacted or amended sections, including the new chapter on Transparency and Sustainability Standards by Delaware Business Entities. The Rules of the Court of Chancery have been updated through August 5, 2018. The Table of Sections Affected provides an overview of legislative changes, while Blackline Amendment notes indicate changes to the law.

Also included are over 80 new case notes from Delaware state courts and from courts in other jurisdictions applying Delaware business entity law, as well as six new full text cases in Volume 2, focusing on the latest legal developments concerning breach of fiduciary duty, consent right, demand futility, first-step tender offers, and squeeze-out mergers. A Table of New Annotations lists added cases, and gray bars in the body of the book indicate where they have been inserted.

Update on Delaware appraisal proceedings

In the Spring 2018 Edition, special commentary by Delaware attorneys Christopher N. Kelly and Ryan M. Murphy of Potter Anderson & Corroon LLP discussed how balance had been restored to Delaware appraisal proceedings by, among other things, the Delaware Supreme Court’s decisions last year in DFC Global Corp. v. Muirfield Value Partners, L.P. and Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd.

Mr. Kelly updates the Special Commentary in this Fall edition, providing analysis of four post-Dell decisions by the Court of Chancery that have relied on the deal price or stock market price either exclusively or to bound a DCF valuation in determining fair value.

“The market almost always will have a say in appraisals of stock in publicly traded companies, and arbitrageurs no longer can buy in to a public company following the announcement of its sale and expect to secure a fair value award far above the merger price by proffering a DCF valuation employing questionable financial projections and assumptions,” Mr. Kelly notes in the commentary.

A comprehensive resource

CSCPublishing releases Delaware Laws Governing Business Entities—its flagship publication—twice a year to ensure that practitioners are working with the most up-to-date statutory information and have access to the very latest case law. Unique features such as the legislative analysis and special commentary in this Fall edition provide additional resources and valuable insight for legal professionals working with Delaware entities.

A comprehensive fee table in Volume 1 helps businesses calculate annual franchise taxes and other related entity fees, while Volume 2 contains the helpful “Guidelines for Persons Litigating in the Court of Chancery.” There is also a companion CD-ROM with more than 150 forms related to business law in Delaware.

The Fall 2018 Edition of Delaware Laws Governing Business Entities is available as a two-volume softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.

Another essential resource for Delaware business entity law:

Symonds & O’Toole on Delaware Limited Liability Companies, Second Edition

More Delaware limited liability companies are formed each year than any other Delaware business entity. Symonds & O’Toole on Delaware Limited Liability Companies—cited by the Delaware Court of Chancery as “the leading Delaware LLC treatise”—offers workable solutions for even the most complex transactions and practical insight into case law interpreting the statute, to help practitioners provide the best possible representation and advice to clients looking to make the most of their Delaware LLCs.

The 2018 release includes full text and in-depth analysis of 2017 amendments to the Delaware Limited Liability Company Act, including amendments regarding:

• Distinction between domestic limited liability companies and foreign limited liability companies
• Substantial compliance standard related to formation
• Type of business or entity that may be involved in fundamental transactions
• Delegation of rights, powers and duties to manage and control the business and affairs of a Delaware limited liability company

The release also examines recent case law developments, including decisions addressing:

• Interpretation and enforcement of LLC agreements
• Information access rights
• Removal of managers
• Personal jurisdiction
• Fiduciary duties
• Indemnification and advancement
• Dissolution and winding up

The table setting forth the statute’s “Default Rules” has been updated, as well as the Table of Cases, Table of Statutes, and Index.

Authors Robert L. Symonds, Jr. and Matthew J. O’Toole, are partners at Potter Anderson & Corroon LLP in Wilmington, Delaware. Mr. Symonds is one of the original drafters of the Delaware Limited Liability Company Act.  Mr. O’Toole is the current chair, and Mr. Symonds is a former chair, of the Delaware State Bar Association committee responsible for proposing amendments to that statute and to Delaware’s limited partnership and general partnership laws.

 To learn more about the Spring 2018 Edition of Delaware Laws Governing Business Entities and Symonds & O’Toole on Delaware Limited Liability Companies, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.