The Delaware General Assembly enacted new legislation during the 2021 session that allows members, managers and partners (i.e. principals) of LLCs or partnerships, as the case may be, to delegate rights, powers, or duties to someone else, even if such principal has a conflict of interest. The change creates a rule different from the one applied by the Delaware Court of Chancery in Wenske v. Bluebell Creameries, Inc., which held that a principal can’t delegate their authority if they have a conflict of interest in the issue under consideration, even if the delegate is independent. The amendment became effective August 1, 2021.
Other 2021 changes to Delaware’s business entity statutes include the following:
- An amendment to the Delaware General Corporation Law clarifying stock of a corporation held by another non-corporate entity cannot be voted or used to establish a quorum if the corporation holds a majority of such other entity’s voting power or otherwise controls such other entity.
- Amendments that provide LLCs and partnerships with a safe harbor procedure to ratify acts or transactions that are void or voidable and to waive failures to comply with requirements of a governing agreement that make any acts and transactions void or voidable.
- Amendments to the LLC and partnership acts that clarify members’ and partners’ rights to obtain information.
- Amendments to provide the manner by which an LLC or limited partnership may become a statutory public benefit entity if it is not formed as such, and to require that public benefit LLCs and limited partnerships state in their governing agreements that the entity is a statutory public benefit entity and set forth the specific public benefit(s) to be promoted by the entity.
- An amendment to the Delaware Revised Uniform Partnership Act that confirms and clarifies the effect of modifications made in a statement of partnership existence or a statement of qualification and in a partnership agreement.
These and other changes are captured in the Fall 2021 Edition of Delaware Laws Governing Business Entities Annotated. In-depth analysis of the changes, as well as changes to the state’s General Corporation Law and LLC and partnership laws, are provided by CSCPublishing’s Senior Legal Advisor Matthew O’Toole and his partner Michael Maxwell of the Delaware law firm Potter, Anderson & Corroon LLP.
The Fall 2021 Edition is updated through Act Chapter 86 of the 151st General Assembly. Blackline Amendment Notes indicate clearly how legislation has changed. The Table of Sections Affected lists legislative changes, and Blackline Amendment notes in the statutory content clearly indicate the changes made. The Rules of the Court of Chancery have also been updated through August 2021.
You will find over 80 new case notes from Delaware state courts and from courts in other jurisdictions applying Delaware business entity law. We have also featured five new full text cases in Volume 2 focusing on the latest legal developments concerning board members, bankruptcy, derivative claims, the collective entity doctrine, and reverse veil-piercing. A Table of New Annotations lists added cases, and gray bars in the body of the book indicate where they have been inserted.
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 provides up-to-date information for calculating annual franchise taxes and other related entity fees, while Volume 2 contains the helpful “Guidelines for Persons Litigating in the Court of Chancery.”
The book includes online access to more than 150 forms for incorporation/formation, qualification, mergers, dissolution, and name reservation for all business entity types in Delaware via the LexisNexis Online Download Center. A listing of the forms and contact information for Delaware’s Division of Corporations can be found in the book’s appendix.
The Fall 2021 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.
Other essential resources for Delaware corporate 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—referred to in a Delaware Court of Chancery decision 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.
Co-author Matthew J. O’Toole is a partner, and co-author Robert L. Symonds, Jr. is a retired partner, 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 immediate past 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.
VOSS ON DELAWARE CONTRACT LAW
Delaware contract law frequently governs the formation, interpretation, and enforcement of high-stakes commercial agreements throughout the United States; it also underpins the nation’s predominant corporation and business entities laws.
Citing more than 2750 authorities spanning more than 100 years, Voss on Delaware Contract Law provides an unprecedented review of that immense body of law.
Transactional attorneys and litigators will benefit from easy access to thousands of thoughtfully selected and organized quotations of cases, statutes, and rules, as well as harder-to-find court orders and transcripts, covering subjects from contract interpretation to contract-related torts, remedies, and comparative law. To further streamline research, this resource contains an innovative “Contract Typology” section, which surveys authorities by type of contract, clause, and phrase, to help identify type-specific considerations and interpretations pertinent to contract drafting and dispute resolution.
“This superb treatise provides an unprecedented compilation of Delaware’s vast contract-related jurisprudence. Practitioners and jurists will benefit from this comprehensive, expert analysis of the fundamental contract principles that have helped to make Delaware the forum of choice for business formations and transactions.” —Randy J. Holland, Retired Justice, Delaware Supreme Court.
To learn more about Delaware Laws Governing Business Entities Annotated, Symonds & O’Toole on Delaware Limited Liability Companies, and Voss on Delaware Contract Law, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.
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