Corporation Law
About the Section of Corporation Law
With a membership of nearly 500 Delaware attorneys, judges and academics, the Section of Corporation Law promotes the objectives of the Delaware State Bar Association within the fields of law governing corporations and alternative business entities. Responsibility for leading the Section rests with the Section's Council and officers. The Council and the Section's Alternative Entities Subcommittee are responsible for formulating and recommending to the Delaware General Assembly, after approval by the DSBA, amendments to the Delaware General Corporation Law, the Delaware Limited Liability Company Act, the Delaware Revised Uniform Limited Partnership Act and the Delaware Revised Uniform Partnership Act. The Section also fulfills an important education function, sponsoring one or more continuing legal education programs per year.
Click here to view the Section of Corporation Law’s 2011 Annual Report.
Leadership
Chair
Norman M. Monhait
Rosenthal, Monhait & Goddess, P.A.
Vice-Chair
John F. Grossbauer
Potter Anderson & Corroon LLP
Secretary
Bruce E. Jameson
Prickett, Jones & Elliott, P.A.
Chair, Alternative Entities Subcommittee
James G. Leyden, Jr.
Richards, Layton & Finger, P. A.
Technology Liaison
J. Clayton Athey
Prickett, Jones & Elliott, P.A.
Council
Frederick H. Alexander (Immediate Past Chair)
Morris, Nichols Arsht & Tunnell LLP
Donald A. Bussard (Past Chair)
Richards, Layton & Finger, P.A.
P. Clarkson Collins, Jr.
Morris James LLP
Henry E. Gallagher
Connolly Gallagher LLP
Richard J. Geisenberger (Ex Officio Member)
Assistant Secretary of State, Delaware
Stuart M. Grant
Grant & Eisenhofer P.A.
John F. Grossbauer
Potter Anderson & Corroon LLP
Lawrence A. Hamermesh (Past Chair)
Widener University School of Law
Richard D. Heins
Ashby & Geddes, P.A.
Kurt M. Heyman
Proctor Heyman LLP
James L. Holzman (Past Chair)
Prickett, Jones & Elliott, P.A.
Bruce E. Jameson
Prickett, Jones & Elliott, P.A.
David A. Jenkins
Smith, Katzenstein & Furlow LLP
Andrew M. Johnston, III
Morris, Nichols Arsht & Tunnell LLP
Allison L. Land
Skadden, Arps, Slate, Meagher & Flom LLP
Lewis H. Lazarus
Morris James LLP
David C. McBride (Past Chair)
Young Conaway Stargatt & Taylor, LLP
Norman M. Monhait
Rosenthal, Monhait & Goddess, P.A.
Mark A. Morton
Potter Anderson & Corroon LLP
Samuel A. Nolen
Richards, Layton & Finger, P.A.
Matthew J. O'Toole
Stevens & Lee P.C.
Bruce L. Silverstein
Young Conaway Stargatt & Taylor, LLP
Edward P. Welch (Past Chair)
Skadden, Arps, Slate, Meagher & Flom LLP
2012 AMENDMENTS TO THE DELAWARE GENERAL CORPORATION LAW
AND ALTERNATIVE ENTITY STATUTES
Legislation amending the Delaware General Corporation Law became effective August 1, 2012. In addition, the Delaware legislature adopted a new procedure which will become effective on August 1, 2013, to enable a foreign corporation to be reinstated in Delaware after its qualification to do business in the State has been forfeited as a result of the resignation of its registered agent or a court order enjoining its registered agent from acting as such. The following summary of the legislation was prepared by Richards, Layton & Finger, P.A. in Wilmington, Delaware.
AMENDMENTS TO THE DGCL
Section 254 (Merger or consolidation of domestic corporation and joint-stock corporation or other association); Section 263 (Merger or consolidation of domestic corporations and partnerships); Section 265 (Conversion of other entities to a domestic corporation); and Section 267 (Merger of parent entity and subsidiary corporation or corporations). Section 254(d)(1) of the DGCL has been amended to provide that a certificate of merger effecting the merger of a domestic corporation and a joint-stock corporation or other association must now state the type of entity of each of the constituent entities to the merger. Section 263(c)(1), which governs the merger of a domestic corporation and a partnership, has been amended to require that the certificate of merger state the type of entity of each of the constituent entities to the merger. Section 265(c)(2) has been amended to require that a certificate of conversion effecting a conversion of another entity to a domestic corporation state the type of entity of the other entity converting to a domestic corporation. Section 267, which governs short-form mergers involving a parent entity other than a corporation, also has been amended to require that the certificate of ownership and merger provide the type of entity of each constituent entity to the merger.
Section 311 (Revocation of voluntary dissolution). Section 311 of the DGCL, which governs the revocation of a voluntary dissolution by a Delaware corporation, has been amended to require that the certificate of revocation of dissolution include the address of the corporation's registered office in the State of Delaware and the name of its registered agent at such address.
Section 312 (Renewal, revival, extension and restoration of certificate of incorporation). Section 312 of the DGCL sets forth the requirements for a Delaware corporation to renew or revive its existence. Section 312(d)(2) has been amended to clarify that the address of the registered office which must be stated in the certificate of renewal or revival must be stated in accordance with Section 131(c) of the DGCL.
Section 377 (Change of registered agent). Section 377 of the DGCL addresses how a foreign corporation registered to do business in the State of Delaware may change its registered agent. Sections 377(a) and 377(b) have been amended to clarify the types of entities that may serve as registered agents for foreign corporations registered to do business in the State of Delaware. Section 377(a) now refers to Section 371(b)(2)(i) of the DGCL, which provides that the registered agent may be the foreign corporation itself, an individual resident in the State of Delaware, a domestic corporation, a domestic partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership)), a domestic limited liability company, a domestic statutory trust, a foreign corporation (other than the foreign corporation itself), a foreign partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership)), a foreign limited liability company or a foreign statutory trust. Section 377(b) has been amended to change the reference from "corporation" to "entity."
Section 377 also was amended to add a new requirement for the reinstatement of a foreign corporation when such foreign corporation has been forfeited for failure to appoint a registered agent. New subsections (d) and (e) were added to Section 377 to provide that a foreign corporation whose qualification to do business has been forfeited may be reinstated if it files a certificate of reinstatement setting forth the name of the foreign corporation, the effective date of the forfeiture, and the name and address of the foreign corporation's registered agent. Upon the filing of the certificate of reinstatement, the qualification of the foreign corporation to do business in the State of Delaware is reinstated with the same force and effect as if it had not been forfeited. (These provisions become effective August 1, 2013.)
Section 381 (Withdrawal of foreign corporation from State; procedure; service of process on Secretary of State). Section 381 of the DGCL, which addresses the withdrawal of a foreign corporation from the State of Delaware, has been amended to eliminate the option of filing a certificate of dissolution issued by the proper official of the other jurisdiction as a means to effect such a withdrawal. As amended, a foreign corporation must file a certificate of withdrawal to withdraw from the State of Delaware. Section 381 also has been amended to remove the requirement that the Secretary of State of the State of Delaware (the "Secretary of State") issue a certificate of withdrawal to the agent of the withdrawing corporation, which conforms the DGCL to the Secretary of State practice of only providing such certificate to the withdrawing corporation.
Section 390 (Transfer, domestication or continuance of domestic corporations). Section 390 of the DGCL permits a Delaware corporation to transfer to a foreign jurisdiction. In connection with a transfer, a Delaware corporation files with the Secretary of State a certificate of transfer which must state, among other things, the address to which service of process may be sent to the corporation that has transferred out of the State of Delaware. Section 390(b)(5) has been amended to provide that such address cannot be the address of the corporation's registered agent without the written consent of such registered agent, which consent must be filed with the certificate of transfer.
Section 391 (Amounts payable to Secretary of State upon filing certificate or other paper). Section 391 of the DGCL, which sets forth the amounts payable to the Secretary of State in connection with the filing of certificates and other documents, has been amended to clarify that charges assessed by the Secretary of State pursuant to Section 391 are not taxes. In addition, Section 391 was amended to set forth the fee for filing a certificate of reinstatement of a foreign corporation.
AMENDMENTS TO THE DELAWARE LIMITED LIABILITY COMPANY ACT (DLLCA), THE DELAWARE REVISED UNIFORM PARTNERSHIP ACT (DRUPA) AND THE DELAWARE REVISED UNIFORM LIMITED PARTNERSHIP ACT (DRULPA) (COLLECTIVELY, THE ACTS)
Expansion of Obligations Not Subject to Defense of Usury
The Acts provide that no obligation of a partner, member or manager, as applicable, of a Delaware Alternative Entity to such Delaware Alternative Entity, arising under the partnership agreement or limited liability company agreement of such Delaware Alternative Entity or a separate agreement or writing, is subject to the defense of usury. The Acts have been amended to provide that, in addition to the foregoing, no obligation between or among partners, members and/or managers, as applicable, of a Delaware Alternative Entity, arising under the partnership agreement or limited liability company agreement of such Delaware Alternative Entity or a separate agreement or writing, is subject to the defense of usury.
General Restriction on the Word "Bank" in the Names of Delaware Alternative Entities
The Acts have been amended to confirm the practice of restricting the use of the word "bank" in the names of Delaware Alternative Entities. Excepted from this restriction are (i) banks reporting to and under the supervision of the State Bank Commissioner of the State of Delaware or a subsidiary of a bank or savings association (as such terms are defined in the Federal Deposit Insurance Act, at 12 U.S.C. § 1813), and (ii) Delaware Alternative Entities regulated under (a) the Bank Holding Company Act of 1956 (12 U.S.C. § 1841 et seq.), or (b) the Home Owners' Loan Act (12 U.S.C. § 1461 et seq.). The amendments to the Acts specifically provide that the restriction should not be construed to prevent the use of the word "bank" or any variation thereof in a context clearly not purporting to refer to a banking business or otherwise not likely to mislead the public or lead to a pattern and practice of abuse that might cause harm to the interests of the public or the State of Delaware, as determined by the Division of Corporations of the Delaware Department of State.
Effectiveness of Limited Partnership Agreements and Limited Liability Company Agreements
DRULPA has been amended to clarify that the limited partnership agreement of a Delaware LP may be made effective as of the effective time of the filing of such Delaware LP's certificate of limited partnership. Similarly, DLLCA has been amended to clarify that the limited liability company agreement of a Delaware LLC may be made effective as of the effective time of the filing of such Delaware LLC's certificate of formation.
2011 Alternative Entity Legislation
The Delaware General Assembly also enacted a series of bills to update Delaware’s alternative entity statutes. Each of the following bills was signed into law by the Governor on July 7, 2011 and became effective on August 1, 2011:
- Senate Bill No. 74 – 2011 Amendments to the Delaware Revised Uniform Partnership Act, 6 Del. C. §15-101 et seq.
- Senate Bill No. 76 – 2011 Amendments to the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq.
- Senate Bill No. 95 – 2011 Amendments to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101 et seq.
Upcoming Events of Interest
ABA Midyear Meeting
Dallas, TX
February 6 - 12, 2013
ABA Section of Business Law 2013 Spring Meeting
Hilton Washington, Washington, DC
April 4 - 6, 2013
ABA 2013 Annual Meeting
San Francisco, CA
August 8 - 13, 2013