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 LLC and Partnership Committee 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 2014 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, LLC and Partnership Committee
Louis G. Hering
Morris, Nichols, Arsht, & Tunnell, LLP

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 OfficioMember)
Assistant Secretary of State, Delaware

Stuart M. Grant
Grant & Eisenhofer P.A.

John F. Grossbauer
Potter Anderson & Corroon LLP

Ellisa Opstbaum Habbart
The Delaware Counsel Group, LLP

Lawrence A. Hamermesh (Past Chair)
Widener University School of Law

Richard D. Heins
Ashby & Geddes, P.A.

Kurt M. Heyman
Proctor Heyman LLP

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

2014 AMENDMENTS TO THE DELAWARE GENERAL CORPORATION LAW AND ALTERNATIVE ENTITY STATUTES

Delaware’s Legislature and Governor have approved amendments to Delaware business entity laws that the Corporation Law Section proposed.  The amendments include provisions to facilitateminor amendments to the certificate of incorporation, to facilitate and simplify the two-step merger process introduced into the Delaware General Corporation Law (“DGCL”) last year by the addition of Section 251(h), and to facilitate transaction closings by allowing directors to escrow consents for future use so long as certain requirements are met.  The amendments became effective on August 1, 2014.

AMENDMENTS TO THE DGCL

Incorporator unavailability:  Sections 103 and 108.  These amendments address issues that arise when a corporation’s incorporator has become unavailable before completing his, her or its statutory functions.  Section 103(a)(1) was amended to make immaterial the reason for the incorporator’s unavailability.  Section 108(d) was added so that if the incorporator is not available to act, any person for whom or on whose behalf the incorporator was acting may, subject to certain conditions, take any actions that the incorporator would have been entitled to take.

Escrowing director and officer consents:  Sections 141 and 228.  Certain Delaware decisions had called into question directors’ advance execution of written consents, particularly prior to the time that such persons are in fact directors.  The potential ineffectiveness of such advance consents has made more difficult the closing of transactions that may involve the execution of a significant number of documents and a careful ordering of transaction steps.  The amendments to Section 141(f) permits a person whether or not then a director to execute a consent and provide through an instruction to an agent or otherwise that the consent will be effective at a future time, including a time determined upon the occurrence of an event, not more than sixty (60) days after such instruction is given, so long as the person is then a director and the consent is revocable but not revoked prior to the time it becomes effective.  A parallel change to Section 228(c) permits any person executing a stockholder consent to provide, by instruction or otherwise, that the consent will be effective at a future time, including a time determined upon the occurrence of an event, no later than sixty (60) days after the instruction is given and, if evidence of the instruction or provision is given to the corporation, the later effective time will constitute the date of signature.  Any such stockholder consent may provide that it is revocable prior to its becoming effective.

Voting trusts:  Section 218.  Section 218 was amended to provide that a voting trust agreement may be delivered to and made available at the corporation’s principal place of business as an alternative to the prior provision requiring that the voting trust agreement be delivered to and be made available at the corporation’s registered office in Delaware.

Charter amendments:  Section 242.  Section 242 was amended to permit a corporation’s directors, without stockholder approval, to amend the certificate of incorporation to change the corporation’s name, and to delete historical provisions relating to initial incorporators, board of directors or subscribers for shares, or to previously effected changes to stock.  The amendments also eliminated the requirement that the notice of the stockholder’s meeting at which an amendment to the certificate of incorporation is to be voted on contain a copy of the amendment itself or a brief summary of the amendment when the notice constitutes a notice of internet availability of proxy materials under the Securities Exchange Act of 1934.

Mergers:  Section 251(h).  The amendments eliminated the prohibition against use of this provision in circumstances where a party to the merger agreement is “an interested stockholder” as defined in DGCL Section 203.  The requirement that the acquirer own sufficient shares to approve the offer in a long form merger following the tender offer has been clarified to provide that any shares irrevocably accepted and received by a depository will count toward that total.  The amendment also allows shares owned at the commencement of the offer by either constituent corporation or by certain affiliates to be treated differently than other shares, thus allowing those shares to be converted into shares of the surviving corporation.  The amendments also clarify that the merger agreement for a Section 251(h) transaction may permit or require the merger to be effected under Section 251(h) thereby permitting abandonment of the Section 251(h) process in favor of a merger accomplished under a different statutory provision.  An additional provision defined certain terms used in this section including “consummates” which is defined to mean the time at which the offeror irrevocably accepts for purchase or exchange stock tendered pursuant to a tender or exchange offer.  The statutory synopsis provides that the amendments do not change the fiduciary duties of directors in connection with the Section 251(h) merger or any judicial scrutiny applied to any decision to enter into a merger agreement.

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”)

Providing information to communications contact.  Every Delaware LP and Delaware LLC is required to maintain a Communications Contact who is authorized to receive communications from its registered agent.  DRULPA and the DLLCA have been amended to require a Delaware LP or Delaware LLC, upon receipt of a request by its Communications Contact, to provide to such Communications Contact the name, business address and business telephone number of a natural person who has access to the record that contains the name and last known business, residence or mailing address of each partner, member and manager of such Delaware LP or Delaware LLC.

Consents with a future effective date.  The LLC and Partnership Acts have been amended to confirm that, unless otherwise provided in a partnership agreement or limited liability company agreement, a person who is not then a partner, member or manager of a Delaware LP, Delaware GP or Delaware LLC may consent to any matter as a partner, member or manager provided that such consent will only be effective at a time when such person is a partner, member or manager of such Delaware LP, Delaware GP or Delaware LLC.

Books and records requests by agents.  The LLC and Partnership Acts have been amended to confirm that a partner or member of a Delaware LP, Delaware GP or Delaware LLC may make a books and records request in person or by an attorney or other agent.

Books and records requirements.  DRULPA and the DLLCA have been amended to require a Delaware LP or Delaware LLC to maintain a current record of the name and last known business, residence or mailing address of each partner, member and manager.

Revocation of dissolution.  DRULPA and the DLLCA have been amended to provide additional means by which a dissolution of a Delaware LP or Delaware LLC may be revoked, including to provide that a dissolution may be revoked in the manner provided in the partnership agreement of such Delaware LP or the limited liability company agreement of such Delaware LLC, and to confirm that a dissolution of a Delaware LP or Delaware LLC may be revoked by any other means permitted by law.

OTHER LEGISLATION

10 Del. C. §8106 provides a three year statute of limitations for breach of contract claims and 6 Del. C. §2-275 provides a four year statute of limitations for a breach of contract claims governed by ARTICLE II of the Delaware Uniform Commercial Code.  Under Delaware common law, parties could effect a twenty year statute of limitations period by entering into a contract under seal.  Recent legislation added subsection (c) to 10 Del. C. §8106 allowing parties to a contract in writing involving at least $100,000 to include a provision that any action could be brought on the contract for a specified period of up to twenty years from the accrual of the claim.

2014 House Legislation

Upcoming Events of Interest

ABA 2015 Annual Meeting
July 23 – August 4, 2015
Chicago, IL
Hyatt Regency Hotel

Business Law Section Spring Meeting
April 16-18, 2015
San Francisco, CA
Marriott Marquis and InterContinental San Francisco
Register Now

Business Law Section Annual Meeting
September 17-19, 2015
Chicago, IL
Hyatt Regency Chicago

Links

Delaware Department of State

Membership and Contact Information

Janice Myrick – DSBA Office