Synopsis
This bill continues the practice of amending periodically the Delaware Limited Liability Company Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act. Section 1. This section amends Section 18-101 of the Act to include definitions for “document” and “electronic transmission,” and to amend the definitions of “manager” and “member.” The terms “document” and “electronic transmission” appear in new Section 18-113 among other places in the Act. The changes to the definition of “manager” confirm that the term includes a manager of the limited liability company generally and a manager associated with a series of the limited liability company, and the changes to the definition of “member” confirm that the term includes a member of the limited liability company generally and a member associated with a series of the limited liability company. Section 2. This section amends Section 18-102(3) of the Act to provide that the name of a limited liability company must be such as to distinguish it from the name of any registered series of a limited partnership formed under the laws of the State of Delaware. Section 3. This section amends Section 18-104(d) of the Act to provide that if a limited liability company’s certificate of formation has been cancelled pursuant to Section 18-1108 of the Act, its registered agent may resign without appointing a successor registered agent. The amendment also adds requirements regarding the content and form of the certificate of resignation filed with the Delaware Secretary of State when the registered agent resigns without appointing a successor, and provides that such information regarding the communications contact that must be included in such a certificate shall not be deemed public. This section also amends Section 18-104(g) to conform with the addition of the defined term “electronic transmission” in Section 18-101. Section 4. This section adds new Section 18-113 of the Act, which establishes non-exclusive, safe harbor methods to reduce certain acts or transactions to a written or electronic document and to sign and deliver a document manually or electronically. The terminology in Section 18-113(a) is based on analogous provisions in existing Sections 18-302(d) and 18-404(d) of the Act, the Delaware Uniform Electronic Transactions Act (“UETA”), and the Model Business Corporation Act, with modifications. Section 18-113(a) permits limited liability company transactions (such as entering into agreements of merger not filed with the Secretary of State) to be documented, signed and delivered through “Docusign” and similar electronic means. The Section 18-113(a) safe harbor provisions apply solely for purposes of determining whether an act or transaction has been documented, and whether a document has been signed and delivered, in accordance with the Act and the limited liability company agreement. Section 18-113(a) does not preempt any statute of frauds or other law that might require actions be documented, or that documents be signed and delivered, in a specified manner. Section 18-113(a) clarifies how its provisions operate in connection with a transaction conducted pursuant to UETA. To the extent UETA does not apply to a transaction (under Section 12A-103 of UETA) because the transaction is governed by the Act, the parties to the transaction can satisfy the Act by complying with Section 18-113(a). Section 18-113(b) addresses certain actions and documents that are not governed by Section 18-113(a). There is no presumption that these excluded items are prohibited from being effected by electronic or other means, but Section 18-113 may not be relied on as a basis for documenting an act or transaction, or signing or delivering a document, if the exclusions set forth in Section 18-113(b) apply. Certain of these excluded items are governed by separate provisions that facilitate the use of elec