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Amendments to DGCL and LLC Act Signed into Law
Practical Law Legal Update 1-532-5296 (Approx. 4 pages)
Amendments to DGCL and LLC Act Signed into Law
by Practical Law Corporate & Securities
| Published on 10 Jul 2013 • Delaware, USA (National/Federal) |
The amendments to the DGCL and the Limited Liability Company Act (LLC Act) proposed in March 2013 have been signed into law.
On June 30, 2013, the amendments to the DGCL and Limited Liability Company Act (LLC Act) previously proposed in March 2013 were signed into law by the governor of Delaware. The DGCL amendments, most of which will be effective on August 1, 2013, will in part:
- Remove the stockholder-approval requirement for second-step mergers following qualifying tender offers.
- Provide a safe harbor procedure for ratifying corporate acts or transactions and stock that would otherwise be void or voidable due to a "failure of authorization."
- Deter the formation of "shelf" corporations with no stockholders or directors with the intent of renewing or "aging" the entity for use several years in the future.
- Authorize the creation of public benefit companies (Governor's signature expected July 17).
The amendments to the LLC Act confirm, among other things, that fiduciary duties apply by default even if they are not explicitly provided for in the LLC agreement. The parties can still waive or modify fiduciary duties in the LLC agreement under the amended statute. This amendment is effective August 1, 2013.
For the full text of the amendments to the DGCL, see DGCL Amendments and Public Benefit Corporation Provisions.
For the full text of the amendments to the LLC Act, see LLC Act Amendments.
For a more detailed discussion of the amendments, see Legal Update, Proposed Changes to Delaware Law: No More Top-up Options and Default Fiduciary Duties for LLC Managers.