2010 Delaware General Corporation Law (DGCL) Amendments Adopted
Steven D. Goldberg, Esq.
Wilmington, DE
sgoldberg@stevendgoldberg.com
http://www.stevendgoldberg.com
Contact me if you need assistance in forming/organizing a Delaware business entity or any matter of Delaware law.
On June 10, 2010, Delaware’s Governor signed into law the 2010 Amendments to the DGCL . the Bill HB 375 2010 DGCL Amendments as introduced was amended once House Amendment. The new Amendments become effective on August 2, 2010 generally, however Sections 16-17 of the Bill, as amended, will be effective as to transactions consummated pursuant to agreements entered into after August 1, 2010.
The DGCL Amendments were largely technical amendments. Provisions were added at the request of the Secretary of State to deal with issues in its office dealing with service of process, a clarification that in a merger the certificate of incorporation of the surviving corporation may be amended or restated in its entirety and that the “good standing” certificate filed in connection with a foreign qualification must have been issued within 6 months of the filing.
A major feature of the Amendments is the corporate half of the LLC amendments permitting short form mergers between a LLC parent and a corporate subsidiary.
Sections 1-3 and 16-17 amend Sections 104, 111(a)(6), 114(b)(2), 262(b)(3) and 262(d)(2) to reflect the addition of the new short form LLC/corporate merger Section 267.
Section 4 clarifies that both domestic and qualified foreign corporations must have a Delaware registered agent.
Section 5 amends Section 145(d) to clarify that the determination to indemnify must be made by the specified decision making bodies.
Section 5 amends Section 145(e), The first sentence was amended to reflect that it applies to current officers and directors of the corporation and not to other persons seeking indemnification and further clarifies that advancements may be given to persons serving in an official capacity at another entity may be indemnified:
(e) Expenses (including attorneys‘’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
Section 7 amends Section 242(b) to clarify that the decision to include a copy or a summary of a proposed amendment to the Certificate in a notice of stockholders meeting need not be approved by the Board.
Sections 8, 10-11, 14, 18 and 20 amend Sections 251(b)(3), 251(c)(4), 252(c)(4), 254(d)(4), 263(c)(4) and 264(c)(4) to clarify that the Certificate of the surviving corporation in a merger may be amended or restated in its entirety.
Section 9 is similar to Section 7.
Sections 12, 15, 19, 21-22, 27, and 30-35 amend Sections 252(d), 256(d), 263(d), 264(d), 266(c)(6), 321(b), 376(b), 351(c), 382(a), 382(c) and 390(b)(5) so as to permit service upon the Secretary of State by electronic means pursuant to rules to be adopted by the Secretary and to provide that notice of such service by letter sent by mail or a courier service that includes a record of mailing, delivery and the signature of the recipient.
(d) If the corporation surviving or resulting from the merger or consolidation is to be governed by the laws of the District of Columbia or any state or jurisdiction other than this State, it shall agree that it may be served with process in this State in any proceeding for enforcement of any obligation of any constituent corporation of this State, as well as for enforcement of any obligation of the surviving or resulting corporation arising from the merger or consolidation, including any suit or other proceeding to enforce the right of any stockholders as determined in appraisal proceedings pursuant to § 262 of this title, and shall irrevocably appoint the Secretary of State as its agent to accept service of process in any such suit or other proceedings and shall specify the address to which a copy of such process shall be mailed by the Secretary of State. Process may be served upon the Secretary of State under this subsection by means of electronic transmission but only as prescribed by the Secretary of State. The Secretary of State is authorized to issue such rules and regulations with respect to such service as the Secretary of State deems necessary or appropriate. In the event of such service upon the Secretary of State in accordance with this subsection, the Secretary of State shall forthwith notify such surviving or resulting corporation thereof by letter, certified mail, return receipt requested, directed to such surviving or resulting corporation at its address so specified, unless such surviving or resulting corporation shall have designated in writing to the Secretary of State a different address for such purpose, in which case it shall be mailed to the last address so designated. Such letter shall enclose a copy of the process and any other papers served on the Secretary of State pursuant to this subsection. It shall be the duty of the plaintiff in the event of such service to serve process and any other papers in duplicate, to notify the Secretary of State that service is being effected pursuant to this subsection and to pay the Secretary of State the sum of $50 for the use of the State, which sum shall be taxed as part of the costs in the proceeding, if the plaintiff shall prevail thereinbe sent by a mail or courier service that includes a record of mailing or deposit with the courier and a record of delivery evidenced by the signature of the recipient.
Section 13 amends Section 253(a) to conform to new Section 267(a).
Section 23 creates new Section267.
Sections 24-25 amend Section 274 and 275(d) to require that a certificate of dissolution must set forth the date of the filing of the corporation’s original certificate of incorporation.
Section 26 amends Section 278 to confirm that Sections 279 through 282, including those applicable to winding up, also apply to corporations that have expired by their own terms.
Section 28 amends Section 371(b)(1) to require that in the qualification of a foreign corporation, the certificate from the corporation’s foreign jurisdiction must not be older than 6 months from the date of filing.
Section 29 amends Section371(b)(2) to expand the types of entities which may serve as the registered agent for a domestic or foreign corporations qualified to do business in Delaware.
These amendments together with the non-stock amendments I previously wrote about present opportunities and challenges when forming and operating Delaware corporations. Please contact me for further information. sgoldberg@delcorp.com
