CHAPTER 341

FORMERLY

SENATE BILL NO. 320

AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE RELATING TO THE CREATION, REGULATION, OPERATION AND DISSOLUTION OF DOMESTIC LIMITED LIABILITY COMPANIES AND THE REGISTRATION AND REGULATION OF FOREIGN LIMITED LIABILITY COMPANIES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (three-fifths of all members elected to each house thereof concurring therein):

Section 1. Amend § 18-101(7)a(2), Chapter 18, Title 6 of the Delaware Code by deleting the words "and requests (orally, in writing or by other action such as payment for a limited liability company interest) that the records of the limited liability company reflect such admission or assignment".

Section 2. Amend § 18-203, Chapter 18, Title 6 of the Delaware Code by deleting the word "and" appearing at the end of paragraph (4) thereof, by renumbering paragraph (5) as paragraph (6), and by adding a new paragraph (5) in its appropriate numerical order to read as follows: "(5) In the case of the conversion of a domestic limited liability company, the name of the entity to which the domestic limited liability company has been converted; and".

Section 3. Amend § 18-209(6), Chapter 18, Title 6 of the Delaware Code by deleting the first sentence of the said subsection and substituting in lieu thereof the following sentence:

"Pursuant to an agreement of merger or consolidation, 1 or more domestic limited liability companies may merge or consolidate with or into 1 or more domestic limited liability companies or 1 or more other business entities formed or organized under the laws of the State of Delaware or any other state or the United States or any foreign country or other foreign jurisdiction, or any combination thereof, with such domestic limited liability companies or other business entity as the agreement shall provide being the surviving or resulting domestic limited liability companies or other business entity."

Section 4. Amend § 18-209(c), Chapter 18, Title 6 of the Delaware Code by adding the words "executed by one or more authorized persons on behalf of the domestic limited liability company when it is the surviving or resulting entity" before the words "in the Office of the Secretary of State" in the first sentence of the subsection.

Section 5. Amend § 18-209(c)(1) and § 8-209(c)(2), Chapter 18, Title 6 of the Delaware Code by deleting the word "or" as it appears in each of the said subsections immediately following the words "domestic limited liability companies", and substituting in lieu thereof the word "and".

Section 6. Amend § 18-209(d), Chapter 18, Title 6 of the Delaware Code by deleting the second sentence of the said subsection and substituting in lieu thereof the following:

"If a certificate of merger or consolidation provides for a future effective date or time and if an agreement of merger or consolidation is amended to change the future effective date or time, or if an agreement of merger or consolidation permits a certificate of merger or consolidation to be amended to change the future effective date or time without an amendment to the agreement of merger or consolidation, or if an agreement of merger or consolidation is amended to change any other matter described in the certificate of merger or consolidation so as to make the certificate of merger or consolidation false in any material respect, as permitted by § 18-209(b) of this title prior to the future effective date or time, the certificate of merger or consolidation shall be amended by the filing of a certificate of amendment of a certificate of merger or consolidation which shall identify the certificate of merger or consolidation and the agreement of merger or consolidation, if applicable, which has been amended and shall state that the agreement of merger or consolidation, if applicable, has been amended and shall set forth the amendment to the certificate of merger or consolidation."

Section 7. Amend § 18-209(e), Chapter 18, Title 6 of the Delaware Code by adding a new sentence at the end of said subsection as follows:

"Whenever this section requires the filing of a certificate of merger or consolidation, such requirement shall be deemed satisfied by the filing of an agreement of merger or consolidation containing the information required by this section to be set forth in the certificate of merger or consolidation."

Section 8. Amend § 18-213(6), Chapter 18, Title 6 of the Delaware Code by deleting the words "Notwithstanding anything to the contrary in this chapter or a limited liability company agreement", and substituting in lieu thereof the words "Unless otherwise provided in a limited liability company agreement", and by adding, in the second sentence of the said subsection, following the words "If all of the managers and all of the members of the limited liability company", the words "or such other vote as may be stated in a limited liability company agreement".

Section 9. Amend § 18-215(b), Chapter 18, Title 6 of the Delaware Code by adding following the word "generally" at the end of the first sentence thereof, the words: "or any other series thereof, and, unless otherwise provided in the limited liability company agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the limited liability company generally or any other series thereof shall be enforceable against the assets of such series.".

Section 10. Amend § 18-215(m), Chapter 18, Title 6 of the Delaware Code by adding following the word "generally" at the end of the second sentence thereof, the words: "or any other series thereof, and, unless otherwise provided in the limited liability company agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the foreign limited liability company generally or any other series thereof shall be enforceable against the assets of such series".

Section 11. Amend § 18-302(c), Chapter 18, Title 6 of the Delaware Code by deleting therefrom the words "which grants a right to vote".

Section 12. Amend § 18-402, Chapter 18, Title 6 of the Delaware Code by deleting from the first sentence of the referenced section the words "by the members", following the word "chosen".

Section 13. Amend § 18-404(c), Chapter 18, Title 6 of the Delaware Code by deleting therefrom the words "which grants a right to vote".

Section 14. Amend § 18-604, Chapter 18, Title 6 of the Delaware Code by deleting the existing text of the section in its entirety and substituting in lieu thereof the following: "Except as provided in this subchapter, a member who resigns or otherwise ceases for any reason to be a member is entitled to receive on the terms and conditions provided in a limited liability company agreement any distribution to which such member is entitled under the limited liability company agreement, and if not otherwise provided in the limited liability company agreement, such member is entitled to receive, within a reasonable time after the date on which such member resigned or otherwise ceased to be a member, the fair value of such member's interest in the limited liability company as of the date on which such member resigned or otherwise ceased to be a member based upon such member's right to share in distributions from the limited liability company."

Section 15. Amend § 18-804, Chapter 18, Title 6 of the Delaware Code by deleting in its entirety subparagraph (b) of the said section and substituting in lieu thereof the following new subparagraph (b), and by adding to the said section new paragraphs (c), (d) and (e) as set forth below:

"(b) A limited liability company which has dissolved (i) shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims, known to the limited liability company, (ii) shall make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against the limited liability company which is the subject of a pending action, suit or proceeding to which the limited liability company is a party and (iii) shall make such provision as wilt be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the limited liability company or that have not arisen but that, based on facts known to the limited liability company, are likely to arise or to become known to the limited liability company within 10 years after the date of dissolution. If there are sufficient assets, such claims and obligations shall be paid in full and any such provision for payment made shall be made in full. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of assets available therefor. Unless otherwise provided in the limited liability company agreement, any remaining assets shall be distributed as provided in this chapter. Any liquidating trustee winding up a limited liability company's affairs who has complied with this section shall not be personally liable to the claimants of the dissolved limited liability company by reason of such person's actions in winding up the limited liability company.

(c) A member who receives a distribution in violation of subsection (a) of this section, and who knew at the time of the distribution that the distribution violated subsection (a) of this section, shall be liable to the limited liability company for the amount of the distribution. A member who receives a distribution in violation of subsection (a) of this section, and who did not know at the time of the distribution that the distribution violated subsection (a) of this section, shall not be liable for the amount of the distribution. Subject to subsection (d) of this section, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.

(d) Unless otherwise agreed, a member who receives a distribution from a limited liability company to which this section applies shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of 3 years from the date of the distribution unless an action to recover the distribution from such member is commenced prior to the expiration of the said 3-year period and an adjudication of liability against such member is made in the said action.

() Section 18-607 of this title shall not apply to a distribution to which this section applies."

Section 16. Amend § 18-1001, Chapter 18, Title 6 of the Delaware Code by adding the words "or an assignee of a limited liability company interest" immediately after the word "member".

Section 17. Amend § 18-1002, Chapter 18, Title 6 of the Delaware Code by adding the

words "or an assignee of a limited liability company interest" immediately after the word "member" in the three places where the word "member" appears in that section.

Section 18. Amend § 18-1107(k), Chapter 18, Title 6 of the Delaware Code by deleting the word "with" as it appears after the words "to be filed in respect of any domestic limited liability company or foreign limited liability company", and substituting in lieu thereof the word "which".

Section 19. This Act shall become effective August 1, 1998.

Approved June 29, 1998