Delaware – Limited Liability Company Act – General Provisions

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§ 18-101. | § 18-102. | § 18-103. | § 18-104. | § 18-105. | § 18-106. | § 18-107. | § 18-108. | § 18-109. | § 18-110. | § 18-111.

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 18. LIMITED LIABILITY COMPANY ACT

Subchapter I. General Provisions

§ 18-101. Definitions.

As used in this chapter unless the context otherwise requires:

(1) “Bankruptcy” means an event that causes a person to cease to be a member as provided in § 18-304 of this title.

(2) “Certificate of formation” means the certificate referred to in § 18-201 of this title, and the certificate as amended.

(3) “Contribution” means any cash,
property, services rendered or a promissory note or other obligation to
contribute cash or property or to perform services, which a person
contributes to a limited liability company in the person’s capacity as
a member.

(4) “Foreign limited liability company”
means a limited liability company formed under the laws of any state or
under the laws of any foreign country or other foreign jurisdiction and
denominated as such under the laws of such state or foreign country or
other foreign jurisdiction.

(5) “Knowledge” means a person’s actual knowledge of a fact, rather than the person’s constructive knowledge of the fact.

(6) “Limited liability company” and
“domestic limited liability company” means a limited liability company
formed under the laws of the State of Delaware and having 1 or more
members.

(7) “Limited liability company agreement”
means any agreement (whether referred to as a limited liability company
agreement, operating agreement or otherwise), written, oral or implied,
of the member or members as to the affairs of a limited liability
company and the conduct of its business. A member or manager of a
limited liability company or an assignee of a limited liability company
interest is bound by the limited liability company agreement whether or
not the member or manager or assignee executes the limited liability
company agreement. A limited liability company is not required to
execute its limited liability company agreement. A limited liability
company is bound by its limited liability company agreement whether or
not the limited liability company executes the limited liability
company agreement. A limited liability company agreement of a limited
liability company having only 1 member shall not be unenforceable by
reason of there being only 1 person who is a party to the limited
liability company agreement. A limited liability company agreement may
provide rights to any person, including a person who is not a party to
the limited liability company agreement, to the extent set forth
therein. A written limited liability company agreement or another
written agreement or writing:

a. May provide that a person shall be
admitted as a member of a limited liability company, or shall become an
assignee of a limited liability company interest or other rights or
powers of a member to the extent assigned:

1. If such person (or a representative
authorized by such person orally, in writing or by other action such as
payment for a limited liability company interest) executes the limited
liability company agreement or any other writing evidencing the intent
of such person to become a member or assignee; or

2. Without such execution, if such person
(or a representative authorized by such person orally, in writing or by
other action such as payment for a limited liability company interest)
complies with the conditions for becoming a member or assignee as set
forth in the limited liability company agreement or any other writing;
and

b. Shall not be unenforceable by reason
of its not having been signed by a person being admitted as a member or
becoming an assignee as provided in subparagraph a. of this paragraph,
or by reason of its having been signed by a representative as provided
in this chapter.

(8) “Limited liability company interest”
means a member’s share of the profits and losses of a limited liability
company and a member’s right to receive distributions of the limited
liability company’s assets.

(9) “Liquidating trustee” means a person carrying out the winding up of a limited liability company.

(10) “Manager” means a person who is
named as a manager of a limited liability company in, or designated as
a manager of a limited liability company pursuant to, a limited
liability company agreement or similar instrument under which the
limited liability company is formed.

(11) “Member” means a person who is
admitted to a limited liability company as a member as provided in §
18-301 of this title or, in the case of a foreign limited liability
company, in accordance with the laws of the state or foreign country or
other foreign jurisdiction under which the foreign limited liability
company is formed.

(12) “Person” means a natural person,
partnership (whether general or limited), limited liability company,
trust (including a common law trust, business trust, statutory trust,
voting trust or any other form of trust), estate, association
(including any group, organization, co-tenancy, plan, board, council or
committee), corporation, government (including a country, state, county
or any other governmental subdivision, agency or instrumentality),
custodian, nominee or any other individual or entity (or series
thereof) in its own or any representative capacity, in each case,
whether domestic or foreign.

(13) “Personal representative” means, as
to a natural person, the executor, administrator, guardian, conservator
or other legal representative thereof and, as to a person other than a
natural person, the legal representative or successor thereof.

(14) “State” means the District of
Columbia or the Commonwealth of Puerto Rico or any state, territory,
possession or other jurisdiction of the United States other than the
State of Delaware. (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, §
1; 70 Del. Laws, c. 75, §§ 1-3; 70 Del. Laws, c. 186, § 1; 71 Del.
Laws, c. 77, §§ 1, 2; 71 Del. Laws, c. 341, § 1; 72 Del. Laws, c. 129,
§ 1; 73 Del. Laws, c. 83, § 1; 73 Del. Laws, c. 295, §§ 1, 2; 74 Del.
Laws, c. 275, § 1; 75 Del. Laws, c. 51, § 1; 75 Del. Laws, c. 317, § 1;
76 Del. Laws, c. 105, §§ 1, 2; 76 Del. Laws, c. 387, § 1.)

§ 18-102. Name set forth in certificate.

The name of each limited liability company as set forth in its certificate of formation:

(1) Shall contain the words “Limited Liability Company” or the abbreviation “L.L.C.” or the designation “LLC”;

(2) May contain the name of a member or manager;

(3) Must be such as to distinguish it
upon the records in the office of the Secretary of State from the name
on such records of any corporation, partnership, limited partnership,
statutory trust or limited liability company reserved, registered,
formed or organized under the laws of the State of Delaware or
qualified to do business or registered as a foreign corporation,
foreign limited partnership, foreign statutory trust, foreign
partnership, or foreign limited liability company in the State of
Delaware; provided however, that a limited liability company may
register under any name which is not such as to distinguish it upon the
records in the office of the Secretary of State from the name on such
records of any domestic or foreign corporation, partnership, limited
partnership, statutory trust or limited liability company reserved,
registered, formed or organized under the laws of the State of Delaware
with the written consent of the other corporation, partnership, limited
partnership, statutory trust or limited liability company, which
written consent shall be filed with the Secretary of State; and

(4) May contain the following words:
“Company,” “Association,” “Club,” “Foundation,” “Fund,” “Institute,”
“Society,” “Union,” “Syndicate,” “Limited” or “Trust” (or abbreviations
of like import). (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, § 2;
70 Del. Laws, c. 75, § 4; 72 Del. Laws, c. 389, § 1; 73 Del. Laws, c.
83, § 2; 73 Del. Laws, c. 329, § 25.)

§ 18-103. Reservation of name.

(a) The exclusive right to the use of a name may be reserved by:

(1) Any person intending to organize a limited liability company under this chapter and to adopt that name;

(2) Any domestic limited liability
company or any foreign limited liability company registered in the
State of Delaware which, in either case, proposes to change its name;

(3) Any foreign limited liability company intending to register in the State of Delaware and adopt that name; and

(4) Any person intending to organize a
foreign limited liability company and intending to have it register in
the State of Delaware and adopt that name.

(b) The reservation of a specified name
shall be made by filing with the Secretary of State an application,
executed by the applicant, specifying the name to be reserved and the
name and address of the applicant. If the Secretary of State finds that
the name is available for use by a domestic or foreign limited
liability company, the Secretary shall reserve the name for the
exclusive use of the applicant for a period of 120 days. Once having so
reserved a name, the same applicant may again reserve the same name for
successive 120-day periods. The right to the exclusive use of a
reserved name may be transferred to any other person by filing in the
office of the Secretary of State a notice of the transfer, executed by
the applicant for whom the name was reserved, specifying the name to be
transferred and the name and address of the transferee. The reservation
of a specified name may be cancelled by filing with the Secretary of
State a notice of cancellation, executed by the applicant or
transferee, specifying the name reservation to be cancelled and the
name and address of the applicant or transferee. Unless the Secretary
of State finds that any application, notice of transfer, or notice of
cancellation filed with the Secretary of State as required by this
subsection does not conform to law, upon receipt of all filing fees
required by law the Secretary shall prepare and return to the person
who filed such instrument a copy of the filed instrument with a
notation thereon of the action taken by the Secretary of State.

(c) A fee as set forth in § 18-1105(a)(1)
of this title shall be paid at the time of the initial reservation of
any name, at the time of the renewal of any such reservation and at the
time of the filing of a notice of the transfer or cancellation of any
such reservation. (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, §
3; 70 Del. Laws, c. 186, § 1.)

§ 18-104. Registered office; registered agent.

(a) Each limited liability company shall have and maintain in the State of Delaware:

(1) A registered office, which may but need not be a place of its business in the State of Delaware; and

(2) A registered agent for service of
process on the limited liability company, having a business office
identical with such registered office, which agent may be any of:

a. The limited liability company itself,

b. An individual resident in the State of Delaware,

c. A domestic limited liability company
(other than the limited liability company itself), a domestic
corporation, a domestic partnership (whether general (including a
limited liability partnership) or limited (including a limited
liability limited partnership)), or a domestic statutory trust, or

d. A foreign corporation, a foreign
partnership (whether general (including a limited liability
partnership) or limited (including a limited liability limited
partnership)), a foreign limited liability company, or a foreign
statutory trust.

(b) A registered agent may change the
address of the registered office of the limited liability company(ies)
for which it is registered agent to another address in the State of
Delaware by paying a fee as set forth in § 18-1105(a)(2) of this title
and filing with the Secretary of State a certificate, executed by such
registered agent, setting forth the address at which such registered
agent has maintained the registered office for each of the limited
liability companies for which it is a registered agent, and further
certifying to the new address to which each such registered office will
be changed on a given day, and at which new address such registered
agent will thereafter maintain the registered office for each of the
limited liability companies for which it is a registered agent. Upon
the filing of such certificate, the Secretary of State shall furnish to
the registered agent a certified copy of the same under the Secretary’s
hand and seal of office, and thereafter, or until further change of
address, as authorized by law, the registered office in the State of
Delaware of each of the limited liability companies for which the agent
is a registered agent shall be located at the new address of the
registered agent thereof as given in the certificate. In the event of a
change of name of any person acting as a registered agent of a limited
liability company, such registered agent shall file with the Secretary
of State a certificate executed by such registered agent setting forth
the new name of such registered agent, the name of such registered
agent before it was changed, and the address at which such registered
agent has maintained the registered office for each of the limited
liability companies for which it is a registered agent, and shall pay a
fee as set forth in § 18-1105(a)(2) of this title. Upon the filing of
such certificate, the Secretary of State shall furnish to the
registered agent a certified copy of the certificate under the
Secretary of State’s own hand and seal of office. A change of name of
any person acting as a registered agent of a limited liability company
as a result of a merger or consolidation of the registered agent with
or into another person which succeeds to its assets and liabilities by
operation of law shall be deemed a change of name for purposes of this
section. Filing a certificate under this section shall be deemed to be
an amendment of the certificate of formation of each limited liability
company affected thereby, and each such limited liability company shall
not be required to take any further action with respect thereto to
amend its certificate of formation under § 18-202 of this title. Any
registered agent filing a certificate under this section shall
promptly, upon such filing, deliver a copy of any such certificate to
each limited liability company affected thereby.

(c) The registered agent of 1 or more
limited liability companies may resign and appoint a successor
registered agent by paying a fee as set forth in § 18-1105(a)(2) of
this title and filing a certificate with the Secretary of State stating
that it resigns and the name and address of the successor registered
agent. There shall be attached to such certificate a statement of each
affected limited liability company ratifying and approving such change
of registered agent. Upon such filing, the successor registered agent
shall become the registered agent of such limited liability companies
as have ratified and approved such substitution, and the successor
registered agent’s address, as stated in such certificate, shall become
the address of each such limited liability company’s registered office
in the State of Delaware. The Secretary of State shall then issue a
certificate that the successor registered agent has become the
registered agent of the limited liability companies so ratifying and
approving such change and setting out the names of such limited
liability companies. Filing of such certificate of resignation shall be
deemed to be an amendment of the certificate of formation of each
limited liability company affected thereby, and each such limited
liability company shall not be required to take any further action with
respect thereto to amend its certificate of formation under § 18-202 of
this title.

(d) The registered agent of 1 or more
limited liability companies may resign without appointing a successor
registered agent by paying a fee as set forth in § 18-1105(a)(2) of
this title and filing a certificate of resignation with the Secretary
of State, but such resignation shall not become effective until 30 days
after the certificate is filed. The certificate shall contain a
statement that written notice of resignation was given to each affected
limited liability company at least 30 days prior to the filing of the
certificate by mailing or delivering such notice to the limited
liability company at its address last known to the registered agent and
shall set forth the date of such notice. After receipt of the notice of
the resignation of its registered agent, the limited liability company
for which such registered agent was acting shall obtain and designate a
new registered agent, to take the place of the registered agent so
resigning. If such limited liability company fails to obtain and
designate a new registered agent as aforesaid prior to the expiration
of the period of 30 days after the filing by the registered agent of
the certificate of resignation, the certificate of formation of such
limited liability company shall be canceled. After the resignation of
the registered agent shall have become effective as provided in this
section and if no new registered agent shall have been obtained and
designated in the time and manner aforesaid, service of legal process
against each limited liability company for which the resigned
registered agent had been acting shall thereafter be upon the Secretary
of State in accordance with § 18-105 of this title.

(e) Every registered agent shall:

(1) If an entity, maintain a business
office in the State of Delaware which is generally open, or if an
individual, be generally present at a designated location in the State
of Delaware, at sufficiently frequent times to accept service of
process and otherwise perform the functions of a registered agent;

(2) If a foreign entity, be authorized to transact business in the State of Delaware;

(3) Accept service of process and other
communications directed to the limited liability companies and foreign
limited liability companies for which it serves as registered agent and
forward same to the limited liability company or foreign limited
liability company to which the service or communication is directed; and

(4) Forward to the limited liability
companies and foreign limited liability companies for which it serves
as registered agent the statement for the annual tax described in §
18-1107 of this title or an electronic notification of same in a form
satisfactory to the Secretary of State.

(f) Any registered agent who at any time
serves as registered agent for more than 50 entities (a “commercial
registered agent”), whether domestic or foreign, shall satisfy and
comply with the following qualifications:

(1) A natural person serving as a commercial registered agent shall:

a. Maintain a principal residence or a principal place of business in the State of Delaware;

b. Maintain a Delaware business license;

c. Be generally present at a designated
location within the State of Delaware during normal business hours to
accept service of process and otherwise perform the functions of a
registered agent as specified in subsection (e) of this section; and

d. Provide the Secretary of State upon
request with such information identifying and enabling communication
with such commercial registered agent as the Secretary of State shall
require.

(2) A domestic or foreign corporation, a
domestic or foreign partnership (whether general (including a limited
liability partnership) or limited (including a limited liability
limited partnership)), a domestic or foreign limited liability company,
or a domestic or foreign statutory trust serving as a commercial
registered agent shall:

a. Have a business office within the
State of Delaware which is generally open during normal business hours
to accept service of process and otherwise perform the functions of a
registered agent as specified in subsection (e) of this section;

b. Maintain a Delaware business license;

c. Have generally present at such office
during normal business hours an officer, director or managing agent who
is a natural person; and

d. Provide the Secretary of State upon
request with such information identifying and enabling communication
with such commercial registered agent as the Secretary of State shall
require.

(3) For purposes of this subsection and
subsection (i)(2)a. of this section, a commercial registered agent
shall also include any registered agent which has an officer, director
or managing agent in common with any other registered agent or agents
if such registered agents at any time during such common service as
officer, director or managing agent collectively served as registered
agents for more than 50 entities, whether domestic or foreign.

(g) Every limited liability company
formed under the laws of the State of Delaware or qualified to do
business in the State of Delaware shall provide to its registered agent
and update from time to time as necessary the name, business address
and business telephone number of a natural person who is a member,
manager, officer, employee or designated agent of the limited liability
company, who is then authorized to receive communications from the
registered agent. Such person shall be deemed the communications
contact for the limited liability company. Every registered agent shall
retain (in paper or electronic form) the above information concerning
the current communications contact for each limited liability company
and each foreign limited liability company for which that registered
agent serves as registered agent. If the limited liability company
fails to provide the registered agent with a current communications
contact, the registered agent may resign as the registered agent for
such limited liability company pursuant to this section.

(h) The Secretary of State is authorized
to issue such rules and regulations as may be necessary or appropriate
to carry out the enforcement of subsections (e), (f) and (g) of this
section, and to take actions reasonable and necessary to assure
registered agents’ compliance with subsections (e), (f) and (g) of this
section. Such actions may include refusal to file documents submitted
by a registered agent.

(i) Upon application of the Secretary of
State, the Court of Chancery may enjoin any person or entity from
serving as a registered agent or as an officer, director or managing
agent of a registered agent.

(1) Upon the filing of a complaint by the
Secretary of State pursuant to this section, the court may make such
orders respecting such proceeding as it deems appropriate, and may
enter such orders granting interim or final relief as it deems proper
under the circumstances.

(2) Any 1 or more of the following grounds shall be a sufficient basis to grant an injunction pursuant to this section:

a. With respect to any registered agent
who at any time within 1 year immediately prior to the filing of the
Secretary of State’s complaint is a commercial registered agent,
failure after notice and warning to comply with the qualifications set
forth in subsection (e) of this section and/or the requirements of
subsections (f) or (g) of this section above;

b. The person serving as a registered
agent, or any person who is an officer, director or managing agent of
an entity registered agent, has been convicted of a felony or any crime
which includes an element of dishonesty or fraud or involves moral
turpitude; or

c. The registered agent has engaged in
conduct in connection with acting as a registered agent that is
intended to or likely to deceive or defraud the public.

(3) With respect to any order the court
enters pursuant to this section with respect to an entity that has
acted as a registered agent, the court may also direct such order to
any person who has served as an officer, director or managing agent of
such registered agent. Any person who, on or after January 1, 2007,
serves as an officer, director or managing agent of an entity acting as
a registered agent in the State of Delaware shall be deemed thereby to
have consented to the appointment of such registered agent as agent
upon whom service of process may be made in any action brought pursuant
to this section, and service as an officer, director or managing agent
of an entity acting as a registered agent in the State of Delaware
shall be a signification of the consent of such person that any process
when so served shall be of the same legal force and validity as if
served upon such person within the State of Delaware, and such
appointment of the registered agent shall be irrevocable.

(4) Upon the entry of an order by the
court enjoining any person or entity from acting as a registered agent,
the Secretary of State shall mail or deliver notice of such order to
each affected limited liability company:

a. That has specified the address of a place of business in a record of the Secretary of State, to the address specified, or

b. An address of which the Secretary of
State has obtained from the limited liability company’s former
registered agent, to the address obtained.

If such a limited liability company is a
domestic limited liability company and fails to obtain and designate a
new registered agent within 30 days after such notice is given, the
certificate of formation of such limited liability company shall be
cancelled. If such a limited liability company is a foreign limited
liability company and fails to obtain and designate a new registered
agent within 30 days after such notice is given, such foreign limited
liability company shall not be permitted to do business in the State of
Delaware and its registration shall be cancelled. If any other affected
limited liability company is a domestic limited liability company and
fails to obtain and designate a new registered agent within 60 days
after entry of an order by the court enjoining such limited liability
company’s registered agent from acting as a registered agent, the
certificate of formation of such limited liability company shall be
cancelled. If any other affected limited liability company is a foreign
limited liability company and fails to obtain and designate a new
registered agent within 60 days after entry of an order by court
enjoining such limited liability company’s registered agent from acting
as a registered agent, such foreign limited liability company shall not
be permitted to do business in the State of Delaware and its
registration shall be cancelled. If the court enjoins a person or
entity from acting as a registered agent as provided in this section
and no new registered agent shall have been obtained and designated in
the time and manner aforesaid, service of legal process against the
limited liability company for which the registered agent had been
acting shall thereafter be upon the Secretary of State in accordance
with § 18-105 or § 18-911 of this title. The Court of Chancery may,
upon application of the Secretary of State on notice to the former
registered agent, enter such orders as it deems appropriate to give the
Secretary of State access to information in the former registered
agent’s possession in order to facilitate communication with the
limited liability companies the former registered agent served.

(j) The Secretary of State is authorized
to make a list of registered agents available to the public, and to
establish such qualifications and issue such rules and regulations with
respect to such listing as the Secretary of State deems necessary or
appropriate. (68 Del. Laws, c. 434, § 1; 70 Del. Laws, c. 186, § 1; 71
Del. Laws, c. 77, §§ 3, 4; 73 Del. Laws, c. 83, § 3; 73 Del. Laws, c.
329, § 26; 75 Del. Laws, c. 317, §§ 2, 3; 76 Del. Laws, c. 105, §§ 3-8.)

§ 18-105. Service of process on domestic limited liability companies.

(a) Service of legal process upon any
domestic limited liability company shall be made by delivering a copy
personally to any manager of the limited liability company in the State
of Delaware or the registered agent of the limited liability company in
the State of Delaware, or by leaving it at the dwelling house or usual
place of abode in the State of Delaware of any such manager or
registered agent (if the registered agent be an individual), or at the
registered office or other place of business of the limited liability
company in the State of Delaware. If the registered agent be a
corporation, service of process upon it as such may be made by serving,
in the State of Delaware, a copy thereof on the president,
vice-president, secretary, assistant secretary or any director of the
corporate registered agent. Service by copy left at the dwelling house
or usual place of abode of a manager or registered agent, or at the
registered office or other place of business of the limited liability
company in the State of Delaware, to be effective, must be delivered
thereat at least 6 days before the return date of the process, and in
the presence of an adult person, and the officer serving the process
shall distinctly state the manner of service in the officer’s return
thereto. Process returnable forthwith must be delivered personally to
the manager or registered agent.

(b) In case the officer whose duty it is
to serve legal process cannot by due diligence serve the process in any
manner provided for by subsection (a) of this section, it shall be
lawful to serve the process against the limited liability company upon
the Secretary of State, and such service shall be as effectual for all
intents and purposes as if made in any of the ways provided for in
subsection (a) of this section. In the event that service is effected
through the Secretary of State in accordance with this subsection, the
Secretary of State shall forthwith notify the limited liability company
by letter, certified mail, return receipt requested, directed to the
limited liability company at its address as it appears on the records
relating to such limited liability company on file with the Secretary
of State or, if no such address appears, at its last registered office.
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
of Delaware, which sum shall be taxed as part of the costs in the
proceeding if the plaintiff shall prevail therein. The Secretary of
State shall maintain an alphabetical record of any such service setting
forth the name of the plaintiff and defendant, the title, docket number
and nature of the proceeding in which process has been served upon the
Secretary, the fact that service has been effected pursuant to this
subsection, the return date thereof, and the day and hour when the
service was made. The Secretary of State shall not be required to
retain such information for a period longer than 5 years from the
Secretary’s receipt of the service of process. (68 Del. Laws, c. 434, §
1; 70 Del. Laws, c. 186, § 1.)

§ 18-106. Nature of business permitted; powers.

(a) A limited liability company may carry
on any lawful business, purpose or activity, whether or not for profit,
with the exception of the business of banking as defined in § 126 of
Title 8.

(b) A limited liability company shall
possess and may exercise all the powers and privileges granted by this
chapter or by any other law or by its limited liability company
agreement, together with any powers incidental thereto, including such
powers and privileges as are necessary or convenient to the conduct,
promotion or attainment of the business, purposes or activities of the
limited liability company.

(c) Notwithstanding any provision of this
chapter to the contrary, without limiting the general powers enumerated
in subsection (b) of this section, a limited liability company shall,
subject to such standards and restrictions, if any, as are set forth in
its limited liability company agreement, have the power and authority
to make contracts of guaranty and suretyship and enter into interest
rate, basis, currency, hedge or other swap agreements or cap, floor,
put, call, option, exchange or collar agreements, derivative
agreements, or other agreements similar to any of the foregoing. (68
Del. Laws, c. 434, § 1; 71 Del. Laws, c. 77, § 5; 72 Del. Laws, c. 129,
§ 2; 73 Del. Laws, c. 295, § 3; 75 Del. Laws, c. 51, § 2.)

§ 18-107. Business transactions of member or manager with the limited liability company.

Except as provided in a limited liability
company agreement, a member or manager may lend money to, borrow money
from, act as a surety, guarantor or endorser for, guarantee or assume 1
or more obligations of, provide collateral for, and transact other
business with, a limited liability company and, subject to other
applicable law, has the same rights and obligations with respect to any
such matter as a person who is not a member or manager. (68 Del. Laws,
c. 434, § 1; 69 Del. Laws, c. 260, § 4.)

§ 18-108. Indemnification.

Subject to such standards and
restrictions, if any, as are set forth in its limited liability company
agreement, a limited liability company may, and shall have the power
to, indemnify and hold harmless any member or manager or other person
from and against any and all claims and demands whatsoever. (68 Del.
Laws, c. 434, § 1.)

§ 18-109. Service of process on managers and liquidating trustees.

(a) A manager or a liquidating trustee of
a limited liability company may be served with process in the manner
prescribed in this section in all civil actions or proceedings brought
in the State of Delaware involving or relating to the business of the
limited liability company or a violation by the manager or the
liquidating trustee of a duty to the limited liability company or any
member of the limited liability company, whether or not the manager or
the liquidating trustee is a manager or a liquidating trustee at the
time suit is commenced. A manager’s or a liquidating trustee’s serving
as such constitutes such person’s consent to the appointment of the
registered agent of the limited liability company (or, if there is
none, the Secretary of State) as such person’s agent upon whom service
of process may be made as provided in this section. Such service as a
manager or a liquidating trustee shall signify the consent of such
manager or liquidating trustee that any process when so served shall be
of the same legal force and validity as if served upon such manager or
liquidating trustee within the State of Delaware and such appointment
of the registered agent (or, if there is none, the Secretary of State)
shall be irrevocable. As used in this subsection (a) and in subsections
(b), (c) and (d) of this section, the term “manager” refers (i) to a
person who is a manager as defined in § 18-101(10) of this title and
(ii) to a person, whether or not a member of a limited liability
company, who, although not a manager as defined in § 18-101(10) of this
title, participates materially in the management of the limited
liability company; provided however, that the power to elect or
otherwise select or to participate in the election or selection of a
person to be a manager as defined in § 18-101(10) of this title shall
not, by itself, constitute participation in the management of the
limited liability company.

(b) Service of process shall be effected
by serving the registered agent (or, if there is none, the Secretary of
State) with 1 copy of such process in the manner provided by law for
service of writs of summons. In the event service is made under this
subsection upon the Secretary of State, the plaintiff shall pay to the
Secretary of State the sum of $50 for the use of the State of Delaware,
which sum shall be taxed as part of the costs of the proceeding if the
plaintiff shall prevail therein. In addition, the Prothonotary or the
Register in Chancery of the court in which the civil action or
proceeding is pending shall, within 7 days of such service, deposit in
the United States mails, by registered mail, postage prepaid, true and
attested copies of the process, together with a statement that service
is being made pursuant to this section, addressed to such manager or
liquidating trustee at the registered office of the limited liability
company and at the manager’s or liquidating trustee’s address last
known to the party desiring to make such service.

(c) In any action in which any such
manager or liquidating trustee has been served with process as
hereinabove provided, the time in which a defendant shall be required
to appear and file a responsive pleading shall be computed from the
date of mailing by the Prothonotary or the Register in Chancery as
provided in subsection (b) of this section; however, the court in which
such action has been commenced may order such continuance or
continuances as may be necessary to afford such manager or liquidating
trustee reasonable opportunity to defend the action.

(d) In a written limited liability
company agreement or other writing, a manager or member may consent to
be subject to the nonexclusive jurisdiction of the courts of, or
arbitration in, a specified jurisdiction, or the exclusive jurisdiction
of the courts of the State of Delaware, or the exclusivity of
arbitration in a specified jurisdiction or the State of Delaware, and
to be served with legal process in the manner prescribed in such
limited liability company agreement or other writing. Except by
agreeing to arbitrate any arbitrable matter in a specified jurisdiction
or in the State of Delaware, a member who is not a manager may not
waive its right to maintain a legal action or proceeding in the courts
of the State of Delaware with respect to matters relating to the
organization or internal affairs of a limited liability company.

(e) Nothing herein contained limits or
affects the right to serve process in any other manner now or hereafter
provided by law. This section is an extension of and not a limitation
upon the right otherwise existing of service of legal process upon
nonresidents.

(f) The Court of Chancery and the
Superior Court may make all necessary rules respecting the form of
process, the manner of issuance and return thereof and such other rules
which may be necessary to implement this section and are not
inconsistent with this section. (68 Del. Laws, c. 434, § 1; 70 Del.
Laws, c. 186, § 1; 71 Del. Laws, c. 77, § 6; 72 Del. Laws, c. 129, § 3;
72 Del. Laws, c. 389, §§ 2, 3.)

§ 18-110. Contested matters relating to managers; contested votes.

(a) Upon application of any member or
manager, the Court of Chancery may hear and determine the validity of
any admission, election, appointment, removal or resignation of a
manager of a limited liability company, and the right of any person to
become or continue to be a manager of a limited liability company, and,
in case the right to serve as a manager is claimed by more than 1
person, may determine the person or persons entitled to serve as
managers; and to that end make such order or decree in any such case as
may be just and proper, with power to enforce the production of any
books, papers and records of the limited liability company relating to
the issue. In any such application, the limited liability company shall
be named as a party and service of copies of the application upon the
registered agent of the limited liability company shall be deemed to be
service upon the limited liability company and upon the person or
persons whose right to serve as a manager is contested and upon the
person or persons, if any, claiming to be a manager or claiming the
right to be a manager; and the registered agent shall forward
immediately a copy of the application to the limited liability company
and to the person or persons whose right to serve as a manager is
contested and to the person or persons, if any, claiming to be a
manager or the right to be a manager, in a postpaid, sealed, registered
letter addressed to such limited liability company and such person or
persons at their post-office addresses last known to the registered
agent or furnished to the registered agent by the applicant member or
manager. The Court may make such order respecting further or other
notice of such application as it deems proper under these circumstances.

(b) Upon application of any member or
manager, the Court of Chancery may hear and determine the result of any
vote of members or managers upon matters as to which the members or
managers of the limited liability company, or any class or group of
members or managers, have the right to vote pursuant to the limited
liability company agreement or other agreement or this chapter (other
than the admission, election, appointment, removal or resignation of
managers). In any such application, the limited liability company shall
be named as a party and service of the application upon the registered
agent of the limited liability company shall be deemed to be service
upon the limited liability company, and no other party need be joined
in order for the Court to adjudicate the result of the vote. The Court
may make such order respecting further or other notice of such
application as it deems proper under these circumstances.

(c) As used in this section, the term “manager” refers to a person:

a. Who is a manager as defined in § 18-101(10) of this title; and

b. Whether or not a member of a limited
liability company, who, although not a manager as defined in §
18-101(10) of this title, participates materially in the management of
the limited liability company;

provided however, that the power to elect
or otherwise select or to participate in the election or selection of a
person to be a manager as defined in § 18-101(10) of this title shall
not, by itself, constitute participation in the management of the
limited liability company.

(d) Nothing herein contained limits or
affects the right to serve process in any other manner now or hereafter
provided by law. This section is an extension of and not a limitation
upon the right otherwise existing of service of legal process upon
nonresidents. (69 Del. Laws, c. 260, § 5; 71 Del. Laws, c. 77, § 7; 76
Del. Laws, c. 387, § 2.)

§ 18-111. Interpretation and enforcement of limited liability company agreement.

Any action to interpret, apply or enforce
the provisions of a limited liability company agreement, or the duties,
obligations or liabilities of a limited liability company to the
members or managers of the limited liability company, or the duties,
obligations or liabilities among members or managers and of members or
managers to the limited liability company, or the rights or powers of,
or restrictions on, the limited liability company, members or managers,
may be brought in the Court of Chancery.

As used in this section, the term “manager” refers to a person:

(1) Who is a manager as defined in § 18-101(10) of this title; and

(2) Whether or not a member of a limited
liability company, who, although not a manager as defined in §
18-101(10) of this title, participates materially in the management of
the limited liability company;

provided however, that the power to elect
or otherwise select or to participate in the election or selection of a
person to be a manager as defined in § 18-101(10) of this title shall
not, by itself, constitute participation in the management of the
limited liability company. (69 Del. Laws, c. 260, § 6; 76 Del. Laws, c.
387, § 3.)

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