Delaware – Limited Liability Company Act – Managers

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§ 18-401. | § 18-402. | § 18-403. | § 18-404. | § 18-405. | § 18-406. | § 18-407.

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 18. LIMITED LIABILITY COMPANY ACT

Subchapter IV. Managers

§ 18-401. Admission of managers.

A person may be named or designated as a
manager of the limited liability company as provided in § 18-101(10) of
this title. (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, § 23.)

§ 18-402. Management of limited liability company.

Unless otherwise provided in a limited
liability company agreement, the management of a limited liability
company shall be vested in its members in proportion to the then
current percentage or other interest of members in the profits of the
limited liability company owned by all of the members, the decision of
members owning more than 50 percent of the said percentage or other
interest in the profits controlling; provided however, that if a
limited liability company agreement provides for the management, in
whole or in part, of a limited liability company by a manager, theA manager of a limited liability company
may make contributions to the limited liability company and share in
the profits and losses of, and in distributions from, the limited
liability company as a member.
management of the limited liability company, to the extent so provided,
shall be vested in the manager who shall be chosen in the manner
provided in the limited liability company agreement. The manager shall
also hold the offices and have the responsibilities accorded to the
manager by or in the manner provided in a limited liability company
agreement. Subject to § 18-602 of this title, a manager shall cease to
be a manager as provided in a limited liability company agreement. A
limited liability company may have more than 1 manager. Unless
otherwise provided in a limited liability company agreement, each
member and manager has the authority to bind the limited liability
company. (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, § 24; 70
Del. Laws, c. 75, § 19; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c.
341, § 12; 72 Del. Laws, c. 129, § 11.)

§ 18-403. Contributions by a manager.

A person who is both a manager and a
member has the rights and powers, and is subject to the restrictions
and liabilities, of a manager and, except as provided in a limited
liability company agreement, also has the rights and powers, and is
subject to the restrictions and liabilities, of a member to the extent
of the manager’s participation in the limited liability company as a
member. (68 Del. Laws, c. 434, § 1; 70 Del. Laws, c. 186, § 1.)

§ 18-404. Classes and voting.

(a) A limited liability company agreement
may provide for classes or groups of managers having such relative
rights, powers and duties as the limited liability company agreement
may provide, and may make provision for the future creation in the
manner provided in the limited liability company agreement of
additional classes or groups of managers having such relative rights,
powers and duties as may from time to time be established, including
rights, powers and duties senior to existing classes and groups of
managers. A limited liability company agreement may provide for the
taking of an action, including the amendment of the limited liability
company agreement, without the vote or approval of any manager or class
or group of managers, including an action to create under the
provisions of the limited liability company agreement a class or group
of limited liability company interests that was not previously
outstanding.

(b) A limited liability company agreement
may grant to all or certain identified managers or a specified class or
group of the managers the right to vote, separately or with all or any
class or group of managers or members, on any matter. Voting by
managers may be on a per capita, number, financial interest, class,
group or any other basis.

(c) A limited liability company agreement
may set forth provisions relating to notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
manager or class or group of managers, waiver of any such notice,
action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy, or any other
matter with respect to the exercise of any such right to vote.

(d) Unless otherwise provided in a
limited liability company agreement, meetings of managers may be held
by means of conference telephone or other communications equipment by
means of which all persons participating in the meeting can hear each
other, and participation in a meeting pursuant to this subsection shall
constitute presence in person at the meeting. Unless otherwise provided
in a limited liability company agreement, on any matter that is to be
voted on, consented to or approved by managers, the managers may take
such action without a meeting, without prior notice and without a vote
if a consent or consents in writing, setting forth the action so taken,
shall be signed by the managers having not less than the minimum number
of votes that would be necessary to authorize or take such action at a
meeting at which all managers entitled to vote thereon were present and
voted. Unless otherwise provided in a limited liability company
agreement, on any matter that is to be voted on by managers, the
managers may vote in person or by proxy, and such proxy may be granted
in writing, by means of electronic transmission or as otherwise
permitted by applicable law. Unless otherwise provided in a limited
liability company agreement, a consent transmitted by electronic
transmission by a manager or by a person or persons authorized to act
for a manager shall be deemed to be written and signed for purposes of
this subsection. For purposes of this subsection, the term “electronic
transmission” means any form of communication not directly involving
the physical transmission of paper that creates a record that may be
retained, retrieved and reviewed by a recipient thereof and that may be
directly reproduced in paper form by such a recipient through an
automated process. (68 Del. Laws, c. 434, § 1; 71 Del. Laws, c. 77, §
27; 71 Del. Laws, c. 341, § 13; 72 Del. Laws, c. 389, § 22; 73 Del.
Laws, c. 83, § 17; 75 Del. Laws, c. 317, § 34.)

§ 18-405. Remedies for breach of limited liability company agreement by manager.

A limited liability company agreement may provide that:

(1) A manager who fails to perform in
accordance with, or to comply with the terms and conditions of, the
limited liability company agreement shall be subject to specified
penalties or specified consequences; and

(2) At the time or upon the happening of
events specified in the limited liability company agreement, a manager
shall be subject to specified penalties or specified consequences. (68
Del. Laws, c. 434, § 1.)

§ 18-406. Reliance on reports and information by member or manager.

A member, manager or liquidating trustee
of a limited liability company shall be fully protected in relying in
good faith upon the records of the limited liability company and upon
information, opinions, reports or statements presented by another
manager, member or liquidating trustee, an officer or employee of the
limited liability company, or committees of the limited liability
company, members or managers, or by any other person as to matters the
member, manager or liquidating trustees reasonably believes are within
such other person’s professional or expert competence, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits or losses of the limited liability
company, or the value and amount of assets or reserves or contracts,
agreements or other undertakings that would be sufficient to pay claims
and obligations of the limited liability company or to make reasonable
provision to pay such claims and obligations, or any other facts
pertinent to the existence and amount of assets from which
distributions to members or creditors might properly be paid. (68 Del.
Laws, c. 434, § 1; 75 Del. Laws, c. 51, § 8.)

§ 18-407. Delegation of rights and powers to manage.

Unless otherwise provided in the limited
liability company agreement, a member or manager of a limited liability
company has the power and authority to delegate to 1 or more other
persons the member’s or manager’s, as the case may be, rights and
powers to manage and control the business and affairs of the limited
liability company, including to delegate to agents, officers and
employees of a member or manager or the limited liability company, and
to delegate by a management agreement or another agreement with, or
otherwise to, other persons. Unless otherwise provided in the limited
liability company agreement, such delegation by a member or manager of
a limited liability company shall not cause the member or manager to
cease to be a member or manager, as the case may be, of the limited
liability company or cause the person to whom any such rights and
powers have been delegated to be a member or manager, as the case may
be, of the limited liability company. (69 Del. Laws, c. 260, § 25; 71
Del. Laws, c. 77, § 28; 73 Del. Laws, c. 295, § 8.)

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