Delaware – Limited Liability Company Act – Miscellaneous

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§ 18-1101. | § 18-1102. | § 18-1103. | § 18-1104. | § 18-1105. | § 18-1106. | § 18-1107. | § 18-1108. | § 18-1109.

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 18. LIMITED LIABILITY COMPANY ACT

Subchapter XI. Miscellaneous

§ 18-1101. Construction and application of chapter and limited liability company agreement.

(a) The rule that statutes in derogation
of the common law are to be strictly construed shall have no
application to this chapter.

(b) It is the policy of this chapter to
give the maximum effect to the principle of freedom of contract and to
the enforceability of limited liability company agreements.

(c) To the extent that, at law or in
equity, a member or manager or other person has duties (including
fiduciary duties) to a limited liability company or to another member
or manager or to another person that is a party to or is otherwise
bound by a limited liability company agreement, the member’s or
manager’s or other person’s duties may be expanded or restricted or
eliminated by provisions in the limited liability company agreement;
provided, that the limited liability company agreement may not
eliminate the implied contractual covenant of good faith and fair
dealing.

(d) Unless otherwise provided in a
limited liability company agreement, a member or manager or other
person shall not be liable to a limited liability company or to another
member or manager or to another person that is a party to or is
otherwise bound by a limited liability company agreement for breach of
fiduciary duty for the member’s or manager’s or other person’s good
faith reliance on the provisions of the limited liability company
agreement.

(e) A limited liability company agreement
may provide for the limitation or elimination of any and all
liabilities for breach of contract and breach of duties (including
fiduciary duties) of a member, manager or other person to a limited
liability company or to another member or manager or to another person
that is a party to or is otherwise bound by a limited liability company
agreement; provided, that a limited liability company agreement may not
limit or eliminate liability for any act or omission that constitutes a
bad faith violation of the implied contractual covenant of good faith
and fair dealing.

(f) Unless the context otherwise
requires, as used herein, the singular shall include the plural and the
plural may refer to only the singular. The use of any gender shall be
applicable to all genders. The captions contained herein are for
purposes of convenience only and shall not control or affect the
construction of this chapter.

(g) Sections 9-406 and 9-408 of this
title do not apply to any interest in a limited liability company,
including all rights, powers and interests arising under a limited
liability company agreement or this chapter. This provision prevails
over §§ 9-406 and 9-408 of this title. (68 Del. Laws, c. 434, § 1; 69
Del. Laws, c. 260, § 35; 72 Del. Laws, c. 389, § 26; 73 Del. Laws, c.
221, § 1; 74 Del. Laws, c. 275, §§ 13, 14.)

§ 18-1102. Short title.

This chapter may be cited as the “Delaware Limited Liability Company Act.” (68 Del. Laws, c. 434, § 1.)

§ 18-1103. Severability.

If any provision of this chapter or its
application to any person or circumstances is held invalid, the
invalidity does not affect other provisions or applications of the
chapter which can be given effect without the invalid provision or
application, and to this end, the provisions of this chapter are
severable. (68 Del. Laws, c. 434, § 1.)

§ 18-1104. Cases not provided for in this chapter.

In any case not provided for in this
chapter, the rules of law and equity, including the law merchant, shall
govern. (68 Del. Laws, c. 434, § 1.)

§ 18-1105. Fees.

(a) No document required to be filed
under this chapter shall be effective until the applicable fee required
by this section is paid. The following fees shall be paid to and
collected by the Secretary of State for the use of the State of
Delaware:

(1) Upon the receipt for filing of an
application for reservation of name, an application for renewal of
reservation or a notice of transfer or cancellation of reservation
pursuant to § 18-103(b) of this title, a fee in the amount of $75.

(2) Upon the receipt for filing of a
certificate under § 18-104(b) of this title, a fee in the amount of
$50, upon the receipt for filing of a certificate under § 18-104(c) of
this title, a fee in the amount of $50 and a further fee of $2 for each
limited liability company affected by such certificate, and upon the
receipt for filing of a certificate under § 18-104(d) of this title, a
fee in the amount of $2.50.

(3) Upon the receipt for filing of a
certificate of limited liability company domestication under § 18-212
of this title, a certificate of transfer or a certificate of transfer
and domestic continuance under § 18-213 of this title, a certificate of
conversion to limited liability company under § 18-214 of this title, a
certificate of conversion to a non-Delaware entity under § 18-216 of
this title, a certificate of formation under § 18-201 of this title, a
fee in the amount of $70; and upon the receipt for filing of a
certificate of amendment under § 18-202 of this title, a certificate of
cancellation under § 18-203 of this title, a certificate of merger or
consolidation under § 18-209 of this title, a restated certificate of
formation under § 18-208 of this title, a certificate of amendment of a
certificate with a future effective date or time under § 18-206(c) of
this title, a certificate of termination of a certificate with a future
effective date or time under § 18-206(c) of this title, a certificate
of correction under § 18-211 of this title, or a certificate of revival
under § 18-1109 of this title, a fee in the amount of $80.

(4) For certifying copies of any paper on
file as provided for by this chapter, a fee in the amount of $30 for
each copy certified.

(5) The Secretary of State may issue
photocopies or electronic image copies of instruments on file, as well
as instruments, documents and other papers not on file, and for all
such photocopies or electronic image copies, whether certified or not,
a fee of $10 shall be paid for the 1st page and $2 for each additional
page. The Secretary of State may also issue microfiche copies of
instruments on file as well as instruments, documents and other papers
not on file, and for each such microfiche a fee of $2 shall be paid
therefor. Notwithstanding the State of Delaware’s Freedom of
Information Act [Chapter 100 of Title 29] or other provision of this
Code granting access to public records, the Secretary of State shall
issue only photocopies, microfiche or electronic image copies of
records in exchange for the fees described above.

(6) Upon the receipt for filing of an
application for registration as a foreign limited liability company
under § 18-902 of this title, a certificate under § 18-905 of this
title or a certificate of cancellation under § 18-906 of this title, a
fee in the amount of $100.

(7) Upon the receipt for filing of a
certificate under § 18-904(c) of this title, a fee in the amount of
$50, upon the receipt for filing of a certificate under § 18-904(d) of
this title, a fee in the amount of $50 and a further fee of $2 for each
foreign limited liability company affected by such certificate, and
upon the receipt for filing of a certificate under § 18-904(e) of this
title, a fee in the amount of $2.50.

(8) For preclearance of any document for filing, a fee in the amount of $250.

(9) For preparing and providing a written report of a record search, a fee in the amount of $30.

(10) For issuing any certificate of the
Secretary of State, including but not limited to a certificate of good
standing, other than a certification of a copy under paragraph (4) of
this subsection, a fee in the amount of $30, except that for issuing
any certificate of the Secretary of State that recites all of a limited
liability company’s filings with the Secretary of State, a fee of $125
shall be paid for each such certificate.

(11) For receiving and filing and/or
indexing any certificate, affidavit, agreement or any other paper
provided for by this chapter, for which no different fee is
specifically prescribed, a fee in the amount of $50.

(12) The Secretary of State may in the
Secretary of State’s own discretion charge a fee of $60 for each check
received for payment of any fee that is returned due to insufficient
funds or the result of a stop payment order.

(b) In addition to those fees charged
under subsection (a) of this section, there shall be collected by and
paid to the Secretary of State the following:

(1) For all services described in
subsection (a) of this section that are requested to be completed
within 1 hour on the same day as the day of the request, an additional
sum of up to $1,000 and for all services described in subsection (a) of
this section that are requested to be completed within 2 hours on the
same day of the request, an additional sum of up to $500;

(2) For all services described in
subsection (a) of this section that are requested to be completed
within the same day as the day of the request, an additional sum of up
to $200; and

(3) For all services described in
subsection (a) of this section that are requested to be completed
within a 24-hour period from the time of the request, an additional sum
of up to $100.

The Secretary of State shall establish
(and may from time to time amend) a schedule of specific fees payable
pursuant to this subsection.

(c) The Secretary of State may in his or
her discretion permit the extension of credit for the fees required by
this section upon such terms as the secretary shall deem to be
appropriate.

(d) The Secretary of State shall retain
from the revenue collected from the fees required by this section a sum
sufficient to provide at all times a fund of at least $500, but not
more than $1,500, from which the secretary may refund any payment made
pursuant to this section to the extent that it exceeds the fees
required by this section. The funds shall be deposited in a financial
institution which is a legal depository of State of Delaware moneys to
the credit of the Secretary of State and shall be disbursable on order
of the Secretary of State.

(e) Except as provided in this section,
the fees of the Secretary of State shall be as provided in § 2315 of
Title 29. (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, §§ 36, 37;
70 Del. Laws, c. 75, §§ 23-27; 70 Del. Laws, c. 186, § 1; 70 Del. Laws,
c. 360, § 16; 71 Del. Laws, c. 77, § 34; 72 Del. Laws, c. 129, § 16; 73
Del. Laws, c. 83, § 19; 74 Del. Laws, c. 52, §§ 22-29; 74 Del. Laws, c.
85, § 16; 74 Del. Laws, c. 119, § 2; 76 Del. Laws, c. 105, § 35.)

§ 18-1106. Reserved power of State of Delaware to alter or repeal chapter.

All provisions of this chapter may be
altered from time to time or repealed and all rights of members and
managers are subject to this reservation. Unless expressly stated to
the contrary in this chapter, all amendments of this chapter shall
apply to limited liability companies and members and managers whether
or not existing as such at the time of the enactment of any such
amendment. (68 Del. Laws, c. 434, § 1; 72 Del. Laws, c. 129, § 17.)

§ 18-1107. Taxation of limited liability companies.

(a) For purposes of any tax imposed by
the State of Delaware or any instrumentality, agency or political
subdivision of the State of Delaware, a limited liability company
formed under this chapter or qualified to do business in the State of
Delaware as a foreign limited liability company shall be classified as
a partnership unless classified otherwise for federal income tax
purposes, in which case the limited liability company shall be
classified in the same manner as it is classified for federal income
tax purposes. For purposes of any tax imposed by the State of Delaware
or any instrumentality, agency or political subdivision of the State of
Delaware, a member or an assignee of a member of a limited liability
company formed under this chapter or qualified to do business in the
State of Delaware as a foreign limited liability company shall be
treated as either a resident or nonresident partner unless classified
otherwise for federal income tax purposes, in which case the member or
assignee of a member shall have the same status as such member or
assignee of a member has for federal income tax purposes.

(b) Every domestic limited liability
company and every foreign limited liability company registered to do
business in the State of Delaware shall pay an annual tax, for the use
of the State of Delaware, in the amount of $250.

(c) The annual tax shall be due and
payable on the first day of June following the close of the calendar
year or upon the cancellation of a certificate of formation. The
Secretary of State shall receive the annual tax and pay over all taxes
collected to the Department of Finance of the State of Delaware. If the
annual tax remains unpaid after the due date, the tax shall bear
interest at the rate of 1 and one-half percent for each month or
portion thereof until fully paid.

(d) The Secretary of State shall, at
least 60 days prior to the first day of June of each year, cause to be
mailed to each domestic limited liability company and each foreign
limited liability company required to comply with the provisions of
this section in care of its registered agent in the State of Delaware
an annual statement for the tax to be paid hereunder.

(e) In the event of neglect, refusal or
failure on the part of any domestic limited liability company or
foreign limited liability company to pay the annual tax to be paid
hereunder on or before the 1st day of June in any year, such domestic
limited liability company or foreign limited liability company shall
pay the sum of $100 to be recovered by adding that amount to the annual
tax and such additional sum shall become a part of the tax and shall be
collected in the same manner and subject to the same penalties.

(f) In case any domestic limited
liability company or foreign limited liability company shall fail to
pay the annual tax due within the time required by this section, and in
case the agent in charge of the registered office of any domestic
limited liability company or foreign limited liability company upon
whom process against such domestic limited liability company or foreign
limited liability company may be served shall die, resign, refuse to
act as such, remove from the State of Delaware or cannot with due
diligence be found, it shall be lawful while default continues to serve
process against such domestic limited liability company or foreign
limited liability company upon the Secretary of State. Such service
upon the Secretary of State shall be made in the manner and shall have
the effect stated in § 18-105 of this title in the case of a domestic
limited liability company and § 18-910 of this title in the case of a
foreign limited liability company and shall be governed in all respects
by said sections.

(g) The annual tax shall be a debt due
from a domestic limited liability company or foreign limited liability
company to the State of Delaware, for which an action at law may be
maintained after the same shall have been in arrears for a period of 1
month. The tax shall also be a preferred debt in the case of insolvency.

(h) A domestic limited liability company
or foreign limited liability company that neglects, refuses or fails to
pay the annual tax when due shall cease to be in good standing as a
domestic limited liability company or registered as a foreign limited
liability company in the State of Delaware.

(i) A domestic limited liability company
that has ceased to be in good standing or a foreign limited liability
company that has ceased to be registered by reason of the failure to
pay an annual tax shall be restored to and have the status of a
domestic limited liability company in good standing or a foreign
limited liability company that is registered in the State of Delaware
upon the payment of the annual tax and all penalties and interest
thereon for each year for which such domestic limited liability company
or foreign limited liability company neglected, refused or failed to
pay an annual tax.

(j) On the motion of the Attorney General
or upon request of the Secretary of State, whenever any annual tax due
under this chapter from any domestic limited liability company or
foreign limited liability company shall have remained in arrears for a
period of 3 months after the tax shall have become payable, the
Attorney General may apply to the Court of Chancery, by petition in the
name of the State of Delaware, on 5 days’ notice to such domestic
limited liability company or foreign limited liability company, which
notice may be served in such manner as the Court may direct, for an
injunction to restrain such domestic limited liability company or
foreign limited liability company from the transaction of any business
within the State of Delaware or elsewhere, until the payment of the
annual tax, and all penalties and interest due thereon and the cost of
the application which shall be fixed by the Court. The Court of
Chancery may grant the injunction, if a proper case appears, and upon
granting and service of the injunction, such domestic limited liability
company or foreign limited liability company thereafter shall not
transact any business until the injunction shall be dissolved.

(k) A domestic limited liability company
that has ceased to be in good standing by reason of its neglect,
refusal or failure to pay an annual tax shall remain a domestic limited
liability company formed under this chapter. The Secretary of State
shall not accept for filing any certificate (except a certificate of
resignation of a registered agent when a successor registered agent is
not being appointed) required or permitted by this chapter to be filed
in respect of any domestic limited liability company or foreign limited
liability company which has neglected, refused or failed to pay an
annual tax, and shall not issue any certificate of good standing with
respect to such domestic limited liability company or foreign limited
liability company, unless or until such domestic limited liability
company or foreign limited liability company shall have been restored
to and have the status of a domestic limited liability company in good
standing or a foreign limited liability company duly registered in the
State of Delaware.

(l) A domestic limited liability company
that has ceased to be in good standing or a foreign limited liability
company that has ceased to be registered in the State of Delaware by
reason of its neglect, refusal or failure to pay an annual tax may not
maintain any action, suit or proceeding in any court of the State of
Delaware until such domestic limited liability company or foreign
limited liability company has been restored to and has the status of a
domestic limited liability company or foreign limited liability company
in good standing or duly registered in the State of Delaware. An
action, suit or proceeding may not be maintained in any court of the
State of Delaware by any successor or assignee of such domestic limited
liability company or foreign limited liability company on any right,
claim or demand arising out the transaction of business by such
domestic limited liability company after it has ceased to be in good
standing or a foreign limited liability company that has ceased to be
registered in the State of Delaware until such domestic limited
liability company or foreign limited liability company, or any person
that has acquired all or substantially all of its assets, has paid any
annual tax then due and payable, together with penalties and interest
thereon.

(m) The neglect, refusal or failure of a
domestic limited liability company or foreign limited liability company
to pay an annual tax shall not impair the validity on any contract,
deed, mortgage, security interest, lien or act or such domestic limited
liability company or foreign limited liability company or prevent such
domestic limited liability company or foreign limited liability company
from defending any action, suit or proceeding with any court of the
State of Delaware.

(n) A member or manager of a domestic
limited liability company or foreign limited liability company is not
liable for the debts, obligations or liabilities of such domestic
limited liability company or foreign limited liability company solely
by reason of the neglect, refusal or failure of such domestic limited
zliability company or foreign limited liability company to pay an
annual tax or by reason of such domestic limited liability company or
foreign limited liability company ceasing to be in good standing or
duly registered. (68 Del. Laws, c. 434, § 1; 69 Del. Laws, c. 260, §§
38, 39; 70 Del. Laws, c. 75, § 28; 70 Del. Laws, c. 186, § 1; 71 Del.
Laws, c. 341, § 18; 72 Del. Laws, c. 129, § 18; 74 Del. Laws, c. 52, §§
30, 31; 76 Del. Laws, c. 287, § 3.)

§ 18-1108. Cancellation of certificate of formation for failure to pay taxes.

(a) The certificate of formation of a
domestic limited liability company shall be canceled if the domestic
limited liability company shall fail to pay the annual tax due under §
18-1107 of this title for a period of 3 years from the date it is due,
such cancellation to be effective on the third anniversary of such due
date.

(b) A list of those domestic limited
liability companies whose certificates of formation were canceled on
June 1 of such calendar year pursuant to § 18-1108(a) of this title
shall be filed in the office of the Secretary of State. On or before
October 31 of each calendar year, the Secretary of State shall publish
such list on the Internet or on a similar medium for a period of 1 week
and shall advertise the website or other address where such list can be
accessed in at least 1 newspaper of general circulation in the State of
Delaware. (70 Del. Laws, c. 75, § 29; 73 Del. Laws, c. 295, § 11; 76
Del. Laws, c. 105, § 36.)

§ 18-1109. Revival of domestic limited liability company.

(a) A domestic limited liability company
whose certificate of formation has been canceled pursuant to §
18-104(d) or § 18-104(i)(4) or § 18-1108(a) of this title may be
revived by filing in the office of the Secretary of State a certificate
of revival accompanied by the payment of the fee required by §
18-1105(a)(3) of this title and payment of the annual tax due under §
18-1107 of this title and all penalties and interest thereon for each
year for which such domestic limited liability company neglected,
refused or failed to pay such annual tax, including each year between
the cancellation of its certificate of formation and its revival. The
certificate of revival shall set forth:

(1) The name of the limited liability
company at the time its certificate of formation was canceled and, if
such name is not available at the time of revival, the name under which
the limited liability company is to be revived;

(2) The date of filing of the original certificate of formation of the limited liability company;

(3) The address of the limited liability
company’s registered office in the State of Delaware and the name and
address of the limited liability company’s registered agent in the
State of Delaware;

(4) A statement that the certificate of
revival is filed by 1 or more persons authorized to execute and file
the certificate of revival to revive the limited liability company; and

(5) Any other matters the persons executing the certificate of revival determine to include therein.

(b) The certificate of revival shall be
deemed to be an amendment to the certificate of formation of the
limited liability company, and the limited liability company shall not
be required to take any further action to amend its certificate of
formation under § 18-202 of this title with respect to the matters set
forth in the certificate of revival.

(c) Upon the filing of a certificate of
revival, a limited liability company shall be revived with the same
force and effect as if its certificate of formation had not been
canceled pursuant to § 18-104(d) or § 18-104(i)(4) or § 18-1108(a) of
this title. Such revival shall validate all contracts, acts, matters
and things made, done and performed by the limited liability company,
its members, managers, employees and agents during the time when its
certificate of formation was canceled pursuant to § 18-104(d) or §
18-104(i)(4) or § 18-1108(a) of this title, with the same force and
effect and to all intents and purposes as if the certificate of
formation had remained in full force and effect. All real and personal
property, and all rights and interests, which belonged to the limited
liability company at the time its certificate of formation was canceled
pursuant to § 18-104(d) or § 18-104(i)(4) or § 18-1108(a) of this title
or which were acquired by the limited liability company following the
cancellation of its certificate of formation pursuant to § 18-104(d) or
§ 18-104(i)(4) or § 18-1108(a) of this title, and which were not
disposed of prior to the time of its revival, shall be vested in the
limited liability company after its revival as fully as they were held
by the limited liability company at, and after, as the case may be, the
time its certificate of formation was canceled pursuant to § 18-104(d)
or § 18-104(i)(4) or § 18-1108(a) of this title. After its revival, the
limited liability company shall be as exclusively liable for all
contracts, acts, matters and things made, done or performed in its name
and on its behalf by its members, managers, employees and agents prior
to its revival as if its certificate of formation had at all times
remained in full force and effect. (70 Del. Laws, c. 75, § 30; 75 Del.
Laws, c. 317, §§ 36, 37.)

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