Delaware has approximately 2 million active domestic business entities. A frequently cited reason for Delaware’s preeminent position as a formation state is its modern and flexible business entity statutes.
Keeping track of the changes to these laws is imperative for the people owning, managing, or investing in Delaware entities, as well as the in-house and outside counsel who advise Delaware entities and their management and owners. In this article we review amendments to Delaware’s corporation, corporation franchise tax, limited liability company, partnership, and limited partnership laws that are effective August 1, 2025. (Amendments to Sections 144 and 220 of the General Corporation Law went into effect in March and are described in our article Delaware enacts significant amendments to its corporation law.)
I. Amendments to the General Corporation Law (GCL)
Senate Bill 95 enacted amendments to the GCL (Title 8, Sec. 101 et seq.) The amendments include the following:
Sec. 102 is amended to provide that the certificate of incorporation may not contain a provision imposing liability on a stockholder for the attorney’s fees or expenses of the corporation or any other party in connection with any claim (and not just an internal corporate claim) brought by a stockholder acting in its capacity as stockholder or in the right of the corporation in an action, suit, or proceeding.
Sec. 103 is amended to allow a certificate of correction to nullify (and not just correct) an instrument filed with the Secretary of State that is an inaccurate record of the corporate action or that was defectively or erroneously executed, sealed or acknowledged. The certificate of correction must specify the inaccuracy or defect and provide that the instrument is nullified.
Sec. 109 is amended to provide that the bylaws may not contain a provision imposing liability on a stockholder for the attorney’s fees or expenses of the corporation or any other party in connection with any claim (and not just an internal corporate claim) brought by a stockholder acting in its capacity as stockholder or in the right of the corporation in an action, suit, or proceeding.
Sec. 115 is amended to permit the certificate of incorporation or bylaws to require stockholders, when acting in their capacity as stockholders or in the right of the corporation, to bring claims that are not internal corporate claims only in one or more prescribed forums or venues if the claim relates to the business of the corporation, the conduct of its affairs, or the rights or powers of the corporation or its stockholders, directors or officers, provided (1) the requirement is consistent with applicable jurisdictional requirements and (2) allows a stockholder to bring the claim in at least one court in Delaware that has jurisdiction over the claim.
Sec. 131 is amended to provide that “registered office” means the address of the registered agent located in the state being appointed to accept service of process and otherwise perform the duties of a registered agent. Previous language, which stated that “principal office” or “principal place of business” were deemed to mean the registered office unless the context required otherwise, was deleted.
Sec. 132 is amended to prohibit a registered agent from performing its duties or functions solely through the use of a virtual office, the retention by the registered agent of a mail forwarding service, or both. Virtual office is defined as the performance of duties or functions solely through the internet or other means of remote communication.
Sec. 155 is amended to prohibit a corporation from issuing scrip or warrants in bearer form in lieu of issuing fractional shares of stock.
Sec. 252 is amended to eliminate the requirement that in the case of a merger or consolidation of domestic and foreign corporations where the surviving or resulting corporation is a domestic corporation; the certificate of merger or consolidation has to state the authorized capital stock of each foreign corporation.
Sec. 311 is amended to require a certificate of revocation of dissolution or a certificate of restoration to state the date the original certificate of incorporation was filed with the Secretary of State and the date the certificate of dissolution was filed with the Secretary of State.
Sec. 312 is amended to provide that where a corporation revives its certificate of incorporation that had been forfeited or void and files a certificate of validation relating to a time when the certificate of incorporation was forfeited or void, at the time of filing the certificate of validation the corporation has to file all annual reports and pay all required annual franchise taxes that would have been required during the period the certificate of incorporation was forfeited or void.
Sec. 377 is amended to provide that a foreign corporation filing a certificate of reinstatement after its qualification to do business was forfeited has to file all annual reports and pay all required fees that would have been required during the time its qualification was forfeited.
II. Amendments to Franchise Tax Law (Also in Senate Bill 95)
Senate Bill 95 also enacted amendments to the Franchise Tax Law (Title 8, Sec. 501 et seq.) The amendments include the following:
Sec. 502 is amended to (1) require the annual franchise tax report to state the nature of the corporation’s business and (2) to provide that the location of the principal place of business as stated in the annual franchise report tax shall not be the address of the registered agent (unless the corporation maintains its principal place of business in Delaware and serves as its own registered agent).
Sec. 503 is amended to (1) provide that filing a certificate of validation to ratify one or more defective acts will not reduce the interest due for any period of time before filing the certificate of validation or entitle the corporation to a refund for any period before filing the certificate of validation and (2) to repeal, effective for tax years beginning on or after January 1, 2026, the subsection regarding the alternative franchise tax rate for regulated investment companies.
Sec. 505 is amended to provide that no refund of tax, penalties, or interest will be granted to a corporation in connection with the filing of a certificate of correction or a certificate of validation.
III. Amendments to the Delaware Limited Liability Company Act (DLLCA), Delaware Revised Uniform Limited Partnership Act (DRULPA), and Delaware Revised Uniform Partnership Act (DRUPA)
Senate Bill 98 enacted amendments to DLLCA (Title 6, Sec. 18-101 et seq.) Senate Bill 97 enacted amendments to DRULPA (Title 6, Sec. 17-101 et seq.) Senate Bill 96 enacted amendments to DRUPA (Title 6, Sec. 15-101 et seq.)
A. Amendments applicable to all three alternative entities (LLCs, LPs, and partnerships)
Secs. 18-104, 17-104, and 15-111 are amended to prohibit a registered agent from performing its duties or functions solely through the use of a virtual office, the retention of the registered agent of a mail forwarding service, or both. Virtual office is defined as the performance of duties or functions solely through the internet or other means of remote communication.
Secs. 18-106, 17-106, and 15-202 are amended to (1) provide that the procedure for the ratification or waiver of void or voidable acts or transactions is available for acts or transactions taken by a member, manager, partner or other person, in addition to acts or transactions taken by the LLC, LP, or partnership, (2) to permit the ratification or waiver to be express or implied, including by statements, action, inaction, or acquiescence, and (3) provide that where notice of ratification or waiver is required, the giving of the notice is not a condition to the effectiveness of the ratification or waiver.
Secs. 18-209, 17-211, and 15-902 are amended to provide that in the case of a consolidation where the resulting entity is a domestic LLC, limited partnership, or partnership, the resulting entity’s certificate of formation (in the case of an LLC), certificate of limited partnership (in the case of a limited partnership) or statement of partnership existence (in the case of a partnership) must be attached to the certificate of consolidation.
Secs. 18-211, 17-213, and 15-118 are amended to allow a certificate of correction to nullify (and not just correct) a certificate filed with the Secretary of State that is an inaccurate record of the action taken or that was defectively or erroneously executed, sealed or acknowledged. The certificate of correction must specify the inaccuracy or defect and provide that the certificate is nullified.
Secs. 18-1107, 17-1109, and 15-1208 are amended to provide that when the existence of a domestic LLC, LP, or registered series or the registration of a foreign LLC or LP will cease by the filing of a certificate, or a statement of partnership existence will be cancelled by filing a certificate or statement, the full amount of the annual tax for the calendar year in which the certificate or statement becomes effective is due and payable before the filing of the certificate or statement causing the existence or registration to cease.
B. Amendments applicable to LLCs and LPs only
Secs. 18-203 and 17-203 are amended to provide that the certificate of cancellation filed before the dissolution or the completion of winding up of the LLC or LP can be nullified, as well as corrected, by filing a certificate of correction of the certificate of cancellation.
Secs. 18-302 and 17-302 are amended to provide that an LLC agreement and a partnership agreement may be amended in connection with a division of an LLC or LP and a merger of a registered series of an LLC or LP as is contemplated by the sections of the laws regarding divisions and mergers of registered series.
C. Amendments applicable to LPs only
Sec. 17-109 is amended to provide that a person’s service as a general partner or a liquidating trustee constitutes the person’s consent to the appointment of the LP’s registered agent (or the Secretary of State if none) as the person’s agent for service of process in all civil actions or proceedings brought in Delaware involving or relating to the LP’s business or a violation of the general partner or liquidating trustee’s duty to the LP or its limited partners, and also that it signifies the person’s consent that process when so served will have the same legal force and validity as if served on the person in Delaware.
Sec. 17-202 is amended to provide that if a person who is not shown as a general partner on the certificate of limited partnership of a dissolved LP is winding up its affairs, the certificate of limited partnership must be amended to add the name and business, residence or mailing address of each liquidating trustee - unless it is the limited partners who are the liquidating trustees, in which case the amendment only has to state that the limited partners are winding up the affairs. There is a similar requirement for when a registered series is being wound up by someone not named as a general partner on the certificate of registered series.
Sec. 17-204 is amended to provide that if an LP is dissolved and the person winding up its affairs is not named in the certificate of limited partnership as a general partner, any certificate required to be filed with the Secretary of State and executed by general partners must be signed by all liquidating trustees, provided however, if the limited partners are the liquidating trustees, the certificate may be signed by limited partners who own more than 50% of the then current percentage or other interest in the LP’s profits. There is a similar requirement for a registered series that has dissolved and that is being wound up by a person not listed as a general partner on the certificate of registered series.
Secs. 17-902, 17-905, and 17-906 are amended to provide, respectively, that an application for registration of a foreign limited partnership, a certificate correcting an application for registration of a foreign limited partnership, and a certificate of cancellation of a registration of a foreign limited partnership may be executed by a person authorized to execute the application or certificate on the foreign limited partnership’s behalf. Previously, a general partner was required to execute those documents.
D. Amendment applicable to partnerships only
Sec. 15-1102 is amended to (1) provide that a statement of foreign qualification of a foreign limited liability partnership must contain the formation of jurisdiction, the date of formation, and a statement of a partner that as of the date of filing, the foreign LLP validly exists as an LLP under the laws of its jurisdiction of formation and (2) to clarify that the number of partners that has to be set forth in the statement of foreign qualification must be the number of partners at the time of effectiveness of the statement of foreign qualification.
Conclusion
This article has provided a summary of the amendments to Delaware’s corporation, franchise tax, LLC, LP, and GP laws that are going into effect on August 1, 2025. Please see the bills, which can be accessed from the links below, to view the full text of the amendments.
The bills referred to in this article can be found here:
Senate Bill 95 (GCL) https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocument?legislationId=142081&legislationTypeId=1&docTypeId=2&legislationName=SB95
Senate Bill 98 (LLC) https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocument?legislationId=142069&legislationTypeId=1&docTypeId=2&legislationName=SB98
Senate Bill 97 (LP)
https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocument?legislationId=142080&legislationTypeId=1&docTypeId=2&legislationName=SB97
Senate Bill 96 (GP)
https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocument?legislationId=142079&legislationTypeId=1&docTypeId=2&legislationName=SB96
