Delaware, with approximately 2 million active domestic business entities — including most of the nation’s publicly traded companies and companies in the Fortune 500 — is a very important formation state.
Every year Delaware’s legislature amends the statutes governing all of those corporations and unincorporated entities. This checklist summarizes the changes made to Delaware’s corporation, LLC, LP, partnership, and statutory trust laws during the recently completed 2024 legislative session. These bills, among other things:
- Provide that, whether or not set forth in the certificate of incorporation, a corporation has the power to enter into contracts with current or prospective stockholders which may include provisions, among others, by which the corporation may agree to: (a) restrict or prohibit itself from taking certain actions, (b) require the approval or consent of one or more persons before the corporation may take certain actions, (c) covenant that the corporation or one or more persons will take, or refrain from taking certain actions.
- Provide that whenever the corporation law expressly requires the board of directors to approve or take other action with respect to any agreement, instrument or document, that agreement, instrument or document may be approved by the board of directors in final form or substantially final form.
- Provide that parties to an agreement of merger or consolidation may, through express provision in the agreement, specify the penalties or consequences of a party's failure to perform its obligations; that these penalties or consequences may include an obligation to make payments to the other party if the merger or consolidation is not consummated, including damages based on the stockholders’ lost premium; and that parties to an agreement of merger or consolidation may, through express provision in the agreement, appoint one or more persons to serve as the representative of stockholders.
- Permit a certificate of merger or a certificate of ownership and merger to state any amendments to the certificate of formation of a surviving LLC, certificate of limited partnership of a surviving LP, statement of qualification of a surviving LLLP, statement of partnership existence of a surviving partnership, or statement of qualification of a surviving LLP as are desired to be effected by the merger, or to restate such document of the survivor in its entirety.
