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The State of Delaware has amended its Limited Liability Company Act effective Aug. 1, 2025. Changes to the Delaware limited liability company law are closely followed across the nation because many out-of-state company organizers elect to form their LLCs in Delaware. Delaware’s LLC law also serves as a model for other states’ LLC statutes.
The changes to Delaware’s Limited Liability Company Act (the “LLC Act”) are summarized below.
No Virtual Offices for Registered Agents
The LLC Act was amended to provide that registered agents may not perform their duties solely through the use of a virtual office (that is, through the internet or other means of remote communication), the retention by the agent of a mail forwarding service, or both.
Ratification or Waiver of Void or Voidable Acts or Transactions of Individuals
Section 18-106(e) of the LLC Act provides a safe harbor for the ratification or waiver of void or voidable acts or transactions taken in respect of a Delaware limited liability company. Existing Delaware case law has determined that, as currently drafted, this safe harbor procedure (i) is limited to ratification or waiver of a limited liability company’s own acts, not the acts of its members acting in their individual capacity, and (ii) does not apply to ratification or waiver by conduct.
The amendments to the LLC Act clarify that the procedure for ratification or waiver of void or voidable acts or transactions taken in respect of a limited liability company (i) applies to both acts of the company and acts of members, managers or other persons, whether acting in their individual capacity or on behalf of the company, and (ii) may involve express or implied ratification or waiver, including ratification or waiver by the statements, action, inaction, or acquiescence of or by the relevant members, managers, or other persons.
The amendment also adds additional language to the LLC Act to clarify that, in circumstances where §18-106(e) of the LLC Act requires that notification of a ratification or waiver be given, the giving of such notice is not a condition to the effectiveness of the ratification or waiver.
Certificates of Correction — Nullification of Previously Filed Certificates
Amendments to certain sections of the LLC Act relating to Certificates of Correction to clarify that, in addition to correcting a previously filed certificate, a Certificate of Correction may also be used to nullify a previously filed certificate by specifying the inaccuracy or defect in the previously filed certificate and stating that such previously filed certificate is nullified or void.
Certificates of Consolidation — Attachments
The section of the LLC Act relating to Certificates of Consolidation was amended to add a new provision that provides that, in the event of a consolidation where the resulting entity from the consolidation is a Delaware LLC, the Certificate of Formation of such resulting LLC must be attached to the Certificate of Consolidation.
Amendments to Company Agreement for (i) Division of LLC or (ii) Merger of Registered Series
The existing LLC Act provides that an LLC’s company agreement may be amended in connection with a merger or consolidation of the LLC. The LLC Act was amended to provide that an LLC’s company agreement may also be amended in connection with (i) a division of the LLC, or (ii) a merger or consolidation of a registered series.
Payment of Annual Taxes Prior to Filing Certificate of Cancellation
Existing provisions of the LLC Act specify that annual taxes for an LLC shall be paid upon the cancellation of the LLC’s Certificate of Formation. The LLC Act was amended to clarify that, when an LLC is terminated by the filing of a Certificate of Cancellation, the full amount of annual taxes for the year in which the Certificate of Cancellation is filed must be paid by the LLC prior to the filing of the Certificate of Cancellation.
Ethan Lennon is an associate in the Business Transactions department of Cantey Hanger LLP. He is a graduate of SMU Dedman School of Law and Texas A&M University. He focuses his practice on business formation, mergers and acquisitions, trademark registration and licensing, and other business transactions. For more information call 817-877-2835 or visit www.canteyhanger.com.