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The Delaware General Corporation Law

delaware general corporation law

 

Disputes within corporations and limited liability companies (LLCs) are usually heard in the Delaware Court of Chancery.

 

The court uses judges (called chancellors), not juries, which typically allows for rulings based on issues of fact and law.

 

Below is a brief summary of the Delaware General Corporation Law. This is informational and should not be misconstrued as legal advice. For legal assistance with Delaware General Corporation Law, please consult an attorney:

 

  • §101(a)(b): Any person, partnership, or association can form a corporation as long as their business is lawful

 

  • §102: Defines what is required on the Certificate of Incorporation

 

  • §102(b)(6): Shareholders are not liable for a corporation's debts

 

  • §106: A corporation is considered to be in existence after its Certificate of Incorporation is filed with the Secretary of State

 

  • §109(a): Shareholders have the right to change the corporate bylaws

 

  • §122: Specific powers of the corporation are defined

 

  • §126: Corporations cannot act as banks

 

  • §132(a): Every corporation must maintain a Registered Agent in the state

 

 

  • §141(a): Corporations shall be governed by a Board of Directors or comparable body

 

  • §142(a)(d): Corporations shall have officers, but failure to elect officers will not dissolve the corporation

 

  • §151(a): Corporations may issue stock

 

  • §202(b): Restrictions on transferability of stock cannot be imposed without the shareholder's consent on shares previously issued

 

  • §211(a)(b): Unless Directors are elected by written consent in lieu of an annual meeting, there shall be an annual meeting of shareholders to elect Directors as determined by the corporation bylaws. If a shareholder is unable to be present, the shareholder may vote remotely or by proxy

 

  • §216: At least one-third of shareholders allowed to vote must be present at shareholder meetings in order for the meeting to be considered valid

 

  • §219(a): Stockholders have the right to inspect the stockholder register within 10 days of a stockholder meeting

 

  • §220(b): Shareholders have the right to inspect their corporation's books and record during normal business hours after submitting a written request

 

  • §241(a): A corporation may amend its Certificate of Incorporation before receiving payment for its stock, as long as the amendments are lawful

 

  • §242(b)(1): In order to amend a corporation's Certificate of Incorporation after receiving payment for its stock, a resolution by the Directors must be made. It must then be approved by a majority vote of shareholders

 

  • §251(a): Any two or more corporations may merge

 

  • §262: Shareholders who dissent on a merger have the right to be bought out at a fair market value

 

  • §265(a): Other types of entities (LLCs, statutory trusts, business trusts or associations, partnerships, limited partnerships, etc.) may convert into a Delaware corporation if proper compliance is followed

 

  • §266: Delaware corporations may convert into other types of entities

 

  • §271(a): The sale of a corporation requires majority shareholder approval. If the corporation is non-stock, the sale requires majority member approval

 

  • §275(b): Dissolution of a corporation requires majority shareholder approval

 

  • §277: Corporations may not be dissolved until all Franchise Taxes, including the Franchise Tax for the current year, are paid

 

  • §321(a): Service of legal process upon a corporation will be made by delivering a copy to an officer or Director of the corporation, or its Registered Agent

 

  • §342(a)(3): Close corporations may not have a public offering of stock

 

  • §361-368: Defines the rights and structure of a public benefit corporation

 

  • §371: "Foreign corporation" is defined as a corporation organized under the laws of another state

 

  • §388(b): Non-U.S. entities may become incorporated in the state of Delaware if the proper procedure is followed

 

Ready to form a corporation in Delaware? Please visit our order page—you can be incorporated in minutes. Our staff is also available to assist you via phone (800-345-2677), email or or live chat.

 

 

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