Delaware Senate Bill 114, recently enacted and effective as of Aug. 1, includes substantial additions and amendments to the Delaware Limited Liability Company Act (the LLC Act). In addition to several amendments meant to supersede recent case law, these amendments also contained further guidance regarding the operations of a Delaware public benefit LLC. This column examines these amendments, the history behind Delaware’s prominence in the realm of corporate law, and discusses some key differences between LLCs and corporations.
Despite its small size, Delaware has long been the jurisdiction of choice for the formation of many types of business entities. This dates back to the late 19th century where, in an attempt to attract commerce and compete with nearby New Jersey, Delaware enacted its first general incorporation statute. With its comparatively liberal rules relating to incorporation and corporate governance, businesses quickly flocked to Delaware and the state became a national hub of corporate law over the course of the 20th century.