A Summary Of The New Amendments To The Delaware General Corporation Law
This is post II in a IV post series.
As promised in our previous post, highlights of Delaware’s new corporate legislation are summarized below just after the official Delaware Division of Corporations disclaimer notice:
NOTE: THE FOLLOWING SUMMARY OF 2008 LEGISLATION AFFECTING DELAWARE BUSINESS ENTITY LAWS IS NEITHER AUTHORITATIVE NOR ALL-INCLUSIVE. THIS SUMMARY DOES NOT REPRESENT OFFICIAL POLICY OF THE STATE OF DELAWARE AND HAS BEEN PREPARED ONLY FOR GENERAL INFORMATION PURPOSES AND NOT FOR LEGAL ADVICE.
AMENDMENTS TO THE DELAWARE GENERAL CORPORATION LAW
Section 219 (a) of the Delaware General Corporation Law (DGCL) has been amended to replace the word “inspected” with the word “examined” in order to remove any suggestion that there is an intentional distinction between the right to inspect versus the right to examine the list of eligible voting stockholders at a stockholder meeting. Section 219 (b) has been amended by extending a tradition under the DGCL of expanding the flexibility of the Delaware Court of Chancery to fashion appropriate relief in disputes. Under previous law, if directors willfully neglected or refused to provide access to the stockholder list at a stockholder meeting, the Court’s only sanction was to prevent such directors from standing for election. This year’s amendment eliminates the standard of “willful neglect” and the burden of proof is put on the corporation to prove that a stockholder should not have access to the list. It also allows the Court to fashion other sanctions such as postponing the meeting or voiding the results of an election.
Section 225 has been amended to allow the corporation itself, in addition to stockholders, to bring disputes before the Court of Chancery involving contested votes on matters other than the election of directors or officers.
In our next post, you can review a summary of the amendments relating to Delaware LLC’s, LP’s, and Delaware Statutory Trusts (f/k/a Business Trusts).
- Roundup of the new Delaware Corporate Leglislation
- A Summary Of The New Amendments Relating To The Delaware Alternative Business Entities