Amendments to Delaware's business entity statutes were recently passed that will require most business entities formed or qualified in Delaware to provide their registered agent with the name, business address and business telephone number of a natural person to serve as Communications Contact for the entity. The Communications Contact may be an officer, director, employee, or designated agent of the entity who is then authorized to receive communications from the registered agent. This legislation applies to corporations, limited liability companies, partnerships, and limited partnerships. (This legislation does not apply to Delaware statutory trusts; they are not required to maintain a registered agent because service of process is made on the trustee.) The new law, which becomes effective January 1, 2007, also requires business entities to periodically update this information.
In the past, companies were not required to provide their registered agents with the name of a natural person. Many companies merely designated a title such as Tax Manager or General Counsel as their Compliance Contact. Under Delaware's new law, however, this designation will no longer be sufficient. Companies will need to provide their registered agents with the name, business address and business telephone number of a natural person effective January 1, 2007.
The new legislation also provides that, effective January 1, 2008, Delaware corporations must file a complete annual franchise tax report including (among other things) the names and address of all the corporation's directors as of the report's filing date, as well as the name and address of the officer who signs the report. The amendments require the Secretary of State to declare void the charter of any corporation that fails to file a complete annual franchise tax report.
The new legislation also includes the following changes, which took effect on August 1:
The name of a domestic or qualifying corporation (whether reserved or of record) must be distinguishable from the names of other domestic corporations, partnerships, LPs, LLCs or statutory trusts, unless the person who reserved the name first consents to the use of the name.
Resignation of directors may be made effective upon the happening of future events, coupled with authority to make certain resignations irrevocable, meaning that corporations and individuals can agree on voting standards for electing directors which differ from the plurality default standard.
Certificate of incorporation or bylaws provisions may provide for classification of directors after the provisions are adopted.
A bylaw adopted by a stockholder that prescribes a required vote for election of directors may not be altered or repealed by the board of directors.
A fee of $75 will be charged for a corporate name reservation and for the application of the renewal, transfer or cancellation of a corporate name reservation, where such request has been made through the state's website. No fee will be charged where the reservation or application has been made through a Delaware registered agent. All corporate name reservations expire after the passage of 120 days. A $75 fee will be charged to re-reserve a corporate name before the expiration period, to transfer or to cancel a corporate name reservation.
Andrea B. Unterberger is Associate General Counsel for Corporation Service Company. Reprinted with permission from CSC's Update available online at www.incspot.com/newDElaw. For information about CSC's services or to be added to CSC's mailing list to receive periodic updates on legislation, regulations, public policy advisories and other changes impacting business entities, email CSC at firstname.lastname@example.org.