Delaware’s 2025 Business Entity Amendments What You Need to Know.
Amendments to General Corporation Law
Delaware Governor Matthew S. Meyer signed Senate Bill 95 (SB 95) into law on June 30, 2025. The bill modifies Title 8 of the Delaware General Corporation Law (DGCL) and becomes effective August 1, 2025.
SB 95 implements changes to DGCL sections to align with the Delaware Supreme Court’s ruling in Salzberg v. Sciabacucchi, 227 A.3d 102 (DE 2020). This landmark decision establishes, among other provisions, that a certificate of incorporation may address and govern internal corporate claims and additional intra-corporate affairs claims, provided the provision aligns with public policy.
Contents of Certificate of Incorporation and Bylaw Provisions
Current law prohibits both the certificate of incorporation and bylaws from containing provisions that would hold stockholders liable for attorney’s fees or expenses incurred by the corporation or any other party in relation to an internal corporate claim. SB 95 extends this prohibition to include liability for any other claim brought by a stockholder in an action, suit, or proceeding, when acting either as a stockholder or on behalf of the corporation.
Forum Selection
SB 95 broadens DGCL Section 115 beyond internal corporate claims. According to the bill, regarding claims categorized as “intra-corporate affairs,” the certificate of incorporation or bylaws may mandate stockholders to bring such claims exclusively in specified forums or venues when acting as stockholders or on the corporation’s behalf. These claims must pertain to the corporation’s business operations, conduct of affairs, or rights and powers of the corporation, its stockholders, directors, or officers. Such requirements must comply with applicable jurisdictional requirements and ensure stockholders can file claims in at least one Delaware court with proper jurisdiction.
Virtual Office Prohibition for Registered Agent
Under SB 95, a registered agent of a corporation is prohibited from conducting its duties or functions solely through virtual office operations, mail forwarding services, or a combination of both. A virtual office is defined as performing duties and functions exclusively through internet-based or other remote communication methods.
Registered Office in Delaware
Under SB 95, corporations must establish and maintain a registered office in Delaware, though this office need not serve as the corporation’s actual business location within the state. The registered office refers to the Delaware address of the registered agent appointed to receive service of process and fulfill other registered agent responsibilities. The bill eliminates previous provisions that considered principal office or principal place of business as the registered office under specific circumstances, such as documentation listings.
Nullification Provisions
SB 95 expands existing law regarding the correction of previously filed certificates with the Secretary of State by introducing nullification capabilities. Through a certificate of correction, corporations can now nullify previously filed certificates. Such certificates must detail the specific inaccuracy or defect in the original certificate, provide for its nullification, and follow legal requirements for execution and filing. Similar to correction instruments, nullified instruments become effective from the original filing date. For parties experiencing adverse effects, the corrected or nullified instrument takes effect from the date of filing.
Share Fractions
The bill prohibits corporations from issuing bearer form scrip or warrants (certificate-represented) instead of stock fractions. However, corporations may continue issuing registered form scrip or warrants (either certificate-represented or uncertificated) in place of share fractions. This aligns with the Corporate Transparency Act’s prohibition on bearer form certificates.
Merger or Consolidation
SB 95 eliminates one requirement from merger or consolidation certificates. When the surviving or resulting corporation is domestic, the certificate no longer needs to specify the authorized stock of each constituent foreign corporation.
Revocation and Restoration Changes
The new legislation requires two additional elements in certificates of revocation of dissolution or restoration of expired corporations: the original certificate of incorporation’s filing date with the Secretary of State, and the dissolution certificate’s filing date with the Secretary of State.
Revival of Certificate of Incorporation, and Defective Corporate Acts
For certificate of validation filings related to defective corporate acts during periods when a corporation’s incorporation certificate was forfeited or void, SB 95 mandates that all required annual reports, annual franchise taxes, and interest covering the void or forfeited period must be submitted and paid concurrent with the validation certificate filing.
Reinstatement of Foreign Corporation’s Qualification to Do Business
A foreign corporation seeking certificate of reinstatement following forfeiture must now submit all pending annual reports and settle all outstanding fees that would have been required during the period when its qualification to conduct business in Delaware was forfeited.
Annual Franchise Tax Report
The amended legislation requires corporations to specify their business nature in the annual franchise tax form. Additionally, the report must include details about the corporation’s principal place of business. The law clarifies that unless a corporation maintains its primary operations in Delaware and acts as its own registered agent, the principal place of business address cannot be identical to the corporation’s registered office address in Delaware. Furthermore, this principal business location must be distinct from any other registered agent’s address.
Franchise Tax Interest Computation
According to SB 95, submitting a certificate of validation for corporate acts does not reduce or eliminate interest obligations for periods preceding the certificate filing, nor does it qualify the corporation for any refunds. Interest calculations for periods before filing a validation certificate will use the current applicable rate.
The law has eliminated a previous annual franchise tax provision specifically applicable to regulated investment companies.
Refunds
Current law permits corporations to request the Secretary of State to reduce or refund annual franchise taxes, interest, and penalties under specific conditions. The updated legislation specifically prohibits refunds in connection with filing either a certificate of correction or a certificate of validation.
Effective Dates
The majority of the bill’s provisions become effective on August 1, 2025. The provision eliminating the franchise tax rate for investment companies becomes effective for tax years starting January 1, 2026 or later.
Amendments to the Revised Uniform Partnership Act
Virtual Office Prohibition
The legislation prohibits registered agents from conducting their duties or functions solely through virtual offices, mail forwarding services, or a combination of both. A virtual office is defined as performing duties and functions exclusively through internet-based or other remote communication methods.
Nullification
Beyond correcting previously filed certificates with the Secretary of State, a certificate or statement of correction can now nullify these certificates. Such correction statements or certificates must detail the specific inaccuracy or defect, provide for the certificate’s nullification, and follow legal execution and filing requirements.
Ratification or Waiver.
The amended law now stipulates that any action or transaction undertaken by a partner or another individual, whether acting in their personal capacity or representing the partnership, can be subject to ratification or waiver if such act or transaction is deemed void or voidable. This expands upon the previous legislation, which only explicitly addressed actions taken by the partnership itself. Such ratification or waiver may be expressed explicitly or implied through various means, including statements, actions, inaction, or acquiescence by the relevant partners or other individuals. The effectiveness of the ratification or waiver is not contingent upon providing notice of such action (where applicable).
Merger or Consolidation
The revised legislation mandates that in cases of consolidation resulting in a domestic partnership, the certificate of consolidation must include an attachment containing the statement of existence of the resulting domestic partnership.
Foreign Limited Liability Partnerships
The law introduces additional requirements for foreign limited liability partnerships’ qualification statements. These statements must now incorporate comprehensive information including the jurisdiction of formation (whether state, territory, possession, or country), formation date, and a partner’s declaration confirming the partnership’s valid existence as a limited liability partnership under its formation jurisdiction’s laws as of the filing date. The statement must specify the partnership’s partner count specifically at the time when the foreign qualification statement becomes effective. This differs from the previous requirement, which only needed the partner count without reference to the statement’s effectiveness timing.
Annual Tax of Partnership
The legislation provides clarity regarding partnership taxation upon cancellation. When a partnership’s existence statement faces cancellation through filing a statement or certificate under the General Partnership law, the complete annual tax amount for the calendar year in which such statement or certificate becomes effective must be paid in full prior to filing the document.
Amendments to the Revised Uniform Limited Partnership Act
Virtual Office Prohibition for Registered Agent
Under SB 97, registered agents of limited partnerships are prohibited from performing their duties or functions exclusively through virtual offices, mail forwarding services, or a combination thereof. A virtual office is defined as conducting duties and functions solely through internet-based or other remote communication methods.
Service of Process on Partners and Liquidating Trustees
The law has been modified to establish that serving as a general partner in a limited partnership or as a liquidating trustee of a dissolved limited partnership automatically constitutes consent to the appointment of the partnership’s registered agent (or the Secretary of State if no agent exists) as their legal representative for process service. This provision eliminates the need for execution requirements on the limited partnership certificate.
Nullification
Beyond amending previously filed certificates with the Secretary of State, the law now permits the use of correction certificates or statements to nullify prior filings. Such corrective documents must clearly identify the inaccuracy or defect in the original filing, explicitly state the intention to nullify, and follow proper execution and filing procedures. Additionally, a correction certificate can now void a cancellation certificate filed with the Secretary of State before a limited partnership completes its dissolution or winding-up process.
Ratification or Waiver
The amended legislation expands the scope of ratification or waiver provisions. Actions or transactions by partners or other individuals, whether acting in personal or partnership capacity, can be ratified or waived if deemed void or voidable. This broadens the previous scope, which only specifically mentioned partnership actions or partnership agreement matters. Such ratification or waiver may be explicit or implicit, demonstrated through statements, actions, inaction, or acquiescence of relevant parties. The effectiveness of these ratifications or waivers does not depend on providing notice.
Amendment to Certificate Between Dissolution and Winding Up
When someone other than a designated general partner manages a limited partnership’s dissolution, such as liquidating trustees or limited partners, certificates of limited partnership and registered series must be amended to reflect these changes. This ensures transparency in the winding-up process.
Execution Provisions in Winding Up
A newly introduced section addresses certificate execution requirements for dissolved limited partnerships when non-designated general partners handle the winding-up process. All liquidating trustees must sign the certificate, with specific ownership percentage requirements established for limited partners acting as liquidating trustees. Similar provisions apply to registered series, requiring execution by all liquidating trustees when someone not listed as a general partner manages the winding-up. The law also establishes ownership percentage requirements for limited partners executing certificates during the registered series’ winding-up process.
Merger and Consolidation
Under the revised legislation, when a consolidation results in a domestic limited partnership, the statement confirming the existence of the resulting domestic limited partnership must be attached to the consolidation certificate.
Classes and Voting
The new legislation expands partnership agreement amendment procedures by incorporating division of limited partnership provisions and merger and consolidation of registered series provisions. Previously, these procedures only explicitly included merger and consolidation provisions for limited partnerships.
Foreign Limited Partnerships
The law modifies execution requirements for foreign limited partnerships’ documentation. Applications for registration, amendments to foreign status, and foreign cancellation filings no longer require execution specifically by a general partner. These documents, which must be registered with the Secretary of State, can now be executed by any authorized individual.
Annual Tax of Limited Partnerships
The legislation clarifies taxation procedures for limited partnerships undergoing cancellation. When a domestic limited partnership, registered series, or foreign limited partnership registration terminates through a cancellation filing under the LP Law, the complete annual tax amount for the calendar year in which the certificate becomes effective must be paid prior to filing the statement or certificate.
Amendments to the Limited Liability Company Act
Virtual Office Prohibition for Registered Agent
SB 98 introduces restrictions preventing registered agents of limited liability companies from conducting their duties solely through virtual offices, mail forwarding services, or a combination of both. A virtual office is defined as performing duties and functions exclusively through internet-based or other remote communication methods.
Nullification Provisions
The law expands the scope of certificate corrections filed with the Secretary of State to include nullification of previously filed certificates. Such corrections must detail the specific inaccuracy or defect in the certificate, explicitly state the nullification intent, and follow proper execution and filing procedures. Additionally, a cancellation certificate can now nullify a previously filed cancellation certificate if submitted to the Secretary of State before completing the limited liability company’s dissolution or winding up process.
Ratification or Waiver
SB 98 modifies existing law to establish that any action or transaction undertaken by a member, manager, or other individual, whether acting in their personal capacity or representing the limited liability company, can be ratified or waived if the action or transaction is void or voidable. The previous legislation only explicitly mentioned actions by the limited liability company or a limited liability company agreement. Such ratification or waiver may be either explicit or implicit, demonstrated through statements, actions, inaction, or acquiescence by the relevant members, managers, or other individuals. The effectiveness of the ratification or waiver is not contingent upon providing notice (where applicable).
Merger and Consolidation
According to the updated legislation, in cases of consolidation resulting in a domestic limited liability company, the certificate of formation for the resulting domestic limited liability company must be attached to the consolidation certificate.
Classes and Voting
SB 98 enhances limited liability company agreement amendment procedures by incorporating division of limited liability company provisions and merger and consolidation of registered series provisions. Previously, these procedures only explicitly included merger and consolidation provisions for limited liability companies.
Annual Tax of Limited Liability Company and Registered Series
The legislation clarifies taxation procedures for limited liability companies and registered series upon termination. When a domestic limited liability company, registered series, or foreign limited liability company registration ceases through a certificate filing under the LLC law, the complete annual tax amount for the calendar year in which the certificate becomes effective must be paid before filing the certificate.
SB 98 becomes effective on August 1, 2025.
For more information on how these changes may affect you, contact a dedicated Nexa Corporate Solutions Representative for more information.
