Delaware has amended the Delaware LLC Act, effective as of August 2, 2010. 77 Del. Laws ch. 287 (June 10, 2010). One of the most important changes is to section 18-101(7), which defines “limited liability company agreement.” Although that section had specified that an LLC agreement could be “written or oral,” in Olson v. Halverson, 986 A.2d 1150 (Del. 2009), the Delaware Supreme Court had ruled that LLC agreements are subject to the Statute of Frauds. The amendment bluntly overturns Olson:
A limited liability company agreement is not subject to any statute of frauds (including § 2714 of this title).
77 Del. Laws ch. 287, § 1.
As one correspondent asked me: what makes LLC agreements more special than other contracts? I suppose that the Delaware legislature must believe in
- the inherent honesty of small business owners and investors,
- the trustworthiness of their memories, and
- the eerie consistency of those memories!
posted by Gary Rosin