CHAPTER 1.03. Limited Liability Companies

• Jurisdiction: United States

1.03. Limited Liability Companies⁵⁹

A limited liability company is formed by the filing of a certificate of formation with the office of the Secretary of State.⁶⁰ The certificate of formation must include the name of the company, which must be a distinguishable name and contain the terms "LLC," "L.L.C.," or "Limited Liability Company."⁶¹ The certificate of formation must also include the name and address of the registered agent and the address of the registered office in the State of Delaware.⁶² The certificate of formation is signed by an authorized person, who need not be a member or manager of the company.⁶³ In addition, formation requires a limited liability company agreement, although that need not be in writing.⁶⁴ There must be at least one member of the company for the company to be formed and continue to exist.⁶⁵

Neither the members nor the managers are personally liable for the obligations of the company unless those persons assume such liabilities.⁶⁶

A limited liability company may be managed by its members, managers, or some combination of members and managers.⁶⁷ Should the limited liability company elect to be managed by one or more managers, the company must specify that in the limited liability company agreement, as the default under the DLLCA is member-management.⁶⁸ Members' voting and other management rights will generally be governed by the limited liability company agreement, which may include different classes of members and other limitations on the particular rights of any individual member.⁶⁹ Similarly, the rights and responsibilities of managers will generally be governed by the limited liability company agreement, which may provide for classes of managers having different rights and responsibilities.⁷⁰

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Notes:

^[59] Delaware Limited Liability Company Act, 6 Del. C. § 18-101 to -112 (2018) (the DLLCA). Special issues with respect to series limited liability companies are addressed in Section 1.07 below.

^[60] Id. § 18-201(a).

^[61] Id. § 18-102.

^[62] Id. § 18-201(a)(2).

^[63] Id. § 18-204(a).

^[64] Id. § 18-101(7).

^[65] Id. § 18-101(6).

^[66] Id. § 18-303.

^[67] Id. § 18-402.

^[68] Id.

^[69] Id. § 18-302.

^[70] Id. § 18-404.