A limited liability company is a business type with the legal features of both a partnership and corporation. The owners of an LLC are referred to as "members," and each member's personal assets are generally protected from the company's creditors. Delaware law does not require an LLC to have an operating agreement -- a resolution that sets forth all of the LLC's internal operating procedures -- but does permit an existing agreement to govern some of the LLC's affairs.
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A person forming an LLC in Delaware must chose a name that meets the requirements under §18-102 of the Delaware Code. The company name cannot be the same as or very similar to another business registered in the state, and must include "Limited Liability Company," "LLC" or "L.L.C." as part of the name. Delaware permits an LLC to use all or part of a member's name in the company name, and some terms that are not allowed in other states -- like "trust" and "institute," for example -- are acceptable in Delaware.
Registered Office and Agent
A Delaware LLC must have an office location in the state registered with the secretary of state, but the office does not have to be an active business location. An LLC must have a registered agent, a person or business designated to accept legal notices on behalf of the company. A person must be a resident of Delaware to act as a registered agent, and any business acting as an agent must be in good standing with the state, as well as have an office located within the state of Delaware. A Delaware LLC can act as its own registered agent.
Certificate of Formation
A Certificate of Formation must be filed with the Delaware Secretary of State for an LLC to legally conduct business, as dictated in §18-201 of the code. The certificate includes the name and registered office address of the LLC, and the name and address of the registered agent. Delaware allows an LLC to insert additional information into the certificate if the organizing members deem the action necessary. The certificate may be amended for any reasonable purpose at any time by filing a Certificate of Amendment with the secretary of state.
The distribution of the LLC's profit, income and assets is governed by the operating agreement in Delaware. However, as cited in §18-607 of the code, a distribution cannot be made to a member in an amount that would render the LLC unable to pay its other creditors. A member who takes a distribution in violation of the law is personally liable to the company if he knew the distribution would render the company insolvent.
Dissolution, or the legal end of the business, may occur by a date or event specified in the operating agreement or formation certificate. It can come into effect upon a passing vote by members -- as defined in the agreement -- or by court order, as set forth in §18-801 of the code. An LLC may be dissolved if there are no members, unless the operating agreement provides for such an event. If it's dissolving, the company must pay its creditors before it pays members.