Delaware Limited Liability Corporation Act
A limited liability company is a business that exists independently of its owner or owners. This means the LLC can own property that does not belong to its individual shareholders, and the company can sue or someone can sue it independently of the shareholders. Many businesses register as LLCs in Delaware because the state does not charge income tax on the earnings of LLCs registered there. The Delaware Limited Liability Company Act regulates the formation and organization of LLCs created and registered in the state.
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Certificate of Formation
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To form an LLC in Delaware, you must file a certificate of formation with the office of the secretary of state. The certificate must contain the name of the LLC and the name of its registered office. You must nominate a registered agent responsible for process-serving. If someone sues the LLC, or needs to serve other documents and notices on the LLC, they serve the registered agent. The certificate of formation must contain the name and address of the registered agent.
Management
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According to section 18.402 of the act, members of an LLC have responsibility for its management. Members may vote in management decisions in proportion to the interest they have in the LLC profits -- typically determined by the amount of a member's financial investment. Decisions by a member or collection of members holding more than 50 percent of the profits of the company are binding. The LLC member agreement must state the duties and responsibilities of a manager, if members appoint someone responsible for day-to-day operations. Unless the agreement states otherwise, all managers and members can make decisions binding to the LLC.
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Foreign LLC
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A foreign LLC, governed by the laws of another state or country, may register in Delaware. Section 18.901 states that Delaware cannot deny registration to a foreign LLC because of any difference between LLC laws in its home state or country, and those of Delaware. When a foreign LLC registers in Delaware, it must provide the secretary of state with an application to register containing specific information. This includes the name of the LLC, and the name that it wishes to register under in Delaware. It also must list its state or country of origin, and a include statement that it exists as a limited liability company in that country or state. The registration must state the nature of the business that the LLC intends to conduct, along with its office address and the name of the registered agent, both of which must be in Delaware.
Dissolution
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If you want to "wind up" an LLC, the process of winding up is dissolution. Section 18.801 of the Delaware act states that an LLC will exist perpetually, unless a time limit in its member agreement states a date when it will terminate. If so, the LLC dissolves on that date. You can dissolve an LLC if the members vote for the winding up, or give their written consent. If at some point there are no members of an LLC, it dissolves automatically. A judicial decree can also dissolve an LLC. This may happen where a court decides that an LLC can no longer conduct its business in conformity with its limited liability agreement, such as when it has no assets and no way to pay its debts.
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