Delaware Limited Liability Company Act
The Delaware statute governing all Delaware LLCs, codified at 6 Del. C. Chapter 18, sections 18-101 to 18-1109.
Definition
The Delaware LLC Act is the foundational statute for Delaware LLCs. It is intentionally permissive: § 18-1101 directs that the Act be liberally construed to give effect to the principle that LLCs are creatures of contract. Most provisions can be modified by the Operating Agreement. The Act authorizes Series LLCs (§ 18-215), blockchain-based records (§ 18-104(d)), and broad fiduciary-duty modification.
Context
The LLC Act is distinct from the Delaware General Corporation Law (DGCL, 8 Del. C.) which governs Delaware Corporations. LLCs file under Title 6; Corporations file under Title 8. The two regimes have different fiduciary defaults, governance rules, and tax-related consequences.
Example
A Delaware LLC's Operating Agreement modifies the default fiduciary duties under 6 Del. C. § 18-1101 to limit member-to-member loyalty obligations. The Act's permissiveness supports this contractual freedom; the same modification would not be possible under the DGCL.
Common pitfalls
- Most provisions of the LLC Act are default rules that the Operating Agreement can modify; founders sometimes assume defaults are mandatory.
- The implied covenant of good faith and fair dealing cannot be eliminated by the Operating Agreement even though most other fiduciary duties can.
- Series LLC structure under § 18-215 is Delaware-specific; other states may not recognize the series-asset isolation.