6 Del. C. § 18-101 explained: § 18-101 Definitions for Delaware LLC founders (2026)

What 6 Del. C. § 18-101 says

Section 18-101 defines the words used everywhere else in the Delaware LLC Act: 'limited liability company', 'member', 'manager', 'limited liability company agreement' (Operating Agreement), 'certificate of formation', 'foreign limited liability company', and many more.

Why this section matters

Every other section of the Act references these defined terms. Understanding the definitions is the foundation for understanding the rest of the Act.

What this means for non-resident Delaware LLC founders

Non-resident founders should pay particular attention to the 'limited liability company agreement' definition: it is what the rest of the world calls the Operating Agreement.

The definition allows the agreement to be 'written, oral, or implied' under Delaware law.

Common pitfalls

• Confusing 'limited liability company agreement' with the Certificate of Formation; they are distinct documents.
• Assuming default rules apply when the Operating Agreement is silent; check the specific section.

How 6 Del. C. § 18-101 interacts with the Operating Agreement

The Delaware LLC Act is largely a set of default rules that apply when the Operating Agreement is silent. Section 18-1101 directs courts to give "maximum effect to the principle of freedom of contract," meaning members can contract around most defaults via their Operating Agreement. The implied covenant of good faith and fair dealing always applies and cannot be eliminated by contract.

Practical implication: 6 Del. C. § 18-101's default rule applies only if your Operating Agreement does not address the same topic. A well-drafted Operating Agreement supersedes most Delaware Act default rules. For solo single-member LLCs, this matters less; for multi-member LLCs and complex structures, it matters significantly.

Primary source

The text of 6 Del. C. § 18-101 can be read at the official Delaware Code website: delcode.delaware.gov/title6/c018/. The Delaware Division of Corporations publishes guidance and forms at corp.delaware.gov.

Related Delaware LLC Act sections

Related sections in the definitions category and adjacent topics include the formation sections (§ 18-201 to § 18-213), member rights (§ 18-301 to § 18-306), management (§ 18-401 to § 18-402), distributions (§ 18-501 to § 18-507), and dissolution (§ 18-801 to § 18-803). For a full mapping, see the Delaware LLC Act glossary entry.

See all Delaware LLC statutes →

What does Section 18-101 actually do?

Section 18-101 is the definitions section of the Delaware Limited Liability Company Act, found at 6 Del. C. § 18-101. In plain language, it is the glossary that tells you what the words mean everywhere else in the statute. When a later section says "member" or "manager" or "limited liability company agreement," it is using those words exactly as 18-101 defines them. That is why this section reads less like a rule and more like a dictionary. It does not, on its own, tell you to do anything. It instead fixes the vocabulary so the rest of the Act can be read consistently. For a non-resident founder reading the Act for the first time, this is the section that keeps you from guessing at meanings.

The terms it pins down include several you will meet constantly. Among the foundational ones are:

• "Limited liability company" and "foreign limited liability company."
• "Member" and "manager."
• "Limited liability company agreement," which is the term Delaware uses for what most people call the Operating Agreement.
• "Certificate of formation," the public document filed with the state.

Because every other section references these defined terms, understanding 18-101 is the foundation for understanding the rest of the Act. If you misread a definition here, you will misread the rules that depend on it. That makes this short section more load-bearing than its length suggests.

Why should a non-resident single-member owner care about a glossary?

It is tempting to skip a definitions section, but for a non-resident single-member owner the payoff is practical. The definition that matters most to you is "limited liability company agreement." That phrase is what the rest of the world calls the Operating Agreement. Under Delaware law, the definition allows that agreement to be written, oral, or implied. For a founder running a one-person company from outside the United States, this framing has real consequences. It means the agreement is a creature of definition first, and the rest of the Act builds on it. Knowing that the statute treats your Operating Agreement as a defined object, rather than an optional formality, reshapes how you think about it.

There is also a quieter benefit. Many of the obligations a non-resident actually deals with sit outside the Act entirely. The $110 Certificate of Formation filing, the $300 flat franchise tax due June 1, the free EIN you request on Form SS-4, and the federal Form 5472 plus 1120 filing with its $25,000 penalty for foreign-owned single-member LLCs are all separate from these definitions. Section 18-101 does not impose any of those. Keeping that boundary clear helps you avoid attributing tax and filing duties to the wrong source. The definitions tell you what the words mean inside the Act, and that is precisely the scope a careful reader should hold them to.

How do these definitions interact with the Operating Agreement?

The single most useful thing 18-101 does for a founder is define the Operating Agreement as the "limited liability company agreement." Because the definition contemplates an agreement that can be written, oral, or implied, the document you sign is recognized by the statute as the governing instrument of your company's internal affairs. The rest of the Act repeatedly defers to whatever your agreement says, and it can only do that coherently because 18-101 first defines what an agreement is. In other words, the freedom Delaware is known for begins as a matter of definition before it becomes a matter of substantive rule.

For a single-member LLC this has a subtle implication. Even with one owner, having a clear written agreement gives you the cleanest possible match to the defined term. While the definition permits oral or implied agreements, a written one removes ambiguity about what your company's rules are. Consider keeping these points in mind:

• The defined "limited liability company agreement" is the internal governing document, not the public filing.
• The same definition is what later sections rely on when they say the agreement may modify a default.
• A written agreement is the easiest way to prove what your agreement actually is.

So the interaction is foundational. The definition is the hinge that connects your private document to the statutory scheme that respects it.

How is the Certificate of Formation defined differently?

Section 18-101 also defines "certificate of formation," and this is where many newcomers get confused. The certificate of formation is the public document filed with the Delaware Secretary of State to bring the company into existence. It is a distinct, separate document from the limited liability company agreement. One is filed with the state and is public. The other is your internal agreement and is generally private. The definitions section keeps these two ideas in separate boxes on purpose, because the rest of the Act treats them very differently.

A common pitfall the record itself flags is confusing the limited liability company agreement with the Certificate of Formation. They are not interchangeable, and they do not serve the same function. The certificate is the formal act of formation, the thing the $110 state filing fee pays for. The agreement is the rulebook that governs how the company runs internally. To keep them straight, it helps to remember a short contrast:

• Certificate of formation: public, filed with the state, brings the company into existence.
• Limited liability company agreement (Operating Agreement): internal, governs how the company is run, may be written, oral, or implied.

Holding the two definitions apart is one of the most useful habits a founder can build, because so many later questions turn on which document you are actually talking about.

What does "member" and "manager" really mean here?

Two more defined terms deserve attention: "member" and "manager." In everyday speech people use these loosely, but inside the Act they are precise. A member is, broadly, a person admitted to the company as an owner. A manager is a person, who may or may not be a member, charged with managing the company when the structure calls for managers. The definitions section establishes these roles so that later provisions about voting, management, and authority can refer to them without re-explaining each time. For a single-member LLC, you are typically the member, and you may also act in a management capacity depending on how your agreement is set up.

Why does this matter to a one-person company? Because the words you choose in your Operating Agreement should track the statutory definitions. If your agreement describes you as a "manager" but the structure is really member-managed, you can create confusion that later sections of the Act resolve in ways you did not intend. Aligning your drafting with the defined terms in 18-101 keeps your agreement legible both to you and to anyone, such as a bank or a future buyer, who needs to understand who holds authority. This is general legal information rather than advice, but the practical lesson is consistent: use the statute's words the way the statute defines them, and your documents will be easier to interpret.

What is a "foreign limited liability company"?

Among the defined terms is "foreign limited liability company." This phrase often surprises non-resident founders because it does not mean what they expect. In the Delaware Act, "foreign" refers to a company formed under the laws of a jurisdiction other than Delaware, for example another US state. It does not describe the nationality of the owner. So if you, as a non-US person, form a Delaware LLC, your company is a Delaware limited liability company, not a foreign one, even though you personally live abroad. The definition is about where the entity was formed, not where its owner resides.

This distinction is worth internalizing because the word "foreign" carries a different meaning in immigration and tax contexts. The Act's definition is narrow and entity-focused. Misreading it can lead a founder to assume special registration or qualification steps apply when they do not, or to miss them when they do. Keeping the statutory meaning in view helps you read later sections accurately:

• Delaware LLC: formed under the Delaware Act, even if owned by a non-resident.
• Foreign LLC under the Act: formed under another jurisdiction's law.

For most non-resident founders setting up directly in Delaware, the takeaway is simply that your company is a domestic Delaware LLC for purposes of this Act.

A practical scenario: reading a later section correctly

Imagine you are reading a later provision of the Act that says something may be addressed in the "limited liability company agreement." Without 18-101, you might not realize that phrase means your Operating Agreement, and you might assume the statute is referring to some separate state form. With the definition in hand, you read the provision correctly: it is pointing you back to your own internal document. This is how a glossary section quietly changes the meaning of everything that follows. The scenario repeats across dozens of sections, which is why the record describes 18-101 as the foundation for understanding the rest of the Act.

Here is a second scenario. Suppose your Operating Agreement is silent on a particular point. A natural but risky assumption is that a default rule automatically fills the gap in your favor. The disciplined move is to check the specific section that governs that point rather than assuming. The definitions section sets up the vocabulary, but it does not tell you what every default is. So when your agreement does not address something, the right next step is:

• Identify the exact issue.
• Find the specific section of the Act that governs it.
• Read that section using the defined terms from 18-101.

Following that sequence keeps you from guessing, and it keeps your reading grounded in what the statute actually says rather than in what feels intuitive.

What are the common misunderstandings about this section?

The record itself names two pitfalls, and both are common. The first is confusing the "limited liability company agreement" with the Certificate of Formation. People hear "agreement" and "formation" and assume they are two names for the same paperwork. They are not. One is your internal rulebook and one is the public filing. Treating them as a single document leads to errors about what is public, what is private, and what each one controls. The second pitfall is assuming default rules apply whenever the Operating Agreement is silent, without checking the specific section. The Act often supplies a default, but the only reliable way to know the default is to read the governing section rather than to guess.

A third misunderstanding worth naming is treating "foreign" as a statement about the owner's nationality. As discussed, the Act ties "foreign" to the jurisdiction of formation, not to the residency of the member. These misunderstandings share a root cause: reading the defined terms casually instead of precisely. The cure is the same in each case. Slow down on 18-101, take its definitions literally, and carry those meanings forward into every other section. Doing so is general legal information rather than advice, but it is the kind of discipline that prevents the most predictable reading mistakes founders make when they first encounter the Delaware LLC Act.

What happens if you ignore the definitions?

Ignoring 18-101 does not trigger a penalty, because it is not a rule you can violate. It is a glossary. The consequence of ignoring it is subtler and arguably more dangerous: you misread the rest of the Act. If you skip the definition of "limited liability company agreement," you may not appreciate that your Operating Agreement is the document the statute keeps deferring to. If you skip the definition of "certificate of formation," you may mix up your public filing with your private agreement. Each misread definition compounds into a misread of the substantive sections that rely on it. So the cost of ignoring this section is paid later, in confusion, rather than immediately, in a fine.

For a non-resident founder, that compounding risk is worth taking seriously. Your distance from the US legal system already makes the vocabulary unfamiliar, and the definitions section is the bridge that makes the rest readable. Skipping it is a bit like trying to assemble furniture without reading what the labeled parts are. Nothing stops you, but you are far more likely to put a piece in the wrong place. The responsible approach is to read 18-101 first, keep its meanings consistent throughout, and return to it whenever a later section uses a term you are unsure about. This keeps your understanding anchored to the statute rather than to assumptions.

How do these definitions compare to a default rule?

It helps to contrast what a definitions section does against what a default rule does, because they are easy to blur. A definition fixes meaning. A default rule supplies a result when your agreement is silent. Section 18-101 is firmly in the first category. It tells you that "member" means a member and that "limited liability company agreement" means your Operating Agreement, but it does not tell you, for example, what happens to voting if your agreement says nothing. Those gap-filling outcomes live in the substantive sections of the Act, not in the glossary. Keeping the two categories separate is a meaningful habit for accurate reading.

The relationship between them is sequential. First you use 18-101 to understand the terms. Then you read the relevant substantive section to learn the default. The definition is the lens, and the default rule is what you see through it. Consider this ordering when you work through a question:

• Use 18-101 to translate the statutory vocabulary into plain meaning.
• Check whether your Operating Agreement addresses the point.
• If it is silent, read the specific governing section for the default.

Approached this way, the definitions section and the default rules work together rather than competing. The glossary never overrides a default and a default never redefines a term. Each does its own job, and understanding 18-101 is what lets you tell which job is which.

Where does this leave a founder forming a Delaware LLC?

For a founder forming a Delaware LLC, the practical posture toward 18-101 is straightforward. Read it as the dictionary it is, take its definitions at face value, and carry them into every other section you encounter. Pay special attention to "limited liability company agreement," because that is your Operating Agreement and it is the document the Act keeps returning to. Keep it mentally separate from the Certificate of Formation, which is the public filing that brings your company into existence. And remember that "foreign" describes the jurisdiction of formation, not your own nationality, so a Delaware LLC owned by a non-resident is still a domestic Delaware company under the Act.

None of this is legal advice, and your own situation may call for guidance from a qualified professional. What 18-101 offers is the shared vocabulary that makes the rest of the Delaware LLC Act intelligible. The obligations a non-resident actually juggles, including the $110 formation filing, the $300 franchise tax due June 1, the free EIN via Form SS-4, the federal Form 5472 and 1120 with its $25,000 penalty, and the BOI reporting exemption that has applied to US-formed LLCs since the FinCEN Interim Final Rule of March 26 2025, all sit outside this definitions section. By reading 18-101 carefully and keeping its scope clear, you build the foundation the record describes: a precise understanding of the words on which every other rule in the Act depends.