Delaware LLC

The Operating Agreement Should Address an Exit Strategy In limited liability companies involving a small number of members, the Operating Agreement will need to restrict transfers. That restriction assures that the parties will continue to do business with the same people, and not strangers. Restrictions on transfers of interests by small passive investors are less […]

A Delaware LLC is protected from creditors that target a member The charging order that allows creditors of a member to pursue their distributions, but not LLC assets or other member assets, applies uniquely to LLCs in Delaware. Creditors are not entitled to LLC property or an ownership stake in the LLC, while The Uniform […]

LLC Charging Order: Two-Way Protection Unlike many other states, one key benefit of the Delaware LLC not available to corporations in any state is that the Delaware LLC also offers a second type of protection: the “reverse shield.” Choosing to form a Delaware LLC creates a two-way shield. Unlike the traditional shield, the reverse shield […]

Member Removal The same holds true when removing a member. It is important to have the resigning member acknowledge the terms whereby that member is leaving the LLC, such as consideration and to whom the interest is being transferred. After the member signs the resignation and transfer acknowledgment, the remaining members sign a First Amended […]