Frequently Asked Questions

What are the majority requirements for agreeing to dissolution in an LLC agreement in Delaware?

The majority requirements for agreeing to dissolution are typically outlined in the LLC agreement. The process usually begins with a scheduled meeting where a vote is held among the board members to decide on the dissolution. Delaware law also allows for a vote bypass in special circumstances. This can occur if members who own more than two-thirds of the company's shares or interests give their consent for dissolution. Regardless of whether a full vote or an affirmation by majority interest holders is used, it’s important to keep formal minutes of the final decision. After the vote to dissolve, the LLC enters a winding up phase where all final business is handled. This includes closing physical locations, settling business with customers and suppliers, disposing of company property, discharging liabilities, handling ongoing lawsuits, distributing final assets among members, and closing the LLC's bank account. Delaware law mandates that all liabilities must be discharged before any members can collect final assets. This includes loans, taxes, contracts, and lawsuits. The law also specifies the order of liability payments, with creditors and liability holders being paid first, followed by approved distributions to members, and finally distributions to members based on contribution and LLC share ownership.