A number of issues exist that may preclude the ABSFA's application to a particular securitization transaction, including whether federal law will preempt the ABSFA in making a true sale determination and whether Delaware law generally, and the ABSFA in particular, will apply to a transfer in a securitization transaction.Although not yet judicially tested, the ABSFA is nevertheless a reason to seriously consider whether the parties to a securitization transaction should choose for Delaware law to apply to their contractual relations.The underlying principle of Delaware's alternative entity statutes permitting contractual flexibility is especially important in meeting the particular requirements of a securitization transaction, where, for example, the parties may need to grant rights to third parties, such as lenders and creditors, without having such third parties be owners or managers of the entity.Fiduciary Duties A significant advantage of Delaware alternative entities is that Delaware's common law fiduciary duties may be modified in an alternative entity's governing agreement.The alternative entity statutes generally furnish rules concerning internal governance only in situations where the creating parties have not otherwise provided for such rules in the governing agreement.
In this regard, it is frequently the case that the general partner must obtain limited partner consent before committing the limited partnership to certain courses of action.
A limited partnership is formed by the filing of a Certificate of Limited Partnership with the Delaware Secretary of State.
The required contents of a Certificate of Limited Partnership are few: While the Certificate of Limited Partnership is the formal document filed with the Delaware Secretary of State, the business arrangement between the general and limited partners is detailed in a limited partnership agreement ("LP Agreement").
Key Aspects and Features of Delaware Alternative Entities Delaware Limited Partnerships Since the Delaware Revised Uniform Limited Partnership Act , 6 Del. A Delaware limited partnership may be formed by two or more persons or entities, and must have one or more general partners and one or more limited partners.
Further, a limited partnership may carry on any lawful business, whether or not for profit, with the exception of banking and insurance.