Delaware's Corporate Advantages May Outweigh Benefits of Relocation

A number of high-profile companies have recently relocated their headquarters from Delaware to states such as Nevada and Texas. The move may make sense for some, but it is important to carefully weigh the pros and cons. In our recent Law360 article, we highlight several key considerations:

• Drivers of the move: reduced fiduciary obligations, enhanced protection for controlling stockholders, and potentially lower tax burdens
• The overlooked advantages of Delaware: predictable case law dating to 1792, sophisticated judiciary, and non-jury business trials
• Hidden costs of reincorporation: extensive legal reviews, stockholder approvals, and potential impediments to future investment
• Delaware's response: new bipartisan legislation aimed at rebalancing rules for controlling-stockholder transactions and inspection rights

For more details, read our full article: “When Reincorporation Out of Del. Isn't a Good Idea.”

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