You have likely noted that Elon Musk, and many other CEOs, have been moving their corporate registration to Texas, which has shall we say more management-friendly laws than Delaware.  What you likely did not know is that 20% of Delaware’s state budget is covered by corporate fees.

The Delaware Senate has just passed and sent to the House  an amendment to the Delaware general corporate statute giving more power to management, tracking Texas law.  The thrust of the law, which passed the House unanimously, was two-fold: first, to permit control persons (directors, officers, majority shareholders) to enter into transactions wherein they have a personal interest if endorsed by either, not both, of the independent directors or stockholders; second, to limit the right of stockholders to access corporate records.

One part of the proposed changes did NOT pass: restricting legal fees for lawyers representing disgruntled shareholders upset by management or control stockholder safe-dealing.  So for those companies staying in Delaware, they still will be policed by the so-called “plaintiff’s bar.”

I will update if, as and when these new proposals become law.