Delaware Passes Controversial Bill to Retain Corporations

Delaware lawmakers have passed a bill aimed at preventing companies like Meta from relocating their corporate charters to states with more favorable laws, a move referred to as 'DExit.' The legislation, SB 21, modifies how controlling shareholders are defined and facilitates transactions that may conflict with minority shareholders' interests, drawing criticism as a 'billionaire's bill.' Proponents argue it will maintain Delaware's status as a premier incorporation hub, countering potential losses in business due to competitive state laws. The bill has already faced backlash for potentially undermining investor protections and limiting judicial oversight. Critics, including the International Corporate Governance Network, express concerns about its long-term implications for investors' returns. This legislative effort comes as the state seeks to preserve its economic foundation, which relies heavily on business incorporation fees.