INTRODUCTION

For more than a century, Delaware has reigned as the favored domicile for U.S. companies, celebrated for its deep body of corporate law and its specialized Court of Chancery that resolves corporate disputes between sophisticated parties and brings some element of predictability to the application of its corporate law. In recent years, however, a series of high-profile decisions from the Court of Chancery have coincided with (and some might say caused) notable re-domiciliations out of Delaware by Tesla, SpaceX, Dropbox, Tripadvisor, Andreessen Horowitz, and others. Talk of a flight from Delaware, or a “DExit,” followed. Although the absolute number of exits remains modest against Delaware’s vast roster of companies, the directional shift is real and underscores that domicile is no longer a one-size-fits-all decision.

At the same time, two rivals are ascendant. Texas, having launched its statewide Business Court in September 2024, is refining its Business Organizations Code (TBOC) to make it more attractive to companies and laying the groundwork for a Texas-based stock exchange. Nevada, long marketed as management-friendly, has expanded statutory protections for directors and officers and is moving toward a single, statewide business court.

Today, the choice of domicile influences everything from deal timing to litigation exposure and governance risk, and many companies are assessing whether Delaware—which for years was always a given—is the best place to incorporate when going public and some are even contemplating reincorporating to a new state.

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