DELAWARE- Delaware has long been the corporate capital of America, home to more than a million incorporated businesses. But as major companies head for the exit, state lawmakers are now working on new legislation to keep them from leaving.
The state’s unique Chancery Court, which exclusively handles business lawsuits, has been a key factor in attracting corporations. In recent months, major corporations have started relocating to states like Texas and Nevada.
The shift gained momentum after a Delaware Chancery Court judge ruled against Elon Musk’s $56 billion Tesla pay package, prompting him to move Tesla and SpaceX out of the state.
With businesses leaving, state lawmakers are proposing changes to Delaware’s corporate laws. Senate Bill 21 aims to clarify corporate control, add steps to ensure fairness when major shareholders take a company private, and protect businesses from shareholder lawsuits. Supporters say these changes are necessary to keep companies in Delaware.
“If corporations continue to leave Delaware, it could be a burden for taxpayers,” said Christian Hudson, a Sussex County business leader. “Even if only 10% of Delaware’s 1.8 million incorporated businesses leave, that’s hundreds of millions of dollars gone from the state budget.”
Hudson warned that losing corporations could lead to higher taxes or even the introduction of a sales tax. “Half of our state budget revenues come from these corporations. That’s money for schools, roads, and infrastructure. If those corporations leave, where’s that money going to come from?” he said.
He also noted that states like Texas and Nevada offer stability and incentives that Delaware cannot match. “We either have to fight and reassert our dominance or watch it slip away forever.”
Senate Bill 21 has been assigned to the Senate Judiciary Committee. It was introduced by Democratic lawmakers from New Castle County but has bipartisan support in both the House and Senate.