\u201cDexit\u201d concerns.<\/a><\/p>\nHowever, some business law experts, like Ahdieh, say the average shareholder is focused on increasing their returns and does not care about shareholder power or where the company is incorporated.<\/p>\n
Delaware Gov. Matt Meyer has vowed to win back companies that leave, arguing his state\u2019s experience \u201cbeats going to Vegas and rolling the dice.\u201d <\/p>\n
Less predictability<\/p>\n
Companies flock to Delaware for its well-respected Court of Chancery, a sophisticated and separate forum focusing on equity, corporate and business law. This incorporation machine generates $2.2 billion annually, about one-third of the state\u2019s operating budget.<\/p>\n
There is comfort in working in the familiarity of Delaware law, said Ahdieh, but that predictability has come into question in the last decade as corporate leaders grew unhappy over losing precedent-setting court decisions governing corporate conflicts of interest.<\/p>\n
Widener University Commonwealth law school professor Christian Johnson acknowledged a shift in Delaware but said reincorporating elsewhere might be \u201ca bit of an overreaction.\u201d Although a few big-name companies have moved, there are still more than 2 million legal entities incorporated in Delaware, including two-thirds of the Fortune 500. <\/p>\n
Statutes in Texas and Nevada may appear more flexible, but they have not been extensively tested, and their courts are not as experienced working with the larger entities that favor Delaware, Johnson said.<\/p>\n
Protections in Texas<\/p>\n
In May, Texas Gov. Greg Abbott signed legislation providing greater securities for corporate officers and adding restrictions to shareholder records requests. The bill also allows corporations to require an ownership threshold, no more than 3% in outstanding shares, before a shareholder can initiate a derivative lawsuit, typically on behalf of the company and against its own board or directors. <\/p>\n
Restrictions on who can initiate such lawsuits are not uncommon, but Texas\u2019 implementation imposes a \u201cfar higher barrier than the norm,\u201d Ahdieh said.<\/p>\n
Consumer advocates worry the changes endanger shareholder and investor protections by giving owners and directors more protection against lawsuits that could hold them accountable if they violate their fiduciary duty.<\/p>\n
For businesses, the changes mean potentially saving millions of dollars in shareholder lawsuit settlements and legal fees by mitigating the likelihood of those costly cases reaching court. For the states, attracting the companies means millions in business activity and revenue from regulatory filing and court case fees and taxes.<\/p>\n
New courts <\/p>\n
Eyeing a piece of that, Oklahoma is on pace to establish its recently approved business courts in 2026. <\/p>\n
\u201cI\u2019m trying to take down Delaware,\u201d said Oklahoma Gov. Kevin Stitt, a Republican. \u201cWe want to be the most business-friendly state.\u201d<\/p>\n
Nevada wants to compete, too. It has run business dockets in Washoe and Clark counties since 2001, and it\u2019s in the state\u2019s interest to expand operations considering its fast-growing economy and population, said Benjamin Edwards, a University of Nevada, Las Vegas law professor who studies business and securities law.<\/p>\n
But he said it could take decades to build up a court comparable to Delaware, which has a valuable reputation for handling cases relatively quickly. <\/p>\n
Nevada\u2019s proposed business court wouldn\u2019t take effect until 2028 at the earliest and would require amending the state constitution, which would need approval by the 2027 legislature and voter approval in 2028 to allow for the appointment of judges.<\/p>\n
___<\/p>\n
Associated Press reporter Marc Levy in Harrisburg, Pennsylvania, contributed to this report. <\/p>\n","protected":false},"excerpt":{"rendered":"CLAYMONT, Del. (AP) \u2014 Lawmakers in Texas, Oklahoma and Nevada have recently approved changes aimed at helping their…\n","protected":false},"author":3,"featured_media":10378,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[64,5878,11296,364,11297,11288,356,905,9215,66,11289,57,5026,59,11294,336,362,2934,564,11299,8006,11295,11291,617,11290,6324,5847,80,11298,11293,2527,7829,358,11292,5028,61,67,132,68,333],"class_list":{"0":"post-10377","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-business-ownership","10":"tag-christian-johnson","11":"tag-constitutional-law","12":"tag-corey-frayer","13":"tag-corporate-law-and-regulation","14":"tag-courts","15":"tag-delaware","16":"tag-domestic","17":"tag-elon-musk","18":"tag-finance-business","19":"tag-general-news","20":"tag-greg-abbott","21":"tag-inc","22":"tag-kevin-stitt","23":"tag-lawsuits","24":"tag-legal-proceedings","25":"tag-legislation","26":"tag-maryland","27":"tag-matt-meyer","28":"tag-md-state-wire","29":"tag-mercadolibre","30":"tag-neuralink","31":"tag-nevada","32":"tag-nv-state-wire","33":"tag-ok-state-wire","34":"tag-oklahoma","35":"tag-politics","36":"tag-robert-ahdieh","37":"tag-roblox-corp","38":"tag-spacex","39":"tag-tesla","40":"tag-texas","41":"tag-tripadvisor","42":"tag-tx-state-wire","43":"tag-u-s-news","44":"tag-united-states","45":"tag-unitedstates","46":"tag-us","47":"tag-voting"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/10377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=10377"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/10377\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/10378"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=10377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=10377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=10377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}