What happened: A growing number of companies—including Tesla, TripAdvisor, Dropbox and Meta—are reincorporating outside of Delaware amid legal unpredictability, prompting Delaware to advance Senate Bill 21, its most significant corporate-law overhaul since 1967.

Tell me more: Delaware has long been favored for its business-friendly laws and over 200 years of corporate case law—which over the years has drawn roughly two-thirds of Fortune 500 companies and 80% of newly public firms—but recent court decisions and franchise taxes have spurred firms to explore alternatives. 

• In 2023, TLR worked hard to ensure the enactment of legislation creating a specialized business court in Texas that would handle complex business-to-business litigation—a major economic development tool for the state—as well as the Fifteenth Court of Appeals, which handles appeals for the business court and important cases involving the State of Texas. By building a judiciary tailored for corporate cases, Texas has positioned itself as a serious contender for incorporation.
  

TLR Thoughts: The creation of the Texas Business Court remains one of the most transformative steps the state has ever taken to strengthen Texas’s economic competitiveness. TLR is working with the Texas Legislature to further enhance the Business Court through HB 40 by Rep. Brooks Landgraf and SB 2883 by Sen. Bryan Hughes, as well as the state’s corporate governance laws through SB 29 by Sen. Bryan Hughes and HB 15 by Rep. Morgan Meyer. Collectively, these efforts will help position Texas as a major challenger to the decades-long dominance of Delaware’s business courts.

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