Delaware Passes Bill Amending Corporation Law Despite Opposition
After a heated debate and several failed amendments, Delaware’s General Corporation Law (DGCL) has been revamped with the passing of Senate Bill 21 in the Delaware House. Governor Matt Meyer signed the bill into law following its approval. Despite facing widespread public opposition, the bill aims to protect Delaware’s corporate franchise, which generates a significant portion of the state’s revenue.
The legislation was introduced in response to threats from some companies to leave Delaware and reincorporate in other states. While the corporate law community is divided on the potential impact, lawmakers and Gov. Meyer have pushed for the swift passage of Senate Bill 21 to maintain Delaware’s status as a premier location for incorporation.
The bill includes provisions that make it more challenging for shareholders to bring litigation forward and provides safe harbor procedures for controlling stockholders during conflicted transactions. Despite facing opposition, five amendments proposed by state representatives failed to ease concerns about the bill.
Proponents argue that the legislation is necessary to protect Delaware’s economy and provide clarity and predictability for corporations. Governor Meyer emphasized the importance of Senate Bill 21 in ensuring that Delaware remains an attractive place for businesses to incorporate.
The bill passed in the Delaware House with a vote of 32-7, with two members absent. It was signed into law by Gov. Meyer, who described Delaware as the best place in the world to incorporate a business and emphasized the importance of maintaining a balanced and predictable legal environment for corporations.
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