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Companies continue to leave Delaware, a state historically known for being business-friendly.
Elon Musk inspired the exodus in 2024 when he reincorporated SpaceX in Texas.
Coinbase was the most recent major company to announce its intention to leave the state.
Delaware was once the go-to state to incorporate. That might be changing.
A number of high-profile corporations have picked up and left the state in the last year, citing legal uncertainty and “subjectivity” introduced by the Delaware Court of Chancery, which handles corporate cases and business disputes.
Elon Musk helped spark the trend when he urged companies to avoid incorporating in Delaware last year after a judge voided his $55 billion pay package. Some prominent companies, like Tripadvisor, left even before Musk’s high-profile case.
Although Delaware has a reputation as a business-friendly state, a series of recent court rulings has left executives wondering if they’ll find better legal protections elsewhere. Musk, for example, reincorporated SpaceX and Tesla from Delaware to Texas.
“If the verdict in my case in Delaware is not overturned, it will be used as precedent in every fake shareholder case for every company incorporated in Delaware for the rest of time!” Musk wrote on X in 2024.
Delaware Gov. Matt Meyer told Business Insider in February that the state is reaching out to companies and working to address concerns. Meyers approved several changes to the state’s General Corporation Law in March.
Companies incorporated in Delaware account for a substantial portion of the state’s revenue. The Delaware Department of State says that close to 2 million companies, including two-thirds of Fortune 500 companies, have made the state their legal home.
“Any company thinking about leaving, we’re actively reaching out, we’re talking to them, we’re understanding what the issues are and understanding what ways we can do better,” Meyer said. “And for those entities that have already made the decision to leave, we’re going to continue to work hard to earn their trust and hopefully to have them come back.”
Here are the biggest companies leaving Delaware.
Andreessen Horowitz
Andreessen Horowitz announced it was moving its corporation to Nevada in July. Pavlo Gonchar/SOPA Images/LightRocket via Getty Images
VC firm Andreessen Horowitz said in July it would reincorporate its primary business — AH Capital Management — to Nevada.
The firm said “legal uncertainty” has created concern among investors and entrepreneurs on company boards.
“As a result, many of the companies we fund and the entrepreneurs that we talk to are taking a second look at whether they should incorporate in other jurisdictions, prompted by the departure from Delaware of significant technology companies like Dropbox, Tripadvisor, and Tesla,” the firm said in a blog post.
Andreessen Horowitz said it could have relocated “quietly,” but it felt it was important to be transparent.
“For founders considering a similar move, there is often a reluctance to leave Delaware, based in part on concerns for how investors will react,” the firm said. “As the largest VC firm in the country, we hope that our decision signals to our portfolio companies, as well as to prospective portfolio companies, that such concerns may be overblown.”
Roblox
Roblox moved its corporation from Delaware to Nevada in May. Rafael Henrique/SOPA Images/LightRocket
Roblox, the online gaming platform, said its stockholders voted to move the company’s corporate home to Nevada, according to a May SEC filing.
In an April SEC filing, CEO David Baszucki wrote a letter to shareholders urging them to support management’s proposals, which included leaving Delaware.
“We believe that Nevada’s corporate law framework and statutory regime aligns with Roblox’s culture of innovation, values, and mission to connect the world with civility and optimism,” Baszucki said. “It also allows us to continue to build shareholder value, by providing a supportive, predictable environment.
Dropbox
Dropbox, the file-sharing and storage company, told its stockholders in January that it would reincorporate in Nevada. Reuters
The file-sharing and storage company told its stockholders in a January SEC filing that it would reincorporate in Nevada.
Under a section titled “Reasons for the Nevada Reincorporation,” Dropbox said it was in the midst of a “transformational period.”
“The evaluation committee and our board of directors determined that it is important for the Company to be able to operate with agility during this period of business transformation and that it would be competitively advantageous for the Company to have a predictable, statute-focused legal environment during a time of rapid business change,” the company said.
Dropbox added that Nevada might provide a more “predictable legal environment.”
Pershing Square Capital Management
Bill Ackman, the CEO and founder of Pershing Square Capital Management, said he intended to move his corporation from Delaware to Nevada. Reuters
In February, Bill Ackman, the CEO and founder of Pershing Square Capital Management, said he would move the legal home of its investment holdings company to Nevada.
Ackman shared the development in a February X post referencing Dropbox, which also said it would leave Delaware.
“We are reincorporating our management company in Nevada for the same reason. Top law firms are recommending Nevada and Texas over Delaware,” Ackman wrote.
The CEO and founder said he was still considering Texas in a separate post.
Trump Media & Technology Group
The Trump Media & Technology Group, led by CEO Devin Nunes, announced in May that it had reincorporated in Florida. Octavio Jones/Reuters
The Trump Media & Technology Group announced it moved to Florida after shareholders approved a proposal in May. The company operates the Truth Social platform, TV streaming platform Truth+, and Truth.Fi, a financial services company.
President Donald Trump’s political ascent has shifted attention toward Florida, where his private Mar-a-Lago club is located. In 2024, Business Insider spoke to lobbyists who said Florida had become “the power nexus for the country” and “the epicenter of Trumplandia.”
“We’re thrilled to reincorporate our Company in Florida,” CEO Devin Nunes said in a press release. “We’re thrilled to reincorporate our Company in Florida. With its pro-business orientation and respect for the rule of law, Florida is a great place for Trump Media to officially call home.”
The Trade Desk
The Trade Desk, an ad tech company, proposed reincorporating in Nevada in 2024. Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images
Ad tech company The Trade Desk included a proposal to reincorporate in Nevada in a late 2024 SEC filing.
The company said its board of directors and management “thoroughly discussed” the proposal.
“These discussions were in response to a number of factors, including developments in the competitive and regulatory landscape in which we compete and views regarding the legal landscape in Delaware,” the company said.
The Trade Desk filed another SEC filing that November, saying its stockholders approved the proposal.
Simon Property Group
Simon Property Group, a real estate investment company, proposed reincorporating in Indiana in May. Reuters
Shareholders for Simon Property Group, a real estate investment trust focused on the retail sector, approved a proposal to move its legal home to Indiana, according to a May SEC filing.
Indiana Secretary of State Diego Morales called the decision a “significant milestone” in fostering a “business-friendly environment.”
“We are proud to welcome Simon Property Group home. This move is a big win for Indiana — and it sends a strong message that our state is open for business. We look forward to continuing to support Simon Property Group and all companies who choose Indiana as their home,” Morales said in a press release.
Coinbase
Coinbase said it would leave Delaware to reincorporate in Texas. Sopa Images/Getty Images
The cryptocurrency exchange has filed paperwork with the Securities and Exchange Commission to leave Delaware and reincorporate in Texas, its chief legal officer, Paul Grewal, wrote in a column in The Wall Street Journal.
Texas has become “an increasingly attractive hub for innovative companies like ours,” Grewal wrote. “It’s a shame that it has come to this, but Delaware has left us with little choice.”
He added that recent legislation in Texas has made the state more attractive for the company.
“Senate Bill 29 modernized the Texas Business Organizations Code to codify the business-judgment rule, which rightly empowers directors and officers to make the business decisions they need to innovate,” Grewal wrote, referring to new legislation that gives companies more predictability in corporate governance disputes. “This bill, together with the establishment of the Texas Business Court system, gives companies a business-friendly legal ecosystem with strong protections and efficient dispute resolution.”
