In a significant shift in the U.S. corporate legal landscape, states including Texas, Oklahoma, and Nevada are actively enacting new laws and establishing specialized courts in a concerted effort to attract corporate incorporations and the lucrative legal disputes that often accompany them. These moves present a direct challenge to Delaware, which has long held the near-monopoly position as the preferred state for businesses to legally domicile.
States Court Corporate America
The legislative pushes in Texas, Oklahoma, and Nevada are designed to create environments perceived as more favorable to businesses, particularly regarding shareholder relations and corporate governance. This multi-front challenge signals a growing competition among states to capture a share of the corporate legal market, which contributes significantly to state revenues and economic activity.
Texas Leads With New Business Courts and Protections
Texas, which established a dedicated business court just last year, has been particularly aggressive in its pursuit of corporate charters. Bipartisan legislation was recently supported with the explicit goals of diminishing certain shareholder powers and providing businesses with greater legal protections against potentially burdensome shareholder lawsuits. This legislative effort culminated in Texas Governor Greg Abbott signing a key bill into law in May 2025.
This significant piece of legislation enhances certain securities and protections for corporate officers and imposes stricter restrictions on shareholder requests for company records. One of the most impactful provisions permits corporations to mandate an ownership threshold of up to 3% of outstanding shares for a shareholder to initiate a derivative lawsuit. Derivative lawsuits are typically brought by shareholders on behalf of the corporation against its directors or officers.
Robert Ahdieh, the dean of the Texas A&M University School of Law, commented on this change, noting that the 3% threshold represents a “significantly higher barrier than typically seen” in other jurisdictions. This elevated requirement could deter smaller shareholders or those with limited holdings from pursuing litigation, thereby offering companies increased insulation from certain legal challenges.
Nevada Adopts Corporation-Friendly Updates
Nevada, another state long known for its relatively permissive corporate laws, has also enacted corporation-friendly updates to its existing business statutes. Building on these changes, the state is further considering a constitutional amendment that would pave the way for the establishment of a dedicated business court. This proposed court would feature appointed judges, aiming to provide specialized expertise and efficiency in handling complex corporate disputes – a model similar to Delaware’s highly respected Court of Chancery.
Oklahoma Enters the Fray
Oklahoma has joined its counterparts in the competitive push. The state’s Republican-led Legislature recently sanctioned the creation of business courts within its two most populous counties. The establishment of these specialized dockets is intended to streamline complex commercial litigation and offer judges with specific experience in business law, potentially making the state a more attractive venue for corporate disputes.
The Influence of High-Profile Figures
The recent legislative actions in these states follow vocal advocacy from prominent business figures, most notably Elon Musk. Following a Delaware court ruling regarding his compensation package, Musk publicly promoted Texas and Nevada as more favorable alternatives for corporate domicile. This advocacy was followed by tangible action: Tesla and SpaceX subsequently moved their state of incorporation to Texas, and Neuralink similarly shifted its incorporation to Nevada. These high-profile corporate relocations have added momentum and visibility to the efforts of states challenging Delaware.
Delaware Prepares Its Defense
Recognizing the competitive threat posed by these states, officials in Delaware are reportedly preparing their own adjustments to corporate statutes and legal procedures. These anticipated changes are aimed at solidifying Delaware’s long-held standing as the preeminent state for corporate incorporation and litigation, signaling that the competition for corporate charters is likely to intensify.
The coordinated legislative and judicial initiatives in Texas, Oklahoma, and Nevada represent a fundamental challenge to the established order of U.S. corporate law. As these states position themselves as viable alternatives to Delaware, the outcomes could reshape the landscape of corporate governance, litigation venues, and state economic development for years to come.
