Delaware has been a corporate haven due to its business-friendly laws, attracting companies like Tesla and SpaceX under Elon Musk’s leadership. However, when Musk moved his companies out of Delaware for tax purposes last year, the state saw significant losses.
To maintain its reputation as a top destination for business incorporation, Delaware lawmakers are pushing a bill that alters the state’s corporate law structure to make deals between corporate leaders and major shareholders more predictable. The changes aim to prevent other states from poaching companies with more favorable laws.
Delaware Governor Matt Meyer supports the measure, saying the state is committed to winning back companies like Tesla if they leave. Democratic state Senate Majority Leader Bryan Townsend emphasizes that the goal is not to lure Musk back but to ensure that companies considering leaving do not find Delaware’s laws unattractive.
As Tesla CEO Elon Musk continues to appeal his compensation package, which was blocked by a Delaware judge, the bill’s passage could have significant implications for the business climate in Delaware. With other high-profile companies like Dropbox and Pershing Square Capital Management moving out of state, Delaware must adapt to stay competitive.
Source: https://www.businessinsider.com/delaware-corporations-elon-musk-tesla-exit-business-climate-2025-3