Governor Meyer Signs Senate Bill 21 Strengthening Delaware’s Corporate Law
March 26, 2025/
Governor Matt Meyer has signed Senate Bill 21 into law, marking a significant update to Delaware’s corporate statutes. The legislation, which received bipartisan support in both the House and Senate, aims to maintain Delaware’s position as a leading jurisdiction for U.S. and global businesses. Developed in consultation with corporate leaders and legal experts, the bill clarifies key governance structures to promote transparent, consistent, and efficient corporate oversight. Governor Meyer praised lawmakers for the swift passage of the measure, highlighting its role in reinforcing the state’s long-standing reputation for corporate leadership.
Additional Information from Legislative Hall:
Tonight, Governor Matt Meyer signed Senate Bill 21 into law, thanking lawmakers for the swift passage of this critical update to Delaware’s corporate law, aimed at ensuring the state remains the premier home for U.S. and global businesses. The legislation, developed in collaboration with corporate leaders and legal experts, clarifies key governance structures to reinforce Delaware’s reputation for equitable, predictable, and efficient corporate oversight.
“Delaware is the best place in the world to incorporate your business, and Senate Bill 21 will help keep it that way, ensuring clarity and predictability, balancing the interests of stockholders and corporate boards,” said Governor Matt Meyer. “I want to thank Secretary of State Patibanda-Sanchez, Lieutenant Governor Kyle Evans-Gay, Senator Bryan Townsend, House Speaker Melissa Minor-Brown, Representative Krista Griffith, Senate Minority Leader Gerald Hocker, and House Minority Leader Tim Dukes for their steadfast support that will also protect state revenue that will fund education, affordable housing, and infrastructure improvements across our state.”
Delaware is the corporate home to 2.2 million registered entities—more than twice the number of people in the state—and incorporated 81% of U.S. IPOs last year. The corporate franchise represents more than one-third of the Delaware state budget at roughly $2.2 billion. Senate Bill 21 enhances the clarity of the rules for corporate decision-making by codifying the process for independent decisionmakers to approve conflict transactions, a key request from business leaders. It also codifies a balanced framework for stockholder access to corporate books and records.
The bill passed with bipartisan backing in the House and Senate.
From the Delaware House of Representatives…
The House passed legislation Tuesday to protect a critical piece of Delaware’s economy and budget, the corporate franchise, by codifying long-standing principles that have made the First State the nation’s leader in corporate law.
Senate Substitute 1 for Senate Bill 21 (SB 21), sponsored by leadership from each legislative caucus and Rep. Krista Griffith, seeks to address concerns raised by Delaware’s corporate stakeholders, including investors, executives, and legal advisors while providing guardrails for shareholders.
“This legislation may have complexities but the reasons to support it are very simple: to protect our economy, and to protect future opportunities for the people in our state,” said Rep. Krista Griffith.
“For decades, Delaware has been the gold standard in corporate law, and our corporate franchise has been a major revenue source. So when companies leave, it’s a financial loss that impacts every Delawarean. Just one company’s departure means up to $250,000 less for our schools, first responders, health care for seniors, roads, and other critical services. We can’t afford to lose the corporate franchise.”
“This bipartisan legislation is a thoughtful, balanced approach that protects our economy and corporate franchise while maintaining the integrity of the Court of Chancery, the best business court in the country.”
Delaware is the corporate home to 2.2 million registered entities, whose corporate franchise fees, unclaimed property revenues, and personal income taxes from attorneys collectively account for nearly 40% of Delaware’s state budget.
Recently there have been growing indications that companies incorporated in Delaware are considering relocating – or have already moved – to other states due to perceived uncertainties in Delaware’s corporate law.
SB 21(S) seeks to address those uncertainties and the concerns raised by Delaware’s corporate stakeholders by codifying long-standing corporate law principles, formally reducing the threshold required for most conflicted transactions within companies to occur, and raising the threshold necessary for shareholders to make books and records requests.
“I deeply appreciate the legislators who spent so much time the past six weeks digging into this critical legislation, separating fact from fiction at a time of understandable anxiety, and voting to reaffirm a central value of Delaware corporate law: if self-interested corporate leaders want certainty that business transactions will go through, they first have to earn the approval of truly independent decision makers,” said Sen. Bryan Townsend, Senate Prime Sponsor of SB 21 (S).
“As other states seek to compete with Delaware by offering fewer stockholder protections, Delaware will continue to bring value to stockholders by codifying clear rules of the road and supporting our world-class judiciary in their mission to review complex transactions and issue swift, thoroughly reasoned decisions.”
SB 21 (S) is not retroactive and applies only to cases filed on or after February 17, 2025. It does not impact prior litigation or ongoing legal proceedings, including those involving Elon Musk.
This legislation was drafted with a well-respected group of Delaware legal experts, including a former Chief Justice, a former Chancellor, and a leading professor from Delaware Law School.