At the New Castle County Chamber of Commerce, we know that a strong business environment supports the well-being of all Delawareans. New Castle County is a major corporate and legal hub, and plays a critical role in driving Delaware’s economy. That’s why we, along with other Chambers and trade associations across the state, strongly support Senate Substitute 1 for Senate Bill 21 (SS 1 for SB 21). This bipartisan legislation, introduced by Senate Majority Leader Bryan Townsend and co-sponsored by Democratic and Republican leadership in both the House and Senate, as well as House Judiciary Committee Chair Krista Griffith is crucial to protecting Delaware’s reputation as the premier state for corporate law and entity formation.
The Delaware Corporate Franchise and related statutes account for more than 35% of Delaware’s General Fund Revenue. That percentage increases considerably when the “multiplier effect” is taken into consideration. The number of direct, secondary and tertiary jobs that exist, the benefit to the commercial real estate market in our County and State, and the numerous other economic benefits derived from the franchise are critically important to our state’s prosperity and the quality of life for all Delawareans. That revenue is essential to sufficient funding for public education, infrastructure, public safety, and other essential services.
Delaware’s Legacy of Excellence in Corporate Law
For over a century, Delaware has led the nation in incorporation and corporate governance. This has been possible because of:
- Our highly respected legal system, including the Delaware Court of Chancery, which is known for its fair, efficient handling of corporate disputes.
- A tradition of bipartisan cooperation on critically important issues for the good of all Delawareans.
- A Bar Association and Judiciary which are internationally renowned for integrity, expertise, and for its stewardship of our body of law and the legal process in our state; all of which were fundamental to Delaware assuming the role of America’s corporate capital more than a century ago.
Other states, such as Texas and Nevada, have taken notice and are actively working to lure companies away. Delaware’s continued success depends on staying ahead of the competition, which is exactly what SS 1 for SB 21 is designed to do.
Why Action is Needed Now
Some have questioned whether this legislation is necessary, arguing that companies aren’t leaving Delaware in significant numbers. However, the evidence tells a different story:
Public filings show movement. Corporate proxy statements reveal that several companies, some well-known, some less so, have considered or are considering leaving Delaware.
Meta (formerly Facebook) is in discussions with Texas. The Wall Street Journal has reported that Meta is in talks with Texas about changing its state of incorporation, a move that would be a significant loss for Delaware.
Law firms are actively encouraging companies to redomicile. Large firms in New York and elsewhere have been ramping up efforts to move companies out of Delaware. A recent letter from a statewide elected official in New York opposing the bill underscores the fact that there are financial incentives and competitive forces driving the opposition.
Other states are aggressively competing. Texas and Nevada have recently established specialized business courts to mimic Delaware’s Court of Chancery, further demonstrating their intent to challenge our leadership in corporate law.
To those who say this is a “manufactured crisis,” we respectfully disagree. The reality is clear: Delaware is facing increasing pressure from competitors, and waiting until the problem worsens is not an option. We must act now to maintain our competitive edge.
Addressing the Critics
Much of the opposition to SS 1 for SB 21 comes from out-of-state law firms that benefit from prolonged, expensive litigation against Delaware companies. One example is the overuse of “Books and Records” lawsuits, meant to provide transparency but often exploited for profit. This bill doesn’t eliminate these legal actions; it simply restores balance to ensure they serve their original purpose.
Concerns that the bill would harm pension funds and their beneficiaries are unfounded. Experts assure us that this legislation does not reduce the duties of care owed to pension fund participants. In fact, Delaware law already provides some of the strongest protections for pension funds in the country – stronger than many of the states looking to challenge our corporate law leadership.
A Vote for Delaware’s Future
Delaware’s corporate franchise isn’t just about business; it’s about jobs, economic stability, and the ability to fund essential public services. The revenue generated from incorporation supports our schools, roads, public safety, and health programs. Keeping our status as the premier corporate law jurisdiction ensures that Delaware remains economically strong for generations to come.
The passage of SS 1 for SB 21 is a testament to Delaware’s bipartisan commitment to excellence. We urge all members of the Delaware House of Representatives to vote “yes” to secure our state’s future.
Yvonne Deadwyler is the first woman and minority President & CEO of the New Castle County Chamber of Commerce, championing Delaware’s local businesses and economic growth. With over 15 years of corporate banking and nonprofit leadership experience, she remains deeply involved in community initiatives, serving on boards such as TeenSharp and Downtown Visions, and co-founding the Hispanic/Latino Organization for Leadership and Advancement at Bank of America.
