American companies have their headquarters all over the country. However, many incorporate in Delaware, taking advantage of the state’s tax protections and strong business court system.
But Meta is considering the opposite—moving its incorporation out of Delaware, with The Wall Street Journal naming Texas as a potential candidate.
The move would not involve relocating Meta’s headquarters to the Silicon Valley region of Northern California.
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However, in recent years, Delaware’s courts have been more open to legal challenges that shareholders have brought against companies.
Multiple Meta board members, including CEO Mark Zuckerberg, face a shareholder lawsuit in Delaware stemming from the 2018 scandal involving data firm Cambridge Analytica and user data collection for political advertising. The case is heading to trial in April, and the court has allowed plaintiffs to bring in Zuckerberg for a deposition.
This has led to several other major companies leaving the state. Dropbox announced this week that it gained approval to move its incorporation to Nevada. Elon Musk, the world’s richest man, has moved several of his companies out of Delaware in recent years.
Musk moved his biotech startup, Neuralink, to Nevada. He has also moved Tesla and SpaceX to Texas, which has been working to pitch businesses on the notion that its courts will be friendlier to them.
Musk’s move follows a court ruling in Delaware that required him to give up a compensation package worth more than $55 billion after shareholders sued, alleging the company was breaking its duty to shareholders by offering Musk the lucrative deal.
Tags: Delaware, Elon Musk, Facebook, Mark Zuckerberg, Meta, Neuralink, Nevada, Social Media, SpaceX, Tesla, Texas
LAUREN TAYLOR: American companies have their headquarters all over the country. But a significant portion of them incorporate themselves in Delaware, taking advantage of the state’s protections for taxation and its strong business court system.
But Meta is considering moving its incorporation out of Delaware and to another state, with The Wall Street Journal naming Texas as a potential candidate.
The move would not involve moving Meta’s headquarters, located in the Silicon Valley region of California.
But in recent years, Delaware’s courts have been more open to legal challenges shareholders have brought against companies.
Multiple Meta board members, including CEO Mark Zuckerberg, are facing a shareholder lawsuit in Delaware stemming from the scandal around data firm Cambridge Analytica collecting user data for political advertising. The case is heading to trial in April and the court has allowed plaintiffs to bring in Zuckerberg for a deposition.
It’s led to several other major companies leaving the state. Dropbox announced this week that it gained approval to move its incorporation to Nevada.
And Elon Musk, the world’s richest man, has moved several of his companies out of Delaware in recent years.
He moved his biotech startup Neuralink to Nevada, and he moved Tesla and SpaceX to Texas, which has been working to pitch businesses on the notion that its courts will be friendlier to businesses.
Musk’s move follows a court ruling in Delaware that required him to give up a compensation package worth more than $55 billion after shareholders sued, alleging the company was breaking its duty to shareholders by offering Musk the lucrative deal.
For Straight Arrow News, I’m Lauren Taylor.
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