Summary of Recent Changes to Delaware, Nevada, and Texas Corporate Law

This memorandum follows our prior memos of February 18, 2025 and March 28, 2025 to provide updates on further changes that Delaware, Nevada, and Texas are implementing or considering in order to establish a clear and efficient corporate legal framework and encourage companies to incorporate there.

Delaware. As discussed in our prior memo, Delaware recently enacted a number of amendments to its corporate statute, the Delaware General Corporation Law (DGCL), in order to provide increased protections for directors, officers, and controllers in certain key areas of Delaware corporation law and stem redomestications to other states. Some of these amendments have yet to be interpreted by the Delaware courts, and some are subject to constitutional challenges. Senate Concurrent Resolution 17 (Delaware SCR 17), which was introduced alongside the recent DGCL amendments and proposes exploring reforms regarding attorney’s fee awards in stockholder litigation, is still awaiting action by the Delaware General Assembly.

Nevada. On May 30, 2025, Nevada enacted Assembly Bill No. 239 (Nevada AB 239), which, among other things, permits Nevada corporations to waive jury trials regarding internal affairs disputes and clarifies the fiduciary duties of directors, officers, and controlling stockholders. The Nevada Legislature also enacted Assembly Joint Resolution No. 8 (Nevada AJR 8), which proposes an amendment to the Nevada Constitution that, if approved by voters, would authorize the establishment of a specialized business court in the state.

Texas. On September 1, 2024, Texas House Bill 19 (Texas HB 19) created the Texas Business Court, a specialized trial court with jurisdiction over certain commercial disputes, composed of judges appointed by the governor. Further, on May 14, 2025, Texas enacted Senate Bill 29 (Texas SB 29), which amends the Texas Business Organizations Code (TBOC) to enhance protections for directors, officers, and corporations. Texas SB 29 codifies the business judgment rule in statute, permits preemptive court determinations of director independence, narrows the scope of shareholder books and records inspections, and allows corporations, in their governing documents, to impose ownership thresholds for bringing derivative actions and to waive jury trials in internal entity claims. On May 19, 2025, the Texas governor signed into law Senate Bill 1057 (Texas SB 1057), which will amend the TBOC effective September 1, 2025 to allow Texas corporations with their principal place of business in Texas that are listed on a national securities exchange to adopt governance provisions setting minimum ownership thresholds in order for a shareholder to make a proposal other than director nominations. Further, on June 2, 2025, the Texas legislature passed Senate Bill 2337 (Texas SB 2337), which, if signed by Governor Abbott, would impose certain requirements on proxy advisory firms with respect to voting recommendations concerning Texas companies. Texas has also adopted, or is in the process of adopting, other amendments.

Although the recent legislation and proposals in Delaware, Nevada, and Texas differ in certain ways, there are some notable themes across them:

Specialized Business Courts. Both Nevada and Texas have either established, or are seeking to establish, specialized business courts for their states. The establishment of these courts is seen as an attempt to put Nevada and Texas on the same page as Delaware, where corporations have traditionally resolved their complex disputes in Delaware’s equity court, the Delaware Court of Chancery.

Waiver of Jury Trial. Both Nevada and Texas have granted corporations the right to preemptively waive jury trial rights in cases involving internal corporate affairs, such as derivative claims. This would align those states’ laws with the long-standing treatment of similar corporate claims as equitable claims tried without a jury in Delaware’s Court of Chancery. Taken together, the ability of Nevada and Texas corporations to ensure their complex stockholder disputes will be decided by judges and in specialized courts may be an important factor as corporations consider alternatives to incorporating in Delaware, which has the most extensive body of corporate case law of any U.S. state.

Greater Certainty. The recent legislative reforms in all three states seek to provide greater certainty to corporations and their directors, officers, and stockholders regarding their substantive legal rights and duties. In varying degrees of scope and specificity, the recent legislation in all three states provides welcome clarity and certainty on important issues for many corporations, including the standards for director independence and/or disinterestedness, and the review of transactions involving controlling stockholders.

A. Recent Key Changes and Proposals in Delaware

On March 25, 2025, Delaware enacted significant reforms to its General Corporation Law (DGCL) with the signing of Senate Bill 21 (Delaware SB 21), aiming to enhance legal clarity and reduce litigation risk for corporations, directors, and stockholders amid increasing redomestications to other states caused by various decisions of the Delaware courts that were widely viewed as unfriendly to business. As discussed in our March 28, 2025 memo, the amendments provide safe harbors from liability in controlling stockholder transactions (other than going private transactions) and conflicted director (or officer) transactions if they are either (1) approved by an independent board committee consisting of at least two directors, or (2) approved or ratified by a majority of the votes cast by the corporation’s disinterested stockholders. For going private transactions with a controlling stockholder to obtain safe harbor, both procedural protections must be used. Delaware SB 21 also codifies who can constitute a “controlling stockholder,” and statutorily defines a “disinterested director.” Additionally, Delaware SB 21 limits stockholder access to corporate books and records by requiring that demands be made in good faith and with a particularly stated, proper purpose, and limits the scope of these inspections to a set of specifically enumerated materials, absent a showing of a compelling need for other materials by clear and convincing evidence. These changes potentially offer greater clarity and predictability in key areas of Delaware corporate law.

In addition to Delaware SB 21, Delaware SCR 17, which is currently awaiting legislative action, could also reform Delaware law to cabin attorney’s fees in corporate litigation. As discussed in our February 18, 2025 memo, if enacted, Delaware SCR 17 would request that the Council of the Corporation Law Section of the Delaware State Bar Association provide the General Assembly with a report of recommendations for statutory reforms to attorney’s fee awards in stockholder litigation. [1] Any legislative action in response to the recommendations would seek to balance incentivizing plaintiffs’ lawyers to bring stockholder-protective litigation with protecting corporations and their stockholders against value-negative rent-seeking litigation. [2] Notably, Delaware SCR 17 would specifically request recommendations regarding “the utility of a cap on [attorney’s fee] awards based on” the lodestar multiple method. [3]

These legislative reforms in Delaware follow several recent Delaware judicial decisions that likewise have provided increased predictability regarding corporate transactions.

In Maffei v. Palkon, [4] for example, the Delaware Supreme Court held that a decision to redomesticate from Delaware to Nevada was subject to the business judgment rule because no member of the board, nor the company’s controller, received a material non-ratable benefit from the conversion. [5] The Court emphasized that “Delaware policy has long recognized the values of flexibility and private ordering,” and this policy is furthered by allowing directors discretion in choosing a corporation’s state of incorporation and by declining to second-guess redomestication decisions absent well-pled allegations of a material, non-ratable benefit to directors or controllers. [6]

Likewise, in Manti Holdings v. Carlyle Group (Manti II), [7] the Delaware Court of Chancery held that the business judgment rule governed the sale of a controlled company to a third party, despite allegations that the financial sponsor controller obtained a non-ratable benefit through the sale because it was incentivized to liquidate its position at the end of its fund’s lifecycle. [8] The court found that the business judgment rule applied because the financial sponsor controller was not operating under a liquidity-based conflict and the private equity controller’s receipt of consideration for its preferred shares did not constitute a non-ratable benefit. [9]

More recently, in Frank v. Mullen, [10] the Delaware Court of Chancery held that a 46.4 percent equity holder did not possess the amount of transaction-level control that would trigger fiduciary duties as a controlling stockholder. [11] The court found that plaintiff failed to allege particularized facts showing that the stockholder, alone or as part of some control “group,” exercised actual control over the company or unduly influenced the special committee considering the transaction. [12]

Two matters currently pending in the Court of Chancery, Plumbers & Fitters Local 295 Pension Fund v. Dropbox, [13] and Rutledge v. Clearway Energy Group LLC, [14] have raised constitutional challenges to certain aspects of Delaware SB 21. On June 6, 2025, the court in Clearway formally certified questions regarding the constitutionality of Delaware SB 21’s amendments to Section 144 to the Delaware Supreme Court. [15] Governor Meyer has sought to intervene in both actions to defend the constitutionality of the amendments. [16]

B. Recent Key Changes and Proposals in Nevada

1. Nevada AB 239 Amendments to the Nevada Revised Statutes

a. Jury Trial Waiver Provision

Under Nevada AB 239, corporations may, via their articles of incorporation, require that “any, all or certain internal actions” tried in a Nevada court be tried before the presiding judge rather than a jury. [17] This puts Nevada corporations on a similar footing as corporations organized in Delaware, where most lawsuits about internal affairs disputes are heard as equitable claims in non-jury trials in the Court of Chancery. However, given that any waiver needs to be included in the articles of incorporation, such amendment can only be effected with a stockholder vote, whereas recently enacted Texas law, discussed further below, permits such an amendment to be effected through any governing document, including bylaws.

b. Controlling Stockholders

Nevada AB 239 also amends the Nevada Revised Statutes (NRS) to define the scope of duties owed by “controlling stockholders” in their capacity as a controller, provides a statutory definition of who constitutes a controlling stockholder, and creates a presumption against a breach of that fiduciary duty where a transaction has been approved by a disinterested committee of the corporation’s board of directors.

i. Defining a Controlling Stockholder

Under the Nevada AB 239 amendments, a stockholder can constitute a “[c]ontrolling stockholder” only where that stockholder has the voting power “to elect at least a majority of the corporation’s directors.” [18] This singular definition of control should provide a bright-line definition to identify the scope of stockholders who could be subject to fiduciary duties.

ii. Controlling Stockholder’s Fiduciary Duties

Nevada AB 239 makes clear that the “only fiduciary duty of a controlling stockholder” in their capacity as a controller under Nevada law “is to refrain from exerting undue influence over any director or officer . . . with the purpose and proximate effect of inducing a breach of fiduciary duty by such director or officer” where (a) that director or officer is liable for such a breach; and (b) that breach both (1) directly relates to a transaction in which the controller is a party or is otherwise materially financially interested, and (2) results in a “material, nonspeculative and non-ratable financial benefit” to the controller, “which benefit excludes, and results in a material and nonspeculative detriment to the other stockholders generally.” [19]

Further, the amendments clarify that all stockholders, including controllers, have the right to exercise or withhold their voting power in their personal interest, without regard to any other person or interest, and that other than as discussed above, no stockholder, including a controlling stockholder “shall have any fiduciary duty to the corporation or any other stockholder” in their capacity as a stockholder of the corporation. [20]

iii. Controlling Stockholder Safe Harbor

Nevada AB 239 also creates a presumption that a controlling stockholder has not breached its fiduciary duty in connection with a given transaction where that transaction was authorized by a disinterested committee of the board of directors. [21] Further, Nevada AB 239 also makes clear that a controlling stockholder cannot be held individually liable to a corporation, its stockholders, or its creditors unless this presumption is rebutted and it is proven that the controller breached its fiduciary duty. [22]

Nevada AB 239 also expressly defines a “[d]isinterested director” as a director who (1) is not a party to, and does not otherwise have a material financial interest in, a given transaction, and (2) is able to satisfy the independence standards “without regard to any financial literacy of financial expert qualifications,” to serve on an audit committee of a non-investment company under the Securities Exchange Act, Rule 10A-3 promulgated thereunder, and the rules of the stock exchange on which any of the corporation’s stock is listed. [23] This definition is similar to the definition recently codified in Delaware, which defines a disinterested director as one who is not a party to a transaction, and otherwise lacks a material interest in that transaction or a material relationship with a party to the transaction, and creates a rebuttable presumption of independence where the director has been found independent under the rules of the stock exchange on which the corporation’s stock trades. [24]

c. Fiduciary Duties of Directors and Officers

Nevada AB 239 amends Nevada’s statutory business judgment rule, NRS § 78.138, to clarify that directors and officers of a corporation must exercise their powers “on an informed basis.” [25] Previously, the statute required that directors and officers exercise their powers in good faith and with a view to the interests of the corporation, but did not specifically require that they act on an informed basis. [26] However, it is unclear what practical effect, if any, this will have on directors’ and officers’ duties in light of Nevada’s statutory business judgment rule. This rule presumes that directors and officers have acted in good faith, on an informed basis, and with a view to the interests of the corporation. [27] Further, in order to hold directors and officers individually liable for breach of fiduciary duty, Nevada law requires both (1) a rebuttal of the presumption of the business judgment rule, and (2) that a director’s or officer’s breach of fiduciary duty involved intentional misconduct, fraud, or a knowing violation of law. [28] The Nevada Supreme Court has held that this second prong cannot be demonstrated by a showing of gross negligence. [29]

d. Stockholder Voting Agreements

The recent amendments also clarify that corporations may enter into voting agreements with one or more stockholders, and that any voting agreement among a corporation and one or more stockholders, or among stockholders themselves, may specify that the stock held by each stockholder must be voted “[i]n a manner dependent upon any fact or event which may be ascertained outside of the agreement if the manner in which a fact or event may operate upon the exercise of the voting rights is stated in the agreement.” [30]

e. Rights of Dissenting Stockholders

Nevada AB 239 also clarifies that appraisal is the exclusive remedy for stockholders that elect to exercise appraisal rights absent narrow circumstances. Under the amended statute, a stockholder seeking appraisal may not otherwise object to or challenge a transaction other than on the grounds that (1) the corporation failed to obtain the requisite stockholder vote to approve the transaction, or (2) the transaction was the result of fraud against the stockholder. [31]

f. Restructuring Mergers with Subsidiaries

Nevada AB 239 adds a new section to the NRS modeled on Section 251(g) of the DGCL to address restructuring mergers of the company into one of a corporation’s wholly owned subsidiaries. [32] Like preexisting Delaware law, this new provision permits a Nevada corporation to effectuate a restructuring merger with a wholly owned subsidiary without requiring stockholder approval as long as each share of the surviving holding company will have the same voting powers, designations, preferences, limitations, restrictions, and relative rights as each share of the prior existing corporation, and the newly issued shares are registered securities eligible or approved for trading on the same exchange as prior to the merger. [33]

g. Changes to the Amount of Authorized Shares and Reverse Stock Splits

Nevada AB 239 also enacts a number of reforms to modify the votes a corporation is required to obtain to effectuate certain actions with regard to its authorized or issued shares. The new statute makes clear that where a publicly traded corporation seeks to amend its articles of incorporation solely to increase or decrease the number of shares it is authorized to issue, that amendment may be approved by a simple vote of the stockholders of any class or series of stock effected by it. [34] Previously, the corporation would have been required to obtain approval by a majority of the corporation’s outstanding voting power. Likewise, where a publicly traded corporation seeks to effectuate a reverse stock split, and that action would adversely affect a class or series of stock, the reverse stock split can now be authorized by a simple majority vote of the affected classes or series, rather than a majority of the relevant outstanding voting power. [35] This provision will make it easier for corporate decisionmakers to raise capital through the issuance of new equity, or consolidate shares of existing equity, especially in corporations that have historically had difficulty generating sufficient stockholder vote turnouts to generate majority-of-the-voting-power votes. These provisions adopt the concepts reflected in Delaware’s 2023 amendments to Section 242 of the DGCL, which moved the stockholder voting standards for charter amendments regarding increases and decreases to authorized shares, and for authorizing reverse stock splits, from majority of the outstanding shares standards to simple majority vote standards. [36]

2. Proposed Constitutional Amendment to Establish Business Court

The Nevada Legislature has also proposed an amendment to the Nevada Constitution which would permit the establishment of a specialized business court for the state. Under the proposed amendment, the legislature would be required, “to the extent money is available,” to establish a business court consisting of three or more judges. [37]

a. Proposed Structure of the Business Court

i. Jurisdiction of the Business Court

Under Nevada AJR 8, the proposed business court would “have exclusive original jurisdiction to hear disputes involving shareholder rights, mergers and acquisitions, fiduciary duties . . . and other commercial or contractual disputes between business entities and any other business disputes of a similar nature in which equitable or declaratory relief is sought.” [38] The Nevada Supreme Court would have exclusive appellate jurisdiction over all appeals arising out of the business court. [39]

ii. Initial Appointments & Retention Elections of Business Court Judges

Under the proposed amendment, business court judges would initially be appointed by the governor. [40] When filling any individual seat on the court, the governor would be required to pick from a selection of three nominees proposed by a new Special Nominating Commission. [41] Any such nominee would be required to “have substantial experience as a practitioner or judge in one or more areas of law” within the business court’s jurisdiction. [42] Following the expiration of a business court judge’s initial term, judges wishing to remain on the court would be required to stand for retention elections requiring 55 percent or more of the votes cast. [43] Business court judicial terms would last six years. [44]

b. Nevada Constitutional Amendment Process

The procedure for amending the Nevada Constitution at the recommendation of the legislature requires multiple levels of review. Now that the legislature has approved Nevada AJR 8, the proposed amendment will be put to the next elected legislature, and if that legislature also approves the proposal, it will be submitted to a referendum of Nevada’s voters. [45] Because the next legislature will not sit until 2027, the business court proposal will not be put to a referendum before 2027 at the earliest. [46]

C. Recent Key Changes and Proposals in Texas

1. Establishment of the Texas Business Court

Texas HB 19 created the Texas Business Court on September 1, 2024. [47] The Texas Business Court is a statewide, specialized trial court with judges appointed by the governor to serve two-year terms. [48] The Court has limited concurrent jurisdiction with state district courts over commercial disputes that meet certain criteria, including the amount in controversy and type of case. [49] The Texas Business Court also has concurrent jurisdiction with state district courts regardless of the amount of controversy if a party to the action is a publicly traded company, and recent amendments to the TBOC under Texas SB 29 specifically provide that companies can specify the Texas Business Court (or another particular court in Texas) to serve as the exclusive venue for resolving internal disputes. [50] An action can be originally filed in the business court or removed to the business court. [51] The Texas Business Court has the same powers provided to state district courts, including the power to issue injunctions and other equitable relief. [52] The statewide Fifteenth Court of Appeals has exclusive jurisdiction over appeals from the Texas Business Court. [53]

2. Texas SB 29 Amendments to the Business Organizations Code

Texas SB 29 went into effect on May 14, 2025, and amended numerous provisions of the TBOC. It provides greater clarity and certainty on several topics.

a. Statutory Business Judgment Rule

Texas SB 29 codified the business judgment rule into statute for Texas corporations that have securities listed on a national securities exchange or who affirmatively elect such provisions in their governing documents. [54] Under this rule, directors’ and officers’ actions are presumed, unless rebutted, to have been taken in good faith, on an informed basis, in furtherance of the interests of the corporation, and in obedience to the law and the corporation’s governing documents. [55] To rebut the business judgment rule, a plaintiff must now (1) rebut one or more of these statutory presumptions; and (2) prove that (a) the director’s or officer’s act or omission constituted a breach of one or more of the person’s duties as a director or officer, and (b) the breach involved fraud, intentional misconduct, an ultra vires act, or a knowing violation of law. [56] Of note, allegations by plaintiffs of fraud, intentional misconduct, ultra vires acts, or knowing violations of the law must be pled with particularity regarding the circumstances giving rise to the actions. [57]

b. Waivers of Jury Trial for Internal Disputes

Corporations may now include a waiver of jury trial in their governing documents (i.e., certificate of formation or bylaws) for internal entity claims. [58] This revision is intended to align Texas law with the status quo in the Delaware Court of Chancery, where non-jury trials are the norm. Historically, in light of Texas’s constitutional right to a jury trial in civil matters, internal entity claims would be heard by jury trials. Under Texas law, this constitutional right can be waived only if such waiver is informed and knowing. To ensure that corporations can rely on the effectiveness of this waiver, Texas SB 29 included a number of safeguards to articulate when a person asserting an internal entity claim would be considered to have been informed of the jury trial waiver and to have knowingly waived such a right, including if (1) the person voted for or affirmatively ratified the governing document containing the waiver or (2) acquired an equity security at, or continued to hold an equity security after, the time at which the waiver was included in the governing documents. [59] These non-exclusive safe harbors could be supplemented by any other evidence satisfactory to a court having jurisdiction, including a person’s consent or acquiescence to the waiver. [60]

c. Preemptive Determinations of Director Independence

Public company boards can establish committees of independent and disinterested directors to consider transactions involving controlling shareholders, directors, or officers, and such committees may be authorized to consider such transactions whether or not contemplated at the time of the committee’s formation. [61] Further, corporations can now statutorily seek an upfront determination regarding the independence and disinterestedness of special committee directors. Specifically, “[a] corporation that adopts a resolution to authorize the formation of a committee of independent and disinterested directors . . . may petition a court . . . to hold an evidentiary hearing to determine whether the directors appointed to the committee are independent and disinterested.” [62] When the timing allows, this statutory mechanism may give corporations a tool to proactively validate the independence and disinterestedness of directors appointed to evaluate potential transactions.

d. Ownership Threshold Requirements for Derivative Lawsuits

Additionally, Texas SB 29 amends the provisions of the TBOC regarding derivative lawsuits on behalf of the corporation by allowing public corporations to specify in their governing documents a minimum ownership threshold required to institute or maintain a derivative action. In addition to traditional existing derivative litigation requirements, corporations may include in either their certificate of formation or bylaws a requirement that limits the ability to institute or maintain a derivative action to those shareholders who beneficially own a number of common shares sufficient to meet a minimum ownership threshold specified in the governing documents. [63] The threshold cannot exceed three percent of the outstanding shares of the corporation. [64] Importantly, ownership thresholds can only be satisfied by ownership of common shares, and these limitations can be put in place through bylaw amendments without a vote of shareholders if a corporation’s bylaws so permit. [65]

e. Books and Records Inspection Reforms

In Texas, a shareholder may, upon written demand stating a proper purpose, inspect the books and records of a Texas corporation if such shareholder holds at least 5 percent of the outstanding shares of stock or has been a shareholder for at least six months prior to such demand. [66] However the recent amendments under Texas SB 29 exclude e-mails, text messages, and similar electronic communications, as well as information from social media accounts, from the corporation’s books and records that a shareholder can inspect, unless those particular records effectuate an action taken by the corporation. [67] This narrows the universe of records that may be inspected further than the recent Delaware amendments.

f. Waivers of Class-by-Class Voting

Texas SB 29 also authorizes a corporation to waive in its certificate of formation the current requirement of class-by-class share voting in certain circumstances. Consistent with the provisions of Delaware’s corporation law, if authorized in the certificate of formation, corporations can elect to have all classes of its stock vote together as a single class. [68]

3. Texas SB 1057 Amendments to the Texas Business Organizations Code

On May 19, 2025, Texas Governor Greg Abbott signed Texas SB 1057, which is set to take effect on September 1, 2025. Under Texas SB 1057, “[n]ationally listed corporations” can elect in their governing documents to be governed by new Section 21.373 of the TBOC. [69] Under Section 21.373, nationally listed corporations will be able to limit the ability of a shareholder to submit a proposal on certain matters for approval at a meeting of shareholders. [70] Importantly, Section 21.373 cannot be used to limit the ability of shareholders to make director nominations or propose procedural resolutions that are ancillary to the conduct of the meeting. [71]

A “nationally listed corporation” is defined under the bill as a Texas corporation that: (a) has a class of equity securities registered under Section 12(b) of the Securities Exchange Act of 1934; (b) is admitted to listing on a national securities exchange; and (c) either has its principal office in Texas or is admitted to listing on a Texas stock exchange. [72]

If a nationally listed corporation has elected to be governed by Section 21.373, then only shareholders or groups of shareholders who meet the following criteria can submit proposals for approval at meetings of shareholders:

• The shareholder or group of shareholders must hold an amount of voting shares equal to at least (A) $1 million in market value (tested as of the date of submission of the proposal) or (B) three percent of the corporation’s voting shares;

• The shareholder or group of shareholders must have held such shares for a continuous period of at least six months before the date of the meeting and throughout the entire duration of the meeting; and

• The shareholder or group of shareholders must solicit the holders of shares representing at least 67 percent of the voting power of shares entitled to vote on the proposal. [73]

4. Texas SB 2411 Amendments to the Texas Business Organizations Code

On May 27, 2025, Governor Greg Abbott signed Senate Bill 2411 (Texas SB 2411), which amends the TBOC effective September 1, 2025. Although mainly technical in nature, Texas SB 2411 will provide several key updates for Texas corporations, including:

• Permitting entities to limit or eliminate the liability of officers for monetary damages for breaches of fiduciary duty (other than the duty of loyalty), to the same extent that directors can currently be exculpated, by adopting amendments to their certificates of formation; [74]

• Authorizing board of directors to amend certificate of formations without a vote of shareholders to effect certain forward stock splits, as well as reverse stock splits for the purpose of maintaining listing eligibility standards of national securities exchanges; [75] and

• Clarifying certain provisions relating to the ratification of defective corporate acts. [76]

Texas SB 2411 also expressly provides that the “plain meaning” of the text of the TBOC may not be supplanted, contravened, or modified by the laws or judicial decisions of any other state. [77] However, Texas SB 2411 also permits – but does not require-directors and officers of Texas entities to consider the laws and judicial decisions of other states and the practices observed by entities formed in other states, but provides that failure to follow the laws or practices of other states does not constitute or imply a breach of the TBOC or of any duty existing under Texas law. [78]

5. Texas SB 2337 Amendments to the Texas Business Organizations Code

On June 2, 2025, the Texas Legislature passed Texas SB 2337, which, if signed by Governor Abbott, would regulate proxy advisory firms in their voting recommendations concerning Texas companies. If signed, the new law would affect recommendations made by proxy advisory services such as Institutional Shareholder Services (ISS) and Glass Lewis when they provide advice concerning public companies that are incorporated under the laws of Texas, have their principal place of business in Texas, or have proposed redomiciling to Texas from other jurisdictions. [79]

If the proxy advisory firms do not base a recommendation solely on the financial interests of shareholders, they must provide detailed disclosures explaining the basis of their advice. [80] The statute notes several factors that the legislature considers to be “not provided solely in the financial interest of the shareholders,” including ones based on environmental, social, or governance goals, or diversity, equity and inclusion initiatives. [81]

Proxy advisory voting recommendations that are not based solely in the financial interest of the shareholders of a company would need to be accompanied by disclosures that conspicuously indicate that the services are not being provided solely in the financial interest of the company’s shareholders and explain with particularity the basis of the proxy advisor’s advice. [82]

The recent corporate law reforms in Texas and Nevada embrace and expand upon the recent Delaware business law changes that are designed to foster greater clarity and certainty for corporations and their boards of directors, officers, and controlling stockholders. As discussed above, the recent Delaware legislation is under challenge, with the question of its constitutionality certified to the Delaware Supreme Court for consideration. The Nevada and Texas statutes may of course face similar challenges in their home states. All of these changes, if they survive challenges, should provide greater certainty to corporations and their directors, officers, and stockholders, and reverse some of the concerning trends in stockholder litigation in Delaware, while bolstering the efforts of the legislatures in Nevada and Texas to challenge Delaware’s long-standing dominance as the preferred jurisdiction for corporate domicile.

Over the past year, there have been certain notable company moves from Delaware to Texas or Nevada. Most of those moves were put into motion prior to Delaware’s enactment of Delaware SB 21. Although it remains to be seen what effect these recent reforms in Delaware, Texas, and Nevada will have on many corporations’ chosen domicile, it is increasingly clear that these three states will seek to attract corporate directors, officers, and stockholders by adopting substantive and procedural mechanisms that improve the stability and predictability of their corporate law and reduce litigation risks.

Copyright © Sullivan & Cromwell LLP 2025

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1Del S. Con. Res. 17, 152d Gen. Assem. (2025).(go back)

2Id..(go back)

3Id..(go back)

4A.3d , 2025 WL 384054 (Del. Feb. 4, 2025).(go back)

5Id. at *1, *16..(go back)

6Id. at *30..(go back)

72025 WL 39810 (Del. Ch. Jan. 7, 2025).(go back)

8Id. at *15-16..(go back)

9Id. at *18-19, *23-24..(go back)

10A.3d , 2025 WL 1294078 (Del. Ch. May 5, 2025).(go back)

11Id. at *7-9, *18..(go back)

12Id. at *12-14..(go back)

13Trans. ID 6026379 (Verified Class Action Complaint) 19 151-71, C.A. No. 2025-0354-KSJM (Del. Ch. Apr. 8, 2025).(go back)

14Trans. ID 6246515 (Verified Derivative Complaint) 19 50-57, C.A. No. 2025-0499-LWW (Del. Ch. May 9, 2025).(go back)

15Trans. ID 76413936, C.A. No. 2025-0499-LWW (Del. Ch. June 6, 2025).(go back)

16Trans. ID 76362265, C.A. No. 2025-0354-KSJM (Del. Ch. May 29, 2025); Trans. ID 7633682, C.A. No. 2025-0499-LWW (Del. Ch. June 9, 2025).(go back)

17Nev. Rev. Stat. § 78.046(4).(go back)

18Nev. Rev. Stat. § 78.240(6)(d).(go back)

19Nev. Rev. Stat. § 78.240(3).(go back)

20Nev. Rev. Stat. § 78.240(2).(go back)

21Nev. Rev. Stat. § 78.240(4).(go back)

22Nev. Rev. Stat. § 78.240(5).(go back)

23Nev. Rev. Stat. § 78.240(6)(e).(go back)

248 Del. C. §§ 144(e)(4), (d)(2).(go back)

25Nev. Rev. Stat. § 78.138(1).(go back)

26See id..(go back)

27Nev. Rev. Stat. § 78.138(3).(go back)

28Nev. Rev. Stat. § 78.138(7).(go back)

29Chur v. Eighth Jud. Dist. Ct. in & for Cnty. of Clark, 458 P.3d 336, 342 (Nev. 2020).(go back)

30Nev. Rev. Stat. § 78.365(3).(go back)

31Nev. Rev. Stat. § 92A.380(2).(go back)

32See 8 Del. C. § 251(g).(go back)

33A.B. 239, 2025 Nev. Leg. § 22 (Nev. 2025) (enacted).(go back)

34Nev. Rev. Stat. § 78.390(1).(go back)

35Nev. Rev. Stat. §§ 78.2055(3), 78.207(3).(go back)

36Del. S.B. 114, 152d Gen. Assem., 84 Del. Laws ch. 98 (2023); 8 Del. C. §§ 242(a)(3), (b), (d)(2).(go back)

37A.J.R. 8, 83d Sess., at 1-2 (Nev. 2025).(go back)

38Id..(go back)

39Id. at 4..(go back)

40Id. at 2-3..(go back)

41Id..(go back)

42Id. at 2..(go back)

43Id. at 3..(go back)

44Id..(go back)

45Nev. Const. Art. XVI § 1.(go back)

46Nev. Const. Art. IV §§ 2,3.(go back)

47Tex. H.B. 19 § 5, 88th Leg., R.S. (2023) (enacted).(go back)

48Tex. Gov’t Code §§ 24A.004, 24A.008-009.(go back)

49Tex. Gov’t Code § 24A.004.(go back)

50Tex. Gov’t Code § 25A.004(c); Tex. Bus. Orgs. Code § 2.115(b)(2).(go back)

51Tex. Gov’t Code § 24A.006.(go back)

52Tex. Gov’t Code § 25A.004(a).(go back)

53Tex. Gov’t Code § 25A.007.(go back)

54Tex. Bus. Orgs. Code § 21.419(a).(go back)

55Tex. Bus. Orgs. Code § 21.419(c).(go back)

56Tex. Bus. Orgs. Code § 21.419(d).(go back)

57Tex. Bus. Orgs. Code § 21.419(f).(go back)

58Tex. Bus. Orgs. Code § 2.116.(go back)

59Tex. Bus. Orgs. Code § 2.115(d).(go back)

60Tex. Bus. Orgs. Code § 2.115(e).(go back)

61Tex. Bus. Orgs. Code § 21.416(g).(go back)

62Tex. Bus. Orgs. Code § 21.4161.(go back)

63Tex. Bus. Orgs. Code § 21.552(a)(3).(go back)

64Id..(go back)

65See id..(go back)

66Tex. Bus. Orgs. Code § 21.218(b).(go back)

67Id..(go back)

68Tex. Bus. Orgs. Code § 21.335(b)(2).(go back)

69Tex. S.B. 1057 § 1, 89th Leg., R.S. (2025) (enacted).(go back)

70Id..(go back)

71Id..(go back)

72Id..(go back)

73Id..(go back)

74Tex. S.B. 2411 § 16, 89th Leg., R.S. (2025) (enacted).(go back)

75Tex. S.B. 2411 § 23.(go back)

76Tex. S.B. 2411 §§ 31-38, 42-47.(go back)

77Tex. S.B. 2411 § 1.(go back)

78Id..(go back)

79Tex. S.B. 2337 § 2, 89th Leg., R.S. (2025).(go back)

80Id..(go back)

81Id..(go back)

82Id..(go back)