Texas, Nevada, and Oklahoma Expand Corporate Courts to Compete with Delaware’s Legal Dominance

Texas, Oklahoma, and Nevada are advancing new legal frameworks designed to attract corporate incorporations and business litigation away from Delaware, the long-standing leader in US corporate law, the Associated Press reports, the Associated Press reports.

These changes, which include the creation of specialized business courts and new legal protections for companies, come amid growing concerns over a possible “Dexit” — the term used to describe the exodus of major corporations from Delaware.

Delaware has long held a dominant role in corporate America thanks to its highly regarded Court of Chancery and business-friendly legal environment, generating around $2.2 billion annually — nearly a third of the state’s budget. But recent judicial rulings and increased regulatory scrutiny have prompted some companies to reconsider their incorporation status.

In response, states like Texas, Nevada, and Oklahoma are positioning themselves to compete. Each has introduced new laws or plans to build out business court infrastructure with the aim of capturing a share of the corporate legal market.

Texas launched its business court system in 2023 and has since passed legislation to limit shareholder powers. Among the changes are stricter requirements for initiating derivative lawsuits — legal actions brought by shareholders on behalf of the corporation — and limitations on access to corporate records. These measures offer companies added legal protections and are seen as attractive to high-growth firms looking to reduce litigation exposure.

Nevada recently passed a business-friendly update to its corporate statutes and is considering a constitutional amendment to establish a dedicated business court. If approved by the legislature and voters, the new court system could be in place by 2028.

Oklahoma, meanwhile, approved the formation of business courts in its two most populous counties, targeting a 2026 launch. Republican Gov. Kevin Stitt made clear the state’s ambition, saying:

“I’m trying to take down Delaware. We want to be the most business-friendly state.”

These developments follow high-profile moves by major companies such as Tesla, SpaceX, and Neuralink — all associated with Elon Musk — to relocate their incorporation from Delaware to states like Texas and Nevada. Other firms including TripAdvisor, DropBox, and MercadoLibre have either left Delaware or announced intentions to do so, citing concerns about inconsistent court rulings and increased legal uncertainty.

In light of the shifting landscape, Delaware lawmakers enacted reforms aimed at reinforcing the state’s status as a premier corporate hub. These include new limits on shareholder access to company records and broader legal protections for executives. Critics have dubbed the effort the “Billionaire’s Bill,” arguing it weakens shareholder rights in a rush to prevent further departures.

“Ultimately, I think the damage is done,” said Corey Frayer of the Consumer Federation of America, warning that Delaware may be ceding ground in its effort to balance corporate interests with investor protections.

Delaware Gov. Matt Meyer, however, remains confident in the state’s reputation. “Our legal infrastructure and experience beats going to Vegas and rolling the dice,” he said.

Despite the flurry of legislative changes elsewhere, legal scholars remain cautious about how far newer courts can go in competing with Delaware’s century-old system. While Texas and Nevada offer flexibility, their legal environments are still relatively untested.

“It could take decades to build up the kind of credibility that Delaware enjoys,” said Benjamin Edwards, a law professor at the University of Nevada, Las Vegas.

Christian Johnson, a professor at Widener University Commonwealth Law School, noted that although a few large companies have left Delaware, over 2 million entities — including two-thirds of the Fortune 500 — remain incorporated there.