The Texas Two-Step: Rewriting the Rules in the Battle for Corporate Domicile
Publication Date
4-27-2025
Abstract
This paper examines the evolution of jurisdictional dominance in corporate chartering, tracing the pivotal transition from New Jersey to Delaware and its relevance to the emerging challenge of Texas today. In the early twentieth century, Delaware seized corporate supremacy by offering a permissive legal code, a stable statutory regime, and a specialized Court of Chancery—laying the institutional foundation for a century of dominance in corporate law.
Today, Texas is executing its own strategic “two-step”: combining legislative reform with the creation of a specialized Business Court to directly compete with Delaware’s model. Through Senate Bill 29 and House Bill 15, Texas has codified robust director protections, reformed shareholder litigation procedures, and established a dedicated forum for complex business disputes designed to deliver efficiency and legal sophistication.
Crucially, Texas's early business court decisions, including the landmark ruling in Primexx Energy Opportunity Fund, LP v. Primexx Energy Corp., provide compelling proof of concept. In Primexx, the Texas Business Court decisively upheld contractual freedom within the statutory framework of the Texas Business Organizations Code, signaling the court's commitment to enforce negotiated agreements swiftly and predictably.
By analyzing historical precedent, legislative innovation, and emerging case law, this article argues that Texas is not merely positioning itself to compete—but may soon disrupt Delaware’s preeminence in corporate governance. Success will depend on more than statutory reform: it requires sustained investment in judicial expertise, procedural predictability, and institutional credibility, which historically proved decisive in Delaware’s ascent. In doing so, this paper offers a dynamic framework for understanding corporate jurisdictional competition in the modern era.
Document Type
Article
Keywords
Redomestication, Charter Competition, Corporate Law Business Courts Texas Business Court Delaware Court of Chancery Corporate Governance Fiduciary Duties Jurisdictional Competition State Competition for Incorporations Reincorporation Securities Litigation Internal Affairs Doctrine Senate Bill 29 (Texas) Shareholder Litigation Reform Business Judgment Rule, Business Courts, Business Judgment Rule, Texas Business Court, Delaware Court of Chancery, Corporate Governance, Fiduciary Duties, Jurisdictional Competition, State Competition for Incorporations, Reincorporation, Securities Litigation, Internal Affairs Doctrine, Senate Bill 29 (Texas), Cor, Corporate Law
Disciplines
Finance
DOI
10.2139/ssrn.5232964
Source
SMU Cox: Finance (Topic)
Language
English
