Elon Musk Takes Firm Stance Against Delaware Incorporation Elon Musk Takes Firm Stance Against Delaware Incorporation

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By Ronald Tech

Billionaire entrepreneur Elon Musk reaffirmed his steadfast opposition to incorporating companies in Delaware, citing it as a catalyst for frivolous legal action.

What’s the Story: “None of my companies will consider acquiring a company incorporated in Delaware, as it is a guarantee of spurious litigation,” Musk stated in a post on X, formerly Twitter.

He made this declaration in response to a corporate lawyer’s suggestion of Wyoming as an alternative, while acknowledging Delaware’s significance for startups seeking funding or acquisitions.

Significance: Musk’s aversion to Delaware originates from a recent legal setback in the state. Last month, Delaware’s Court of Chancery invalidated his $56 billion pay package at Tesla, deeming it excessive and criticizing the board’s handling of the approval process.

In the wake of this ruling, Musk has been urging companies to eschew Delaware incorporation, asserting its detrimental impact on shareholder interests. Instead, he has been advocating for states like Nevada and Texas.

Musk’s Companies Take Action: Earlier this month, Musk incorporated his neurotechnology company Neuralink in Nevada. Subsequently, he revealed SpaceX’s shift from Delaware to Texas on Wednesday.

However, Tesla’s fate remains uncertain. Musk has announced a shareholder vote to relocate the company’s incorporation to Texas, although this solely pertains to the state of incorporation and not its headquarters, which are already situated in Texas.


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