On May 14, 2025, Texas Gov. Greg Abbott signed the much-anticipated Senate Bill No. 29 (SB 29) into law.
As we previously reported, the amendments to the Texas Business Organizations Code reflected in SB 29, among other things, codify the business judgment rule and the specific requirements for rebutting the business judgment rule presumption (similar to Nevada’s corporate law), allow corporations to impose a minimum beneficial ownership requirement on shareholders desiring to bring a derivative action against a corporation (up to 3%), allow corporations to waive jury trials in their governance documents, and restrict books and records requests.
The amendments proposed by SB 29 were adopted by a supermajority in both chambers of the Texas legislature and are now effective.
The Governor also signed Senate Bill 1058, which exempts stock exchanges from certain franchise tax liabilities, and House Joint Resolution 4, which would put a constitutional amendment on the ballot in November to let Texas voters decide whether to ban the state from imposing certain taxes on stock exchanges in the future.
While Delaware continues to be the predominant jurisdiction of choice for corporations (approximately 64% of the S&P 500 companies are incorporated in Delaware), since last year, a handful of large high-profile companies have left Delaware, are taking steps to leave Delaware, or are considering leaving Delaware, mainly for Nevada, and, to a lesser extent, Texas. In the coming weeks, 11 public companies will vote on reincorporation out of Delaware (nine to Nevada and two to Texas). It remains to be seen whether the newly adopted TBOC amendments will cause more Delaware companies to consider reincorporation and whether Texas may now displace Nevada as the most desirable alternative to Delaware. It will also be interesting to see if and how the Delaware legislature responds.
