Delaware Governor Matt Meyer signed Senate Bill 21 ("SB 21") into law Tuesday night, pushing forward a measure that has drawn strong criticism from shareholder and consumer advocacy groups.
The bill made its way to the governor's desk after a debate in the House, where it passed with a 32 to 7 vote and two members absent on March 25, 2025. Attempts by House critics to amend the bill were rejected, clearing the way for final approval. On March 13, 2025, SB 21 sailed through the State Senate with a unanimous 20-0 vote.
SB 21 provides a safe harbor for controlling shareholders, shielding them from certain legal challenges, as discussed in this blog post. It outlines procedures allowing companies and their controlling shareholders to carry out transactions—such as asset sales—while minimizing the risk of lawsuits from minority investors.
The Delaware Secretary of State's testimony before the Senate Judiciary Committee on March 12, 2025 revealed some notable statistics about Delaware entities. In 2024, more than 289,000 entities—including LLCs, corporations, LPs/LLPs and statutory trusts—were formed in Delaware. Of that total, 58,000 were corporations. Additionally, there were 2,166 conversions in 2024, including LLCs converting to corporations and Delaware LLCs converting to out-of-state entities.
According to the Governor's press release, Delaware is home to 2.2 million registered entities and incorporated 81% of U.S. IPOs in 2024. The corporate franchise represents over one-third of Delaware's state budget at roughly $2.2 billion.
In his press release, Governor Meyer said: "Delaware is the best place in the world to incorporate your business, and Senate Bill 21 will help keep it that way, ensuring clarity and predictability, balancing the interests of stockholders and corporate boards...
The law will be effective back to February 17, 2025.
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