Three Years Of Delaware General Corporation Law Amendments: A Working Guide To The 2024, 2025, And 2026 Amendments

Overview

The Delaware General Corporation Law (DGCL) is annually reviewed for potential improvements, with the last three years yielding significant changes. The 2024 amendments were a legislative response to Court of Chancery decisions that had unsettled transactional market practice. The 2025 amendments – the most consequential of the three – created statutory safe harbors for conflicted transactions and narrowed stockholder books and record inspection rights. The 2026 amendments are largely technical, but one of them resolves a certificate of incorporation interpretation trap affecting public companies.

This alert consolidates the three years, explains what each change was designed to fix, and identifies topics that counsel should revisit.

2024 amendments

These amendments took effect on August 1, 2024.

Section 122(18) – Stockholder agreements

In West Palm Beach Firefighters’ Pension Fund v. Moelis & Co., 311 A.3d 809 (Del. Ch. 2024), the Court of Chancery held that certain governance arrangements in an agreement between a corporation and a stockholder implicated the board of directors’ management responsibilities pursuant to DGCL Section 141(a) and needed to appear in the corporation’s certificate of incorporation to be valid. New Section 122(18) expressly empowers a corporation to enter into governance agreements with current or prospective stockholders whose validity was questioned following the Moelis decision (e.g., agreements with covenants to take or refrain from taking future action, to obtain specified approvals before acting, and to require certain other persons or bodies to take or refrain from taking specified action). Such arrangements do not, without more, violate Section 141(a).

Four limits deserve attention:

• The corporation must receive consideration.
• A provision is unenforceable against the corporation if it conflicts with the certificate of incorporation or would conflict with Delaware law if placed in the certificate of incorporation, with a carve-out for DGCL Section 115, which is what allows these agreements to designate an exclusive non-Delaware forum or arbitration.
• Section 122(18) does not permit the contract to directly bind the board or individual directors, or to impose penalties on them for noncompliance.
• Section 122(18) does not touch fiduciary duties, including duties implicated in causing the corporation to enter into, perform, or breach the contract.

Section 122(5) was amended in parallel to confirm that management contracts and other internal delegation arrangements remain subject to Section 141(a) and related case law. Thus, unless otherwise provided in the certificate of incorporation, the board may not delegate fundamental board-level functions to officers or agents.

Section 147 – Board approval of documents in substantially final form

In Sjunde AP-Fonden v. Activision Blizzard, Inc., C.A. No. 2022-1001-KSJM (Del. Ch. Feb. 29, 2024), the court reasoned that a merger agreement may not have been validly approved because the board approved a draft that was missing key terms. New Section 147 provides that any agreement, instrument, or document requiring board approval under the DGCL (e.g., a merger agreement or amendment to the certificate of incorporation) may be approved in final or substantially final form. Approval is valid as long as the board knows all material terms or those terms are determinable from the information and materials presented to the board.

Section 147 also supplies a cure. Where the board has acted on a document that must be filed with (or referenced in a certificate filed with) the Delaware secretary of state, the board may ratify its earlier approval at any time before the filing becomes effective, and the ratification is deemed effective as of the original board action. Section 147 addresses board approval only; it does not authorize submission of documents to stockholders in only substantially final form, and it does not affect fiduciary duties or equitable remedies.

Section 232(g) – Stockholder notices

Section 232 was amended to provide that materials attached to or enclosed with a notice to stockholders are deemed part of that notice for purposes of the DGCL, the certificate of incorporation, and the bylaws. This addresses the technical notice deficiency identified in Activision, where defendants allegedly failed to comply with Section 251(c) in connection with the company’s merger proxy because the merger agreement attached to the proxy statement omitted the surviving company’s certificate of incorporation and was therefore incomplete, and the proxy statement itself (which contained a summary of the merger agreement) was not the requisite notice.

Section 261(a) – Merger remedies

New Section 261(a)(1) responds to Crispo v. Musk, 304 A.3d 567 (Del. Ch. 2023), which questioned whether a target corporation could enforce a provision defining damages to include the premium lost by its stockholders. Under Section 261(a)(1), a merger agreement may provide for penalties or other consequences for a pre-closing breach or a failure to close, expressly including damages measured by reference to a lost premium, and the corporation is entitled to enforce those provisions and retain the amounts recovered. So-called “Con Ed” provisions and reverse termination fee constructs are therefore back on firm statutory footing.

New Section 261(a)(2) confirms that a merger agreement may appoint a stockholders’ representative with exclusive authority to enforce stockholders’ rights under the agreement (indemnification and escrow arrangements being the typical use). The new section’s scope is limited to enforcement; it does not empower a representative to waive appraisal rights or fiduciary claims, or to bind stockholders to restrictive covenants.

Section 268 – Merger approval mechanics

Section 268(a) addresses the Section 251(b) requirement that a merger agreement address changes to the surviving corporation’s certificate of incorporation. Where all shares of a constituent corporation are being converted into or exchanged for cash, property, rights, or securities other than stock of the survivor, the merger agreement need not include such a provision as to that constituent corporation. Amendments to the surviving corporation’s certificate of incorporation adopted in the merger may instead be approved by or at the direction of the board and are not treated as amendments to the merger agreement.

Section 268(b) provides that disclosure schedules and similar documents delivered in connection with a merger agreement are not part of the agreement for DGCL purposes unless the agreement expressly says otherwise (the agreement should make it clear that schedules are not part of the agreement to ensure the agreement fits squarely in new Section 268(b)). Officers may therefore prepare and finalize schedules at the board’s direction without a separate board or stockholder approval of such schedules for statutory purposes.

Practice points

• Review stockholders’ agreements executed before August 2024 for any exposure.
• In board minutes, state affirmatively that the document was approved in final or substantially final form and identify the materials from which the material terms were determinable.
• Where a filing-related document is involved and the approval record is thin, use the Section 147 ratification mechanism before the filing becomes effective, rather than after.
• Confirm that merger agreements expressly address penalties or consequences for failure to close (if intended) and provide that schedules (or exhibits) are not part of the agreement consistent with Section 268(b).

2025 amendements

The 2025 amendments were adopted in two tranches. The first, which took effect on March 25, 2025, contains the most substantive changes. The second, which took effect August 1, 2025, is technical but contains at least one change of strategic value.

March 2025 amendments

These amendments took effect on March 25, 2025, and apply both prospectively and retroactively, except with respect to any action or proceeding commenced in a court of competent jurisdiction and completed or pending on or before February 17, 2025, or, for Section 220, inspection demands made on or before that date.

Section 144 – Safe harbors for conflicted transactions

Amended Section 144 codifies procedures that, if followed, shield directors, officers, and controlling stockholders from equitable relief and from damages for alleged breach of fiduciary duties. The required procedure depends on who is conflicted:

• Director or officer conflict: Requires (i) approval by a majority of the disinterested directors then serving or, if a majority of the board is not disinterested, a committee of at least two disinterested directors, acting in good faith and without gross negligence, or (ii) approval or ratification by a majority of the votes cast (as opposed to a majority of all outstanding shares) by disinterested stockholders in a fully informed, uncoerced vote.
• Controlling stockholder transaction (other than a going private transaction): Requires (i) negotiation and approval by a committee of disinterested directors, or (ii) approval or ratification by a majority of the votes cast (as opposed to a majority of all outstanding shares) by disinterested stockholders in a fully informed, uncoerced vote (where the transaction is conditioned on such disinterested stockholder approval or ratification).
• Controlling stockholder going private transaction: Requires both the disinterested committee and disinterested stockholder approval noted above for non-going-private controlling stockholder transactions.
• Fairness alternative: Where the safe harbor procedures are not satisfied, the act or transaction must be fair to the corporation and its stockholders (i.e., entire fairness as determined by a court).

These safe harbor procedural mechanics are specific and the expectation is that Delaware courts will apply them strictly and as written. For example, a disinterested committee must consist of two or more directors, and each of those directors, at least when initially appointed, must have been determined by the board to be disinterested directors. Directors, in forming a disinterested committee and in making decisions, must act in good faith and without gross negligence. In a controlling stockholder transaction, the committee must be empowered to negotiate and to reject the transaction.

Section 144 contains important definitions, such as the following:

• A disinterested director is one who is not a party to the transaction and who has neither a material interest in it different from that of stockholders generally nor a material familial, financial, professional, employment, or other relationship with a party having such an interest.
• For public company directors, Section 144(d)(2) adds a heightened presumption: A director whom the board determines satisfies the applicable exchange independence criteria is presumed disinterested, rebuttable only by substantial and particularized facts.
• A controlling stockholder is a stockholder who (i) owns a majority of the voting power of stock entitled to elect a majority of the directors (or voting power of directors), (ii) has the right to cause the election of a majority of the directors (or voting power of directors), or (iii) holds at least one-third of that voting power and also has the power to exercise managerial authority over the corporation’s business and affairs.

Section 144 safe harbors do not displace common law protections. A process that complies with the prior case law but not the statutory safe harbor remains available.

Section 220 – Books and records inspection rights

Amended Section 220 defines the universe of records subject to inspection:

• The certificate of incorporation and bylaws, including documents incorporated by reference.
• Annual financial statements for the preceding three years.
• Stockholder agreements entered into under Section 122(18).
• Minutes and written consents of stockholders, and communications to stockholders, in each case for the preceding three years.
• Minutes and records of actions by the board and its committees, together with the materials provided to directors in connection with those actions.
• Director and officer independence questionnaires.

In order for a stockholder to be entitled to inspect any records beyond this list will require either that the corporation does not maintain the specified categories of records, or the stockholder showing, by clear and convincing evidence, a compelling need – and, in either case, that the additional records are necessary and essential to the stockholder’s purpose.

The demand itself now carries express conditions:

• It must be made in good faith and for a purpose reasonably related to the stockholder’s interest as a stockholder.
• It must describe the purpose and the records sought with reasonable particularity.
• The records sought must be specifically related to that purpose.

On the production side, the statute codifies the corporation’s right to impose reasonable confidentiality, use, and distribution restrictions; to redact material not specifically related to the stated purpose; and to condition production on the stockholder’s agreement that produced information be incorporated by reference into any resulting complaint, which allows the court to consider that material on a motion to dismiss without converting the motion into one for summary judgment.

Practice points

• Build the record the statute rewards: Minutes should show the committee’s composition, the board’s disinterestedness determination as to each member and its basis, the committee’s mandate, and the completeness of the information on which it acted.
• When multiple acts or transactions are being approved, consider separating those acts or transactions into separate board, committee, or stockholder approvals under Section 144 to avoid any one such approval that is not compliant with Section 144 causing the other approvals to be noncompliant.
• Determine early whether any stockholder crosses the one-third-plus-managerial-authority threshold and document the analysis; the definition is now statutory and testable.
• For controlling stockholder transactions, confirm the disinterested stockholder vote condition is in place no later than submission to stockholders.
• Keep independence questionnaires current and rigorous – they are now both an enumerated inspection category and the evidentiary foundation for the Section 144(d)(2) presumption.
• Adopt a standing books-and-records protocol: assess particularity and nexus, produce under a confidentiality and use agreement, redact by reference to the stated purpose, and request incorporation by reference.
• Maintain good corporate records, such as minutes, because a lapse in record-keeping could be a gateway to broader document production, and a complete record could undercut allegations that the corporation did not comply with Section 144.

August 2025 amendments

These amendments took effect August 1, 2025.

Section 115 – Forum selection

Sections 102(f) and 109(b) – Fee shifting

The existing prohibition on certificate of incorporation and bylaw fee-shifting provisions, previously limited to internal corporate claims, now extends to any other claim brought by a stockholder acting as a stockholder or in the right of the corporation. The sections do not address privately negotiated fee-shifting arrangements outside the organizational documents.

Other sections

Other changes are administrative but consequential in practice:

• Section 103(f) confirms the power to file a certificate of correction nullifying a previously filed instrument that inaccurately records the action taken or was defectively executed (as has been common practice).
• Section 132 prohibits a registered agent from performing its duties solely through a virtual office or a mail forwarding service, and Section 132 and the franchise tax provisions of the DGCL no longer treat the registered office as the corporation’s principal office or place of business.
• Section 155 no longer permits fractional shares in bearer form.
• Sections 252(c) and 311 update the required contents of certificates of merger and of revocation of dissolution or restoration.
• Sections 312 and 377 and the franchise tax provisions of the DGCL tighten the payment and annual report obligations of revived corporations, forfeited foreign corporations, and corporations filing certificates of correction or validation.

2026 amendements

These amendments took effect on August 1, 2026.

Section 242(d) and the effect of a Section 242(b)(2) opt-out

Section 242(b)(2) requires a separate class vote to increase or decrease the authorized shares of a class but permits the certificate of incorporation to opt out of that requirement so that the change may be approved by a majority in voting power of the outstanding shares entitled to vote, irrespective of Section 242(b)(2). Section 242(d), added in 2023, provides that, for corporations whose shares of the class are listed on a national securities exchange, an increase or decrease in authorized shares of a class of stock may be approved if the votes cast for the amendment by holders of such class exceed the votes cast against, unless the certificate of incorporation provides otherwise.

Prior to this amendment, it was not entirely clear whether a legacy Section 242(b)(2) opt-out (which typically recites a majority-of-outstanding-shares voting standard) also functions as an election out of the lower votes-cast standard. In Salama v. Simon, 328 A.3d 356 (Del. Ch. 2024), aff’d, 342 A.3d 373 (Del. 2025), the Court of Chancery found the statutory language ambiguous but resolved the ambiguity for the defendants, reasoning that treating widespread legacy opt-outs as elections out of Section 242(d) would handicap the provision’s purpose. The court noted, however, that it saw no indication that Section 242(d) was meant to override opt-outs adopted after its enactment.

This amendment closes that gap. A certificate of incorporation provision reciting that the authorized shares of a class may be increased or decreased by the affirmative vote of the holders of a majority of the stock, or of the votes of such stock, irrespective of Section 242(b)(2) does not override Section 242(d). To override the Section 242(d) votes-cast standard, the provision must either state expressly that the corporation elects not to be governed by Section 242(d) or require a greater or additional vote than Section 242(b)(2) would require for such an amendment (e.g., two-thirds of the outstanding voting stock).

Section 275 – Dissolution, registered agents, and service of process

Sections 275(d) and (f) now require a certificate of dissolution to include an agreement that the corporation may be served with process in Delaware by service on the Delaware secretary of state, and to specify the address to which the secretary of state will forward copies of process. New Section 275(h) provides that the registered agent’s authority and responsibilities terminate when the dissolution becomes effective, except as to process the agent received before that time. New Section 275(i) supplies the mechanics:

• Service may be made by electronic transmission as prescribed by the secretary.
• Process must be served in duplicate and plaintiff must pay a fee, which fee is taxed as costs in the proceeding if the plaintiff prevails.
• The secretary must promptly forward process to the designated address by mail or courier and keep records of mailing and delivery.
• The secretary must retain a record of service for at least five years.

Section 312(j) – Revival of nonstock corporations

Section 312(j) governs revival of a nonstock corporation whose certificate of incorporation has become forfeited or void for failure to file reports or pay franchise taxes. The amendment deletes the reference to action by members entitled to vote on a dissolution and clarifies that member action is required only if any is necessary – read with Section 312(h), that means only where there are no persons then serving on the governing body. In the ordinary case, the governing body may authorize revival on its own.

Practice points

• Closely review Section 242(b)(2) opt-outs in certificates of incorporation. A legacy opt-out no longer blocks reliance on Section 242(d), which may materially change the vote you need for an authorized share increase.
• Where a corporation wants the higher voting standard, amend to say so expressly or to specify a supermajority. Reciting a voting standard is no longer sufficient.
• Going forward, draft Section 242(b)(2) opt-outs without reciting a voting standard at all unless an opt-out of Section 242(d) is intended.
• Update certificate of dissolution forms and wind-down checklists to capture the service-of-process agreement and the forwarding address.
• Advise dissolving clients that the registered agent’s role ends at effectiveness and keep the forwarding address current for at least the five-year record retention period.
• For nonstock clients, revival no longer needs a member vote where a governing body is in place.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.