Developments in Delaware Corporate Law
On March 25, 2025, Delaware Gov. Matt Meyer signed amendments to the Delaware General Corporation Law (DGCL), introducing notable changes to Sections 144 and 220 of the DGCL. These amendments took immediate effect and may impact your company’s governance, transactional planning and approach to future disputes. The amendments were adopted in response to increased stockholder litigation and aimed at preserving confidence in Delaware as a leading jurisdiction for incorporation, all in the context of publicity surrounding companies that have changed, or discussed changing, their jurisdiction to Texas or other jurisdictions.
Key Changes to Section 144
Expanded Safe Harbors: Section 144 has been transformed into a statutory safe harbor, including safe harbors for transactions involving interested directors, officers and/or controlling stockholders. The amendments provide clearer frameworks for conflicted transactions, controlling stockholder transactions, and “go private” transactions for public companies.
Liability Shield: The amendments provide liability protections for conflicted director or officer transactions, precluding equitable relief and monetary damages if certain procedural safeguards are met.
Key Changes to Section 220
Limitations on Books and Records Requests: The amendments to Section 220 aim to limit the scope of stockholder demands to the books and records specified in the statute. The stockholder must satisfy certain requirements before inspecting the books and records, and the company may place reasonable restrictions on the confidentiality, use and distribution of the books and records and redact portions of the books and records not related to the stockholder’s purpose for inspection.
Because these amendments permit greater flexibility, clarity and protection for Delaware companies, any company incorporated or organized in Delaware should review its governing documents to ensure the company may take full advantage of Delaware law.
Key Changes to Section 144
Expanded Safe Harbors: Section 144 has been transformed into a statutory safe harbor, including safe harbors for transactions involving interested directors, officers and/or controlling stockholders. The amendments provide clearer frameworks for conflicted transactions, controlling stockholder transactions, and “go private” transactions for public companies.
Liability Shield: The amendments provide liability protections for conflicted director or officer transactions, precluding equitable relief and monetary damages if certain procedural safeguards are met.
Key Changes to Section 220
Limitations on Books and Records Requests: The amendments to Section 220 aim to limit the scope of stockholder demands to the books and records specified in the statute. The stockholder must satisfy certain requirements before inspecting the books and records, and the company may place reasonable restrictions on the confidentiality, use and distribution of the books and records and redact portions of the books and records not related to the stockholder’s purpose for inspection.
Because these amendments permit greater flexibility, clarity and protection for Delaware companies, any company incorporated or organized in Delaware should review its governing documents to ensure the company may take full advantage of Delaware law.
