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From New York to Delaware: The Process of Redomesticating a New York Corporation
Form a Company, Articles, Grow Your Company Guest Contributor Form a Company, Articles, Grow Your Company Guest Contributor

From New York to Delaware: The Process of Redomesticating a New York Corporation

By Ashna Pai

It is a common story we have heard from many emerging company clients: a young New York-based entrepreneur wants to start a company. The entrepreneur decides to incorporate his or her company in New York, believing New York to be the most obvious and best logistical choice because New York is where they are based, where the operations of the company, including its employees, offices etc. are to be based, and, not to mention, because of the many opportunities, diverse talent and creativity that has always attracted start-up companies to New York. Fast forward a couple of years, the company is starting to take off and has caught the eye of several institutional investors who are willing to invest in the company’s growth, however, before investing they are requiring the company to be incorporated in Delaware. Why? As many entrepreneurs will soon learn, Delaware is considered to be the “gold standard” among many for a corporation’s domicile. It is known to be business and management friendly, there is an extensive body of corporate cases for companies to refer to, it follows the “business judgement rule” regarding decisions of directors, and generally, the laws tend to be flexible and favorable for founders and their investors.

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Fixing Void or Voidable Stock Issuances with Section 204 of the Delaware General Corporation Law ("DGCL")
Raise Capital, Articles Guest Contributor Raise Capital, Articles Guest Contributor

Fixing Void or Voidable Stock Issuances with Section 204 of the Delaware General Corporation Law ("DGCL")

By Paula Valencia-Galbraith

Has your corporation sold stock before having a sufficient number of shares authorized under its Certificate of Incorporation?  The DGCL requires that the authorized capital be increased before the sale is consummated because the Corporation needs to create the stock it is going to sell.  Without the stock’s creation there is nothing to sell to the investors and failure to increase the authorized capital could deem the sale and issuance void or voidable due to the Corporation’s failure to comply with the technicalities of the DGCL. Before 2014 there was no mechanism that could retroactively fix issuing equity with an insufficient number of authorized capital or any other type of transaction that required certain technical requirements by the DGCL.  These types of mistakes led to potentially embarrassing conversations with a corporation’s investors but in 2014 this all changed.

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You’ve Got Mail! Emails May Be Subject to Stockholder Books and Records Requests
Articles, Protect Your Idea and Data Guest Contributor Articles, Protect Your Idea and Data Guest Contributor

You’ve Got Mail! Emails May Be Subject to Stockholder Books and Records Requests

By Zachary Liebnick and Zane Polston

Delaware corporations have always been required to provide certain information to their stockholders under Section 220 of the Delaware General Corporation Law (DGCL), but the scope and form of that information  has naturally changed as technology advances.

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CAUTION: Director Veto Rights in Financing Documents May Constitute “Disproportionate Voting”
Articles, Raise Capital, Grow Your Company Lewis Geffen Articles, Raise Capital, Grow Your Company Lewis Geffen

CAUTION: Director Veto Rights in Financing Documents May Constitute “Disproportionate Voting”

By Lewis Geffen

Section 141(d) of the Delaware General Corporations Law (DGCL) allows the certificate of incorporation (COI) of a Delaware corporation to confer upon one or more directors voting powers greater than or less than those of other directors, thus resulting in “disproportionate voting” rights amongst the Directors.

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Liability Considerations for Delaware Public Benefit Corporations
Form a Company, Articles Will Perkins Form a Company, Articles Will Perkins

Liability Considerations for Delaware Public Benefit Corporations

By Will Perkins and Christina Bailey

A public benefit corporation (PBC) is a statutorily designated type of corporation in Delaware that melds two concepts that are often seen as opposites: maximizing profit and providing public benefit. This choice of entity presents a compromise for those companies who are committed to operating in a responsible and sustainable manner, while acting as a for-profit entity.

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