Not just Tesla: Why so many companies incorporate in Delaware
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- เผยแพร่เมื่อ 3 มิ.ย. 2024
- Tesla’s (TSLA) CEO Elon Musk has called for a shareholder vote to move Tesla’s incorporation to Texas. What would he want to move Tesla to the "Lone Star State"?
Ann Lipton, Tulane Law Associate Professor joins Yahoo Finance Live anchors Julie Hyman and Josh Lipton to discuss what this move could look like for the EV giant-and why Delaware has been a popular state for incorporation. Lipton explains that Delaware became a preferred choice in the early 1900s, and that due to its courts and its offering of “a very up-to-date corporate law that responds to the latest trends,” it has maintained that status. Delaware is unique in that it has a specialized court that hears business disputes only-where only chancellors who are experts preside.
This system, according to Lipton allows for “reliable decisions,” in a shorter time. Delaware has been able to create a “network effect,” notes Lipton, who states that precedence has been set to the point that generally outcomes are clear and easier to reach.
Acknowledging Nevada as a comparable to Delaware in some ways, Lipton sees it as “attractive” to some, but flexibility and freedom is limited for investors. “Nevada has carved out a little niche for itself,” according to Lipton.
Speaking on the process to incorporate in Texas, Lipton expects there would be “some hold ups." Lipton does not see Musk gaining any wiggle-room apart from the greater possibility of “friendly judges” in Texas, and states that “it's definitely a risky move,” for Musk.
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Very informative!
Excellent!
Thanks 🙏
😎
👍
Thats history. When judges make capricious descions then flexibilty is not on your side. Time for business to flex its muscle judges should not interfere in capitalist system when all parties have prospered. Is the uncertainty her decision has.created benfivial to shareholders??
Elon almost failed with Tesla like 3 or 4 times. His brother went into bankruptcy because Elon asked for every penny to help. His brother shared a story where complete strangers, but known fans of Tesla, had to help deliver cars. They could have just driven off with cars, but they didn’t. $55B is excessive, but shareholders agreed to pay it. So he should be paid.
😱😶
Elon has out performed.
I guess he needs to learn to underperform!!