Delaware General Corporation Law (DGCL)
Delaware's corporate statute, codified at title 8 of the Delaware Code. It governs the internal affairs of a Delaware corporation wherever that corporation operates, which is why a Texas owner with a Delaware holding company answers to it. Its interpretive gloss comes from the Court of Chancery, a non-jury court of equity, and the Delaware Supreme Court.
The Delaware General Corporation Law governs corporations incorporated in Delaware. It sits at title 8, chapter 1 of the Delaware Code. A Texas business owner keeps hearing about it for one reason: under the internal affairs doctrine, the law of the state of incorporation governs the relationships among the corporation, its directors and its stockholders. Operate entirely in Houston, hold every asset in Texas, employ only Texans, and if the holding company is a Delaware corporation then Delaware law decides whether your board breached a duty.
Why it became the default
Two reasons. The statute is enabling rather than prescriptive, so it lets sophisticated parties allocate power by charter and by contract instead of forcing a fixed structure on them. The bigger reason is the Court of Chancery, a court of equity that hears corporate disputes without a jury, staffed by judges who do this work full time and write long, reasoned opinions. Appeals run to the Delaware Supreme Court. The output is a century of decided law on questions most states have never reached even once. That accumulated case law is what venture investors, underwriters and strategic acquirers are actually buying when they insist on a Delaware entity.
Predictability cuts both ways. The same body of law produced the standards that make controller transactions slow and expensive to defend, and that friction is what sits behind the recent departures.
The 2024 and 2025 amendments
Delaware moved twice, fast, in response to Chancery decisions and competitive pressure.
Senate Bill 313, effective August 1, 2024, added Section 122(18), authorizing a corporation to contract directly with stockholders to restrict or prohibit specified corporate actions or to require approval of them. That answered West Palm Beach Firefighters' Pension Fund v. Moelis & Co., 311 A.3d 809 (Del. Ch. 2024), which had held that such governance arrangements were invalid unless placed in the certificate of incorporation. Read that decision carefully before relying on it, because the Delaware Supreme Court reversed it on January 20, 2026. Provisions of that kind are voidable rather than void, so equitable defences apply to them, and the claim in that case was barred by laches. The same bill amended Section 147 to let a board approve an agreement in final or substantially final form, and Section 261 to confirm that a merger agreement may provide for lost premium damages and may appoint a stockholder representative, which addressed the problem raised in Crispo v. Musk.
Senate Bill 21, effective March 25, 2025, went considerably further. It rewrote Section 144 to create statutory safe harbors for transactions involving interested directors, interested officers and controlling stockholders, and it defined controlling stockholder by statute for the first time. It also rewrote Section 220 to enumerate the specific categories of books and records a stockholder may demand, with three year lookbacks on several of them, and to require a showing of compelling need supported by clear and convincing evidence before a court orders anything beyond that list.
SB 21 drew an immediate constitutional challenge. The Delaware Supreme Court rejected it in Rutledge v. Clearway Energy Group LLC, No. 248, 2025 (Del. Feb. 27, 2026), holding that the safe harbors do not unconstitutionally divest the Court of Chancery of equitable jurisdiction, because Chancery retains jurisdiction to decide whether the statutory prerequisites were met, and that retroactive application satisfied due process.
What this means for a Texas company
If your entity is a Delaware corporation, you are on Delaware law until you convert. Texas provisions such as Section 21.419 of the Business Organizations Code do nothing for you, no matter where your offices are. If you are choosing where to incorporate, the honest comparison is between a deep and now partly codified Delaware body of law and a Texas regime that is newer, much thinner in decided cases, and drafted to be protective of directors. Neither answer is automatic. It usually turns on who your investors are and what their counsel will accept.