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Exclusive Forum Provisions

We have previously blogged about Delaware corporations considering, and Delaware courts upholding, “exclusive forum” provisions in their charter documents. These provisions require stockholder derivative and other intra-corporate lawsuits to be filed in the Delaware Court of Chancery.

Last week, following overwhelming support in the Delaware Legislature, the Delaware Governor signed into law an amendment to the Delaware General Corporation Law that expressly authorizes provisions in the corporation’s certificate of incorporation or bylaws establishing Delaware as the exclusive forum for “internal corporate claims.” Internal corporate claims…
Continue Reading Delaware Permits Exclusive Forum Provisions, Bars Fee-Shifting Provisions

Batts, Ed_Headshot.jpgCONTRIBUTED BY
Ed Batts
ed.batts@dlapiper.com

Proposed amendments to the Delaware General Corporations Law (DGCL) for 2014 aim to significantly streamline routine questions that often prove vexing for emerging growth companies and newly formed subsidiaries of larger companies.

It is a fact of life that people leave jobs.  They move to other cities, whether for family or lifestyle.  They quit for perceived greener pastures.  They retire.  Or they are hit by the proverbial bus.  Forming a company under Delaware law historically has had a pitfall:  a “sole incorporator” (often a paralegal) forms the initial company, one assumes promptly appoints one or more directors and then, one further assumes, immediately resigns.

But sometimes that paperwork is lost, overlooked (particularly if creating a new subsidiary for a larger company) or forgotten in the midst of workloads, or a company founder without the benefit of legal counsel did the incorporation and neglected to resign.  An existential crisis involving numerous lawyers scratching their heads can ensue if the resignation paperwork does not exist and the original sole incorporator cannot be located or refuses to cooperate.
Continue Reading Reducing startup brain damage: Delaware moves to further streamline corporate processes for emerging companies