Delaware’s 2025 Business Entity Amendments Part 1: Amendments to General Corporation Law
Consistent with Delaware’s practice of updating its business laws annually, on June 30, 2025, Delaware Governor Matthew S. Meyer signed Senate Bill 95 (SB 95) into law. SB 95 amends Title 8 of the Delaware General Corporation Law (DGCL) and is generally effective August 1, 2025.
What This is: Consistent with Delaware’s practice of updating its business laws annually, on June 30, 2025, Delaware Governor Matthew S. Meyer signed Senate Bill 95 (SB 95) into law. SB 95 amends Title 8 of the Delaware General Corporation Law (DGCL) and is generally effective August 1, 2025.
What This Means: Let’s look at the highlights of some of the key aspects of SB 95.
Corporate Affairs
SB 95 amends sections of the DCGL to be consistent with the holding in the Delaware Supreme Court Case Salzberg v. Sciabacucchi, 227 A.3d 102 (DE 2020), which provides, among other things, that a certificate of incorporation is permitted to address and regulate internal corporate claims and additional intra-corporate affairs claims so long as the provision at issue is consistent with public policy.
Contents of Certificate of Incorporation and Bylaw Provisions
Under existing law, both the certificate of incorporation and the bylaws are not permitted to contain any provisions that would impose liability on a stockholder for the attorney’s fees or expenses of the corporation or any other party in connection with an internal corporate claim. SB 95 prohibits provisions imposing liability in connection with any other claim that a stockholder, acting in its capacity as a stockholder or in the right of a corporation, has brought in an action, suit or proceeding.
Forum Selection
SB 95 expands DCGL Section 115 to include claims beyond internal corporate claims. Per SB 95, with respect to claims that fall under a broader category of “intra-corporate affairs”, the certificate of incorporation or bylaws may require stockholders, when acting in their capacity as stockholders or in the right of the corporation, to bring any or all such claims only in 1 or more prescribed forums or venues. The claims must relate to the corporation’s business, or conduct of its affairs, or the rights or powers of the corporation, or its stockholders, directors or officers. Such requirement must be consistent with applicable jurisdictional requirements and allows a stockholder to bring the claims in at least one court in Delaware that has jurisdiction over the claims.
Virtual Office Prohibition for Registered Agent
SB 95 prohibits a registered agent of a corporation from performing its duties or function only through use of a virtual office, retaining a mail forwarding service or both. A virtual office exists when duties and functions are performed only through the internet or other means of remote communication.
Registered Office in Delaware
Under SB 95, every corporation must have and maintain in Delaware a registered office which may, but need not be, a place of the corporation’s business in Delaware. The registered office means the address of the registered agent in Delaware being appointed to accept service of process and otherwise perform the duties of a registered agent. Provisions have been removed which included a consideration of principal office or principal place of business as the registered office under certain circumstances, e.g. listing in certain documents.
Nullification Provisions
In addition to existing law that allows for correction of previously filed certificates with the Secretary of State, under SB 95, a certificate of correction may nullify such previously filed certificates. The certificate of correction must specify the inaccuracy or defect with respect to the certificate, must provide for the nullification of the certificate and must be executed and filed as provided by law. As with instruments of correction, an instrument that is nullified will take effect as of the date the original instrument was filed. For those persons adversely affected, the instrument as corrected or nullified will be effective from the filing date.
Share Fractions
SB 95 prohibits a corporation from issuing scrip or warrants in bearer form (represented by a certificate) in place of issuing fractions of stock. The corporation may still issue scrip or warrants in registered form (either represented by a certificate or uncertificated) in place of share fraction issuance. (The Corporate Transparency Act prohibits corporations from issuing certificates in bearer form.)
Merger or Consolidation
SB 95 removes one of the required provisions in a certificate of merger or consolidation. The certificate of merger or consolidation is no longer required to include the authorized stock of each constituent foreign corporation if the corporation surviving or resulting from the merger or consolidation is a domestic corporation.
Revocation and Restoration Changes
Under the new law, two additional provisions are required to be included in a corporation’s certificate of revocation of dissolution or certificate of restoration of an expired corporation which are: the date of filing of the corporation’s original certificate of incorporation with the Secretary of State; and the date of filing of the corporation’ certificate of dissolution with the Secretary of State.
Revival of Certificate of Incorporation, and Defective Corporate Acts
If a filing of a certificate of validation of defective corporate acts relates to a time during which a corporation’s certificate of incorporation has been forfeited or void, SB 95 provides that the required annual reports, annual franchise taxes, and interest for the period in which the corporation’s certificate of incorporation had been forfeited or void, must be filed and paid at the time of the filing of the certificate of validation.
Reinstatement of Foreign Corporation’s Qualification to Do Business
A foreign corporation’s certificate of reinstatement after it has been forfeited must now be accompanied by the filing of all annual reports and the payment of all fees that would have been required during the time the foreign corporation’s qualification to do business in Delaware had been forfeited.
Annual Franchise Tax Report
Under the new law, the annual franchise tax form must include the nature of the corporation’s business. The annual franchise tax report also requires a listing for the corporation’s principal place of business and notes that unless a corporation maintains its principal place of business in Delaware and serves as its own registered agent, the principal place of business address cannot be the registered office address of the corporation in Delaware. The amendment adds that this principal place of business address must not be the address of any other registered agent.
Need a registered agent? We handle your time-sensitive communications.
Franchise Tax Interest Computation
Per SB 95, the filing of a certificate of validation of corporate acts will not reduce the interest owed for any period before the filing of a certificate of validation and will not entitle the corporation to a refund. Interest due for any period before the filing of a certificate of validation will be calculated at the current rate in effect.
An annual franchise tax provision for regulated investment companies has been repealed.
Refunds
Under existing law, a corporation may petition the Secretary of State for a reduction or refund of annual franchise taxes, interest, and penalties under certain circumstances. The new law provides that no refund will be granted in connection with the filing of a certificate of correction or the filing of a certificate of validation.
Effective Dates
Most of the bill generally becomes effective on August 1, 2025. The provision relating to the elimination of franchise tax rate for investment companies takes effect for tax years beginning on or after January 1, 2026.
For the text of the bill, please see:
Additional Amendments
Delaware has also amended its Limited Liability Company and Partnership Laws. For more information, please see our companion articles: Delaware’s 2025 Business Entity Amendments Part 2: Amendments to the Revised Uniform Partnership Act, Delaware’s 2025 Business Entity Amendments Part 3: Amendments to the Revised Uniform Limited Partnership Act and Delaware’s 2025 Business Entity Amendments Part 4: Amendments to the Limited Liability Company Act. For a refresher on the sweeping amendments that Delaware made to its DGCL earlier this year, please see: Delaware Makes Notable Changes to Its General Corporation Law.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
Leave Us A Comment
Did you find this article useful? We'd love to hear your thoughts. Join the conversation by leaving a comment or question below.