Despite Coinbase departure, only 28 companies left Delaware this year

Elon Musk has been pushing hard for companies to exit Delaware and reincorporate elsewhere, following the lead of his companies Tesla and SpaceX. Coinbase became the latest to take the leap, announcing this week that it was moving its state of incorporation to Texas from Delaware.

Despite Musk’s proclamation that “Delaware continues to bleed companies,” those departing the state make up a distinct minority.

According to the Delaware secretary of state’s office, only 28 companies have deincorporated from the state this year. Meanwhile, as of the end of September, 249,214 new entities were formed in Delaware this year, an increase of 14% from the same period in 2024, the data show.

Musk’s decision to relocate his companies followed a Delaware Chancery Court ruling that ordered Tesla to rescind the CEO’s 2018 pay package, worth about $56 billion in options. Musk has asked the Delaware State Supreme Court to undo that ruling and the matter is now on appeal.

Venture firm Andreessen Horowitz, which helped finance Musk’s Twitter takeover and funded Coinbase, subsequently urged companies to incorporate outside of Delaware in a scathing critique this summer, arguing that Delaware has too much “legal uncertainty” due to recent judicial decisions. The firm incorporated in Nevada.

Coinbase CEO Brian Armstrong and Marc Andreessen currently face a lawsuit in Delaware concerning the sale of shares in Coinbase tied to the crypto company’s public listing in 2021.

Other notable names to announce their Delaware departures this year include Dillard’s, Dropbox, Roblox and fintech company Affirm, founded by Max Levchin, who along with Musk is part of the so-called PayPal mafia.

Almost all of the companies that left Delaware reincorporated in Nevada. Coinbase and Dillard’s said they were headed to Texas, while Simon Property Group chose Indiana. President Donald Trump’s social media company, Trump Media & Technology, said it’s going to Florida, the president’s home state.

Benjamin Edwards, associate dean at the University of Nevada Las Vegas Boyd School of Law, said one reason Nevada appeals to companies is that corporate law there clearly states when executives or board members will be held liable should bad things happen on their watch.

“If you do something wrong, and you know it was wrong when you did it, that’s when you will have liability in Nevada,” Edwards said.

Still, Delaware dominates the incorporation market.

Last year, Delaware hosted over 2.1 million legal entities, saw 289,810 new business entities formed in the state, and attracted 81.4% of U.S. IPOs, up from 79% between 2022 and 2023. Edwards said he expects the Delaware number to hover around 75% this year.

Delaware’s attractiveness is due in part to what’s viewed as a flexible corporate code and expert judiciary, and the state is seen as balancing the rights of executives and shareholders.

“Our business-friendly environment has been built over decades, grounded in laws and courts that respect the good faith judgments of directors and officers, allowing efficient decision-making that accommodates the needs of modern businesses operating in a dynamic environment, while providing appropriate safeguards to investors against fraud and fiduciary overreach,” said Delaware Secretary of State Charuni Patibanda-Sanchez in an email.

Meta, which considered leaving Delaware earlier this year, stayed in the state after the legislature, encouraged by Democratic Governor Matt Meyer, rushed to enact changes to its corporate laws. The bill, SB21, was drafted by a group of scholars and attorneys with law firms that had represented Meta and Musk.

WATCH: Coinbase moves incorporation to Texas from Delaware