James Griffin-Stanco is a partner in the Wilmington office of Wilson Sonsini Goodrich & Rosati, where he maintains a Delaware corporate law and corporate governance practice, providing advice to clients through all stages of a company’s life cycle, including with regard to fiduciary duties, entity formation, venture financings, public offerings, mergers and acquisitions, and statutory requirements. He also represents special committees of boards of directors in mergers, internal investigations and other transactions, and provides corporate advice in the context of litigation and appraisals.
James currently serves as a member of the firm’s Hiring Committee and Diversity and Inclusion Committee.
James Griffin-Stanco is a partner in the Wilmington office of Wilson Sonsini Goodrich & Rosati, where he maintains a Delaware corporate law and corporate governance practice, providing advice to clients through all stages of a company’s life cycle, including with regard to fiduciary duties, entity formation, venture financings, public offerings, mergers and acquisitions, and statutory requirements. He also represents special committees of boards of directors in mergers, internal investigations and other transactions, and provides corporate advice in the context of litigation and appraisals.
James currently serves as a member of the firm’s Hiring Committee and Diversity and Inclusion Committee.
- J.D., Georgetown University Law Center, 2010Cum Laude; Executive Editor, Georgetown Journal of International Law
- B.A., Boston University, 2005Cum Laude
- Chair, Delaware State Bar Association LGBTQ+ Section
- Member, American Bar Association
- Member, Delaware State Bar Association
- State Bar of California
- State Bar of Delaware
- State Bar of New Jersey
- J.D., Georgetown University Law Center, 2010Cum Laude; Executive Editor, Georgetown Journal of International Law
- B.A., Boston University, 2005Cum Laude
- Chair, Delaware State Bar Association LGBTQ+ Section
- Member, American Bar Association
- Member, Delaware State Bar Association
- State Bar of California
- State Bar of Delaware
- State Bar of New Jersey
The Reliance on Delaware Compared to Other States
The sheer number of entities formed in Delaware reflects its dominance in this area. In 2022, more than 313,650 entities were formed in the state of Delaware, resulting in more than 1.9 million entities total in Delaware.[1] Delaware also continues to be the state of incorporation for nearly 68.2 percent of the Fortune 500, 65 percent of the S&P 500,[2] and approximately 79 percent of all U.S. initial public offerings in calendar-year 2022.[3] Of course, those numbers reflect that a substantial portion of entities are incorporated elsewhere, both within and outside of the United States. The Chief Justice of Delaware’s Supreme Court has noted that business entities indirectly or directly generate about a third of the state’s revenue.[4]
It also bears noting that Delaware has not always held the distinction as the favored destination for incorporations. Prior to the early 1900s, New Jersey had been the most significant state for incorporations.[5] Aware of New Jersey’s early success and in an effort to encourage corporations to domicile in Delaware, Delaware amended its constitution in 1897 to permit incorporation under general law instead of by special legislative mandate, and in 1899 adopted a general corporation law modeled largely after New Jersey’s approach.[6] These developments, in addition to the written opinions issued by Delaware’s Court of Chancery, helped make Delaware a natural home for corporations looking to leave New Jersey after that state adopted more restrictive laws related to corporations and trusts in 1913.[7]
A corporation’s state of incorporation is significant because that state’s laws govern the corporation’s internal corporate governance and inform how judges will review the conduct of directors and officers in stockholder litigation. As will be discussed in greater detail below, there are a number of factors that have made Delaware a favored state of incorporation for over a century.[8]
Why Is Delaware in Question?
Of course, it is critical to understand why some have called Delaware’s dominance into question. Some of the doubt has come from famous sources, such as Elon Musk’s much-publicized X (formerly Twitter) post stating, “Never incorporate your company in the state of Delaware” after the Delaware Court of Chancery rescinded his compensation package at Tesla.[9] Tesla’s stockholders are now expected to vote on the conversion of Tesla from a Delaware corporation to a Texas corporation at the company’s annual stockholder meeting on June 13, 2024.[10] In the conversations that we have had with clients, businesspeople, and others in the corporate bar, we have heard the following reasons given for reconsidering incorporation in Delaware:
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