Business/Corporate

When forming or relocating a company, one of the most important decisions a business can make is selecting the state of incorporation. For decades, Delaware has dominated as the jurisdiction of choice for public companies, venture-backed startups, and private equity investors. However, Texas has rapidly become a competitive alternative—offering a robust legal framework, lower costs, and proximity to major markets and decision-makers.

Vanguard Legal PLLC, with offices in Houston and Dallas, advises founders, investors, and established corporations on entity formation, governance, and corporate redomiciliation between Delaware and Texas.

Delaware earned its reputation as the premier state of incorporation due to several longstanding advantages:

• Predictable Corporate Law: The Delaware General Corporation Law (DGCL) is one of the most developed and tested in the United States. Thousands of court decisions provide clarity on fiduciary duties, mergers, and shareholder rights.

• Specialized Court System: The Delaware Court of Chancery hears corporate disputes without juries and is staffed by judges experienced in complex business law.

• Investor Familiarity: Institutional investors, venture capital funds, and public markets are accustomed to Delaware corporations, which can facilitate financing and IPOs.

• Flexible Corporate Structure: Delaware permits multiple classes of stock, customized voting rights, and streamlined board governance structures.

These features have made Delaware the state of incorporation for the majority of U.S. public companies and nearly all venture-backed startups.

In recent years, Texas has made significant strides to attract companies to incorporate or redomicile in the state.

• Business-Friendly Environment: Texas has no state income tax, competitive regulatory policies, and a lower cost of doing business.

• Modernized Corporate Law: The Texas Business Organizations Code (TBOC) provides flexibility for corporations, LLCs, and limited partnerships, while maintaining strong protections for directors and shareholders.

• Thriving Business Ecosystem: With corporate hubs in Houston, Dallas, and Austin, Texas has become a magnet for energy, technology, and manufacturing companies.

• Local Governance Advantage: Companies headquartered in Texas often prefer to incorporate locally to align legal domicile with operational presence, simplifying compliance and litigation management.

Notably, several high-profile companies have moved their legal domicile or corporate headquarters to Texas, including:

• Tesla, Inc. – relocated its corporate headquarters to Austin.

• Oracle Corporation – announced its move to Austin to centralize operations.

• Hewlett Packard Enterprise (HPE) – moved its headquarters to Houston.

• CBRE Group and Caterpillar Inc. also shifted headquarters to Texas, reflecting the state’s growing corporate momentum.

While not all of these transitions involved formal redomestication from Delaware, they underscore Texas’s rising prominence as a home for large, publicly traded companies.

Texas law allows a Delaware corporation to convert or domesticate as a Texas entity through a straightforward statutory process. Vanguard Legal assists clients through each step of this transition, which generally includes:

1. Board and Shareholder Approval: The Delaware corporation’s board of directors must adopt a plan of conversion, and shareholders must approve it according to Delaware law.

2. Plan of Conversion: The plan outlines the terms, effective date, and treatment of shares, rights, and obligations after conversion.

3. Filing Delaware Certificate of Conversion: The corporation files a Certificate of Conversion and related documents with the Delaware Secretary of State to terminate its Delaware domicile.

4. Filing Texas Certificate of Formation and Certificate of Conversion: The company simultaneously files a Certificate of Formation and Certificate of Conversion with the Texas Secretary of State, officially continuing as a Texas corporation.

5. Tax and Regulatory Filings: The company must update its EIN records, registered agent, and business licenses, and review any state or federal tax implications of the change.

Once complete, the entity continues seamlessly in Texas, preserving its corporate existence, EIN, contracts, and ownership structure—only its legal domicile changes.

For venture-backed or publicly traded companies, Delaware often remains the preferred choice due to investor expectations and established legal precedents.
For closely held, private, or Texas-based businesses, incorporation or conversion to Texas can reduce costs, simplify compliance, and provide proximity to key business and regulatory stakeholders.

Vanguard Legal PLLC helps clients evaluate the legal, tax, and strategic implications of incorporation or redomiciliation to ensure the structure supports long-term business goals.