The number of companies choosing to leave Delaware remains small, despite public pressure from Elon Musk and recent high-profile departures. Coinbase became the latest to move its state of incorporation, announcing this week that it will shift from Delaware to Texas. Musk has urged firms to follow Tesla and SpaceX in exiting Delaware, claiming the state is “bleeding companies.”
Data from the Delaware secretary of state’s office shows a different picture. As of the end of September, only 28 companies have deincorporated this year. In the same period, 249,214 new business entities were formed in the state, a 14% increase from 2025. Delaware remains the dominant choice for incorporation, supported by laws and a judiciary known for handling corporate matters.
Musk’s relocations followed a Delaware Chancery Court ruling ordering Tesla to rescind his 2018 pay package valued at about $56 billion. Musk has appealed to the Delaware State Supreme Court. Venture firm Andreessen Horowitz, which funded Musk’s Twitter acquisition and has backed Coinbase, also criticized Delaware this year, calling recent judicial decisions a source of “legal uncertainty.” The firm incorporated in Nevada. Coinbase CEO Brian Armstrong and Marc Andreessen are also facing a Delaware lawsuit related to Coinbase share sales during its 2021 public listing.
Companies choosing to leave include Dillard’s, Dropbox, Roblox and Affirm, the fintech founded by Max Levchin. Most relocated to Nevada. Coinbase and Dillard’s selected Texas, Simon Property Group moved to Indiana and Trump Media & Technology said it is shifting to Florida.
Legal experts say Nevada appeals to certain firms because of clearer liability standards for executives. Benjamin Edwards of the University of Nevada Las Vegas Boyd School of Law said liability in Nevada is tied to knowingly wrongful actions, giving companies a defined threshold. Still, Delaware continues to dominate. Last year, the state hosted more than 2.1 million legal entities, saw 289,810 new formations and drew 81.4% of U.S. IPOs. Edwards expects the figure to hover around 75% this year.
Delaware Secretary of State Charuni Patibanda-Sanchez said the state’s business environment is rooted in flexibility, experienced courts and laws that support directors’ and officers’ good-faith decisions while protecting investors from fraud and fiduciary misconduct.
Earlier this year, Meta considered leaving Delaware but remained after legislators — encouraged by Democratic Governor Matt Meyer — passed changes to corporate law. The bill, SB21, was drafted by scholars and attorneys, including some who had represented Meta and Musk.
Featured image credits: Pexels
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