2022 Delaware Corporate Law (DGCL) Amendments
Each year the Delaware legislature passes several amendments to the Delaware General Corporation Law (DGCL) which impact public and private companies incorporated in Delaware, and elsewhere, as many states follow the DGCL. Effective August 1, 2022, the DGCL has been amended to: (i) add certain exculpation provisions in favor of senior officers; (ii) reduce the voting rights necessary to convert a corporation to another type of business entity; (iii) require a dissolution filing upon expiration of a corporate existence; (iv) update signature affirmations; (v) eliminate the requirement to make a stockholder list available during a stockholder meeting; (vi) clarify the method of notice for a stockholder meeting; (vii) increase insurance protections; (viii) update three important provisions related to stockholder appraisal rights; (ix) provide technical updates to the requirements for equity issuances; (x) broaden the ability to complete advance stockholder consents; (xi) improve the method of effectuating a domestication; and (xii) clarify annual franchise tax reports.
Stockholder Appraisal Rights
Appraisal
Recent Notable Changes To Delaware Corporate Law
This summer the Delaware legislature passed several amendments to the Delaware General Corporation Law (DGCL) which impact public and private companies incorporated in Delaware, and elsewhere, as many states follow the DGCL.
Mergers Using DGCL Section 251(h)
Section 251(h) was first enacted in 2013. Section 251(h) eliminates the need for shareholder approval to complete a merger, where such merger is completed following a tender or exchange offer and the acquirer owns at least the percentage amount of the target that is needed to approve the merger. That is, Section 251(h) eliminates unnecessary time and expense related to a vote on a merger when certain preconditions have been satisfied. These preconditions include:
- The merger must be consummated as soon as practicable following the tender offer or exchange offer;
- The underlying tender or exchange offer must be for all of the outstanding stock of the target, except for the stock owned by the acquirer or any person that directly or
