While 2024 and early 2025 saw heightened commentary suggesting a potential "DExit" of corporate entities from Delaware driven by certain judicial decisions and related corporate governance uncertainty, newly released incorporation data and recent entity conversion activity indicate that such concerns appear overstated, and that Delaware’s practical appeal as the leading home for corporate entities remains strong.
As reported in our March 2025 alert regarding amendments to the General Corporation Law of the State of Delaware ("DGCL") (available here), those amendments represented a first step in reinforcing Delaware’s preeminence as a home for business entities in the United States, with a goal of providing certainty and deference to the treatment of decisions made by independent directors and disinterested stockholders of Delaware corporations. Recent empirical data and high-profile corporate restructuring activity provide important additional context for boards, founders and advisors evaluating jurisdictional strategy when incorporating or forming corporate entities in the United States.
What You Need to Know:
Recent developments highlight that:
- Delaware experienced significant growth in new corporate formations in 2025, outpacing other U.S. jurisdictions and exceeding its own 2024 formation levels;
- Incorporation trends suggest no meaningful migration away from Delaware, notwithstanding recent litigation and public debate; and
- Sophisticated founders and asset holders (including, just recently, Larry Page, one of the co-founders of Google) continue to affirmatively select Delaware as a jurisdiction of choice when restructuring entities in response to tax, regulatory and planning considerations.
Analysis of the "DExit" Narrative
An analysis published in January 2026 by the Harvard Law School Forum on Corporate Governance[1] examined nationwide corporate formation data to provide important empirical context to the public debate surrounding a potential "DExit" from Delaware. The term gained traction in 2024 following a series of Delaware judicial decisions that prompted concern among practitioners, commentators and market participants regarding perceived shifts in fiduciary doctrine, transaction review standards and litigation risk. The newly released data, however, suggests that these concerns have not translated into observable changes in incorporation behavior. According to the analysis:
- New Delaware corporate formations increased materially in 2025, representing approximately a 30 percent year-over-year increase compared to 2024;
- Overall corporate formation levels nationwide remained relatively flat, indicating that Delaware’s gains were not merely the result of a broader market expansion; and
- No competing jurisdiction experienced comparable growth, undermining the notion that incorporators are meaningfully reallocating to alternative states in response to Delaware developments.
Notably, this increase in the number of Delaware incorporations occurred during a period of sustained public scrutiny of Delaware corporate law and prior to the full market absorption of the 2025 DGCL amendments. As a result, the data suggests that incorporation decisions, particularly for newly formed entities, continue to prioritize Delaware’s institutional advantages, including its specialized judiciary, extensive body of precedent and predictable application of corporate law.
While the "DExit" narrative reflected genuine uncertainty among boards and advisors, the available data indicates that such uncertainty has not translated into observable changes in incorporation behavior. Instead, incorporation behavior appears to reflect a distinction between theoretical legal risk debated in public forums and practical jurisdictional decision-making by market participants.
Additionally, recent reporting illustrates how Delaware continues to play a central role in entity structuring decisions by high-net-worth founders and closely held enterprises. As one example that has been widely reported, in late 2025, Google cofounder Larry Page converted multiple business entities from California to Delaware as part of a broader restructuring effort undertaken in advance of a proposed California wealth tax. The converted entities reportedly include investment vehicles, family-office structures and operating companies spanning technology, aviation and scientific research initiatives. When considering a corporate home, rather than subscribing to "DExit" and choosing any of the other many options for an entity home, Mr. Page chose Delaware.
Such decision-making underscores several recurring themes:
- For many, Delaware remains a default jurisdiction for new entity formation and conversions, even where the principal place of business or management may be located elsewhere;
- Broader state policy and the long-established body of judicial case law, rather than a few limited corporate governance decisions, can be a primary driver of corporate entity activity; and
- Delaware’s combination of legal certainty, administrative efficiency and entity law flexibility continues to attract complex, multi-entity structures.
Implications for Boards, Founders and Advisors
Taken together, the developments reported above suggest that Delaware’s statutory response in 2025, coupled with its established judicial and legislative framework, has helped stabilize confidence among incorporators. To date, predictions of widespread departures from Delaware have not materialized and are not shown by the available data. At the same time, incorporation and restructuring decisions are increasingly driven by holistic planning considerations, including tax exposure, governance predictability, litigation risk, and administrative efficiency, rather than by headline risk alone. Accordingly, while decisions made by boards, founders and advisors evaluating new entity formation, conversion or reincorporation strategies are necessarily fact-specific, recent data and market behavior demonstrate that Delaware’s advantages remain durable in practice.
[1]See https://corpgov.law.harvard.edu/2026/01/15/an-update-on-dexit-from-the-corporate-census/.
