The Delaware General Corporation Law (DGCL) has been amended in relatively minimal ways, effective August 1, 2026. Changes relevant to drafting of corporate and M&A documents include:
- An important clarification regarding the voting standard for class votes required to change the amount of authorized stock of that class.
- A required agreement by a dissolving corporation for service of process after dissolution.
This GT Update discusses the legislation’s impact on certificates of incorporation and dissolution and certain related drafting considerations.
Certificate of Incorporation
Section 242(b)(2) provides that a class vote is required to increase or decrease the authorized number of shares of that class, unless the certificate of incorporation includes a provision that such change in authorized shares may be approved by holders of a majority of the total outstanding shares irrespective of Section 242(b)(2). For decades, such “opt-out” provisions were relatively common in certificates of incorporation. In 2023, however, subsection (d) was added to Section 242, and subsection (d)(2) provides that, under certain circumstances for corporations with publicly listed stock and unless otherwise expressly provided in the certificate of incorporation, approval by only a majority of votes cast is required for those votes on changes to authorized shares of a class. Some uncertainty arose in practice and case law over whether provisions in certificates of incorporation opting out of the class vote requirement under subsection (b)(2) would also operate to opt out of the votes cast standard under subsection (d)(2). As a result, Section 242(d)(2) has been amended to clarify that only a provision that expressly states that the corporation is not to be governed by Section 242(d)(1) or (2) (or both) or requires a greater or additional vote than the majority of total outstanding voting standard contemplated by subsection (b)(2) will effectively opt out of the subsection (d)(2) votes cast standard. This amendment should provide greater clarity and comfort for corporations with certificates of incorporation that include traditional Section 242(b)(2) opt-out provisions, while providing a roadmap for language to include in newly adopted and amended certificates of incorporation.
Certificate of Dissolution
Section 275 provides the requirements for dissolution of a corporation, including the contents of a certificate of dissolution that must be filed with the Delaware Secretary of State’s office. Section 275(d) now requires that a dissolving corporation include in its certificate of dissolution an agreement to appoint the Delaware Secretary of State for service of process and a forwarding address. Although this amendment does not require substantive consideration by dissolving corporations, it is a mandatory term to be included in certificates of dissolution.