Corporate law structure plays vital role in Delaware

For decades, Delaware has been the gold standard for corporate law in the United States, and the reasons behind this distinction are no accident. With its robust legal framework, specialized Court of Chancery and unparalleled flexibility in corporate governance, Delaware is not just a hub for businesses; it’s also a global leader.  

As public servants representing the interests of our communities, we recognize that our corporate law structure plays a vital role in supporting our state’s economy while fostering innovation and growth. 

The benefits of this system to Delawareans are undeniable. Corporate license fees and associated tax revenues accounted for roughly 33% of Delaware’s general revenue in recent years, funding critical programs and services that benefit everyone. This revenue allows us to make meaningful investments in our communities without overly burdening our residents with higher taxes. In this way, our corporate law structure doesn’t just serve businesses; it also serves our state. 

But this system is under attack. Recent high-profile court decisions have placed us in the crosshairs of national actors, and other states are looking to capitalize on any business that looks to move away from Delaware. It cannot be overstated how significant the tax revenue and businesses brought by the corporate franchise are to our state. 

We have bragged to our friends in neighboring states about Delaware’s 0% sales tax, and millions travel from across the region each year to save on their expensive purchases. Tens of thousands can enjoy retirement from the comfort of their home because of our low property taxes. Delaware had the lowest sales and property taxes per the Tax Foundations’ 2025 report. This is a result of the revenue generated from our corporate franchise industry. 

We have big goals for the next General Assembly, like adequately funding our education system so every Delaware child can receive a world-class education; expanding affordable housing so that working Delawareans can have a safe place to raise their families and earn an honest living; and improving access to quality and affordable healthcare so we can live healthier lives and make the healthcare system work better for everyone.

None of this will be possible if outside actors are successful in dismantling Delaware’s position as a leader in corporate governance. Discussions of increasing teacher pay, providing tax breaks for hardworking Delawareans and enacting large-scale infrastructure projects could be forced to the back burner as we attempt to navigate budgetary uncertainties. 

We hear daily from residents up and down the state about the cost of living. Inflation has taken a bite out of everyone’s paychecks and made it harder to make ends meet. A loss of revenue in Delaware would make the difficult kitchen table conversations even harder for every family. Whether a cut in Medicaid, decreases in law enforcement recruitment or deferred maintenance on roads and bridges, every single Delawarean would be affected by decreased revenue, as we would be forced to make cuts or raise taxes to keep pace with the cost of services our constituents desperately need. 

While calls to reduce corporate reliance and encourage economic diversification into other industries are not without merit, such an expedited transition would be offset by broader economic harm. Accelerated movement beyond our current structure would likely require the state to raise other taxes (e.g., property or income taxes) or cut services to offset the loss of corporate-related revenue, which could take years or decades to recover from. 

While Delaware's Court of Chancery has remained widely respected for its expertise and fairness, we acknowledge that it’s important to address its lack of diversity and ensure the judiciary reflects the broader perspectives of the communities it serves, thereby enhancing its credibility and fairness, and Delaware’s leadership in corporate governance and justice. 

Rod Ward, CEO of CSC, a global leader in corporate governance headquartered in Delaware, recently addressed attendees at the Delaware State Chamber dinner. He emphasized the importance of partnership in maintaining Delaware’s corporate governance legacy.

“The path forward requires collaboration and consensus. Delaware’s strength has always been its ability to grow without losing sight of its core principles: predictability, fairness and adaptability. Protecting this legacy is not just a business priority; it is a responsibility that touches every citizen of the First State.” 

The next few months will be critical for the future of our state as the future of the corporate franchise could be decided not in Dover, but in D.C. Decisions made in the next few months could derail the path we’ve paved together. 

Let us all remain vigilant and work together to protect this critical funding source for our state and continue our progress toward a better Delaware for all.