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Delaware may still be the gold standard for corporate law, but the Lone Star State is stepping up. In this episode of Bite-Sized Business Law from Fordham Law Corporate Law Center, Michael Holmes explores how Texas is positioning itself as a serious alternative for corporate litigation and incorporation, as companies increasingly reconsider Delaware. Michael explains how recent legislative changes like SB21 have opened the door for states like Texas to compete, and how Texas is responding with its own business court system. He outlines key structural differences, including jurisdictional thresholds, term limits for judges, and early-stage rulings on director disinterestedness.

As an update to Vinson & Elkins’ prior coverage  of House Bill 40 (“H.B. 40”)—new legislation that expands the jurisdiction and operations of the recently opened Texas business courts—both houses of the Texas Legislature approved H.B. 40 on June 2, 2025.

On May 13, 2025, the Texas House of Representatives — by a vote of 99–40 — passed House Bill 40 (“H.B. 40”), which would enact significant changes to the recently adopted business court system in Texas. Those changes include a substantial expansion of the types of cases the business courts have jurisdiction over, requiring the Texas Supreme Court to establish rules related to the determination of such jurisdiction, and other administrative amendments.

On March 1, 2025, the Texas Business Court (the “Business Court”) implemented new local rules aimed at enhancing the efficiency and fairness of business dispute resolutions. Key changes include new provisions involving exchanging benches, supplemental jurisdiction waivers, corporate disclosure requirements, streamlined discovery dispute procedures, the concept of a Mediation Wheel, and a new guideline for the use of artificial intelligence. These rules, unanimously approved by all ten judges, mark a significant shift in the Business Court’s operational framework.

The Wall Street Journal reported on January 31, 2025, that Meta Platforms Inc. (formerly Facebook) (NASDAQ: META) was considering a change of its state of incorporation from Delaware to Texas.

On September 1, 2024, a notable change occurred in the Texas legal landscape with the official launch of the new Texas Business Court. Created through House Bill 19, which was signed into law on June 9, 2023, these 11 civil courts aim to provide a specialized venue for trials, specifically those resolving significant, complex commercial disputes. They also seek to streamline cases away from the burdened district courts.

Texas Governor Greg Abbott continues to announce the first wave of judicial appointees to the Texas Business Court and the intermediate court of appeals which will oversee them—all of which are slated to go into effect on September 1, 2024.

Texas’ new business court, which the state hopes will make complex litigation more efficient, opens in less than four months. And while there’s still uncertainty about how the court will operate, its structure and the Texas legislature’s mandate can help answer key questions.