Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, is exploring options to change its state of incorporation from Delaware to Texas or other states, according to people familiar with the matter.
The technology giant has engaged in preliminary discussions with Texas officials about potential reincorporation, though the talks are still in early stages and no final decision has been made. The company's corporate headquarters would remain in Menlo Park, California.
The potential move follows similar actions by Elon Musk, who recently moved Tesla and SpaceX's incorporation to Texas. Musk's decision came after a Delaware court voided his $56 billion Tesla compensation package.
Delaware has traditionally been the preferred state for corporate incorporation due to its established business laws. However, recent Delaware Chancery Court rulings have favored shareholders and placed additional restrictions on corporate boards, prompting some companies to consider alternatives.
Meta's dual-class stock structure, which gives CEO Mark Zuckerberg substantial control over the company, could face challenges under Delaware's legal framework. Texas is viewed as having a more business-friendly regulatory environment, particularly regarding corporate governance and shareholder litigation.
The company currently faces multiple lawsuits in Delaware courts, including one related to the Cambridge Analytica privacy scandal from 2018. A move to Texas could potentially provide Meta with advantages in future shareholder litigation.
Legal experts suggest that established companies like Meta can more easily transition to Texas incorporation compared to younger firms, which often prefer Delaware's stricter requirements to build trust with shareholders.
A Meta spokesperson declined to comment on the reincorporation discussions while confirming that the company's headquarters would stay in California.