For many years, the State of Delaware has dominated new business filings. Although Delaware may make the most sense for many businesses, some new business owners choose to incorporate under Delaware law simply because “everyone else is doing it.” Delaware offers several key advantages for new business filings, including highly developed corporate jurisprudence, an exclusive specialty Court of Chancery for corporate cases, strong privacy protections, and an overall “business-friendly” legal environment. However, like every business, each state has its own unique body of business-enterprise law and regulatory framework. In recent years, several states have undertaken substantial efforts to attract new businesses to incorporate or organize under their laws. As a result, business owners should carefully evaluate what laws may be best for their specific goals and circumstances. Below, we examine several states that have positioned themselves as viable alternatives and explore the legal (and business) advantages they may offer.
Texas
In recent years, Texas has made the most substantial changes to their business law environment to directly compete with Delaware, including formation of its own business courts and comprehensive corporate law reforms. These changes made major headlines when Elon Musk reincorporated Tesla, Inc., the S&P 500’s 9th largest company by weight, in Texas. Other major corporations moving their incorporation out of Delaware and into Texas in 2025 included Dillard’s and Coinbase.
One major change to Texas’ corporate law environment was the implementation of the Texas Business Court, which opened on September 1, 2024, as a “statewide, specialized trial court created to resolve certain complex business disputes.” While trial courts of general jurisdiction require judges to know countless areas of law, the Business Court allows complex cases to be heard by a judge who specializes in that area. This change to the Texas court system is designed to directly compete with Delaware by offering a specialized court system, much like the Delaware Court of Chancery.
Texas has also made significant changes to the Texas Business Organizations Code with Senate Bill 29 signed by Governor Greg Abbott on May 14, 2025. SB 29 codified some jurisprudential law and added others, including codifying the Business Judgment Rule, adding hurdles for shareholders to bring derivative actions, allowing forum selection and jury waivers, allowing class-by-class voting waivers, and limiting books-and-records demands. The changes and additions to the TBOC, along with the creation of the Texas Business Couts, reflect and reiterate a strong push by Texas to harbor a business-friendly environment on-par with Delaware.
Nevada
While Texas has zigged in an effort to (mostly) mirror the business law environment of Delaware, Nevada has zagged by carving its own niche. Specifically, Nevada offers privacy for shareholders by not requiring a listing of all shareholders in public documents and not sharing information with the IRS, codified protection against veil piercing for directors and officers, and no state corporate income tax or franchise tax. Nevada also offers fewer reporting and reporting requirements for businesses.
Wyoming
In recent times, Wyoming has increasingly become a state of choice for new businesses. Particularly, Wyoming has become popular for the formation of limited liability companies. Wyoming began this push with the Wyoming LLC Act of 2010 and subsequent updates to its LLC law. As a result of these changes, Wyoming tripled its business filings between 2020 and 2025 and saw a 42% increase in 2023 alone. Wyoming offers many of the same benefits as Nevada: strong asset and privacy protections and low taxes. In fact, The Tax Foundation lists Wyoming as the best tax environment for businesses in the U.S.
Wyoming, the first state to allow businesses to form as an LLC in the United States in 1977, saw its original LLC Act become outdated by the 21st century. In 2010, Wyoming passed the Wyoming LLC Act of 2010, which mostly adopted the Revised Uniform Limited Liability Company Act with key competitive changes, including increased privacy regarding the names of members and managers and the amount and nature of capital contributions, greater flexibility regarding operating agreements, including the ability to waive certain fiduciary duties of members and managers, and the ability to file with the Secretary of State’s office a “statement of authority” identifying who may act on behalf of the LLC and in what capacity.
Wyoming has become known for its low fees, low taxes, and minimal bureaucracy. Overall, Wyoming has strategically modernized its business laws to create a competitive, business-friendly environment with strong privacy protections, flexible governance options, and a low-tax, low-fee, low-maintenance structure.
Conclusion
When starting your business, you should make a strategic decision in select your entity-type and state of incorporation or formation, much like deciding “what should we charge?” or “who is our target market?” Each state offers unique advantages and disadvantages. The business formation market has not been this competitive in over a century.