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Meta is in discussions to reincorporate outside of Delaware, becoming the latest tech group to study exiting the state that has long been considered an American corporate haven.
The social media group is weighing moving its legal residence to another state, such as Texas, but has not decided on a destination, said a person familiar with the matter.
The talks come after Meta chief executive Mark Zuckerberg earlier this month announced the company would move its US-based trust and safety staff from California to Texas as part of a broad ‘free speech’ overhaul of its approach to content moderation.
Zuckerberg said at the time the shift would help the company “build trust to do this work in places where there is less concern about the bias of our teams”.
Meta has faced allegations from President Donald Trump and his allies that it censors conservatives and is staffed by liberal-leaning employees, but has recently been attempting to court the new administration.
Meta declined to comment on a possible relocation. However, the group said there was no plan to move its corporate headquarters out of California. The Wall Street Journal first reported on its potential reincorporation.
Last year, Elon Musk won shareholder backing to reincorporate electric-vehicle maker Tesla to Texas, leaving Delaware after a dispute over a lawsuit seeking to block his huge pay package, which has been twice repudiated by the state’s corporate law court.
Musk, the world’s richest man, also reincorporated his social platform X from Delaware to Texas.
Delaware has struggled adjudicating disputes with companies with dominant shareholders or dual-class shares. The state’s corporate law imposes higher legal review standards on these so-called controlled companies.
Meta had faced several fiduciary breach lawsuits in Delaware from minority shareholders including against a share reclassification that would have handed more voting power to Zuckerberg, a move the company abandoned in 2017 prior to a trial.
Roughly two-thirds of the S&P 500 is incorporated in Delaware and many venture capital investors demand start-ups make their legal domicile there.
Corporate law observers believed investor protections in the state would force management teams to remain in Delaware. But a large company such as Meta leaving could become a bellwether for further migration.
Separately on Friday, Dropbox, a cloud storage provider, said its shareholders approved a reincorporation to Nevada from Delaware. The change was made in part because of an “increasingly litigious environment in Delaware”, Dropbox said in a regulatory filing.
In November, The Trade Desk, an online marketing company, said its shareholders approved a reincorporation to Nevada from Delaware.
A landmark investor lawsuit is proceeding through the Delaware court brought by minority shareholders of TripAdvisor, who are seeking damages from what they say are losses resulting from company management getting more power from a recent Nevada reincorporation.
