United States: Y’all Street to Attract Business With “Pro-growth” Legislation

By: Jessica D. Cohn, Robert H. McCarthy Jr., and Yonathan Y. Tewelde

Growing corporate and financial industry interest in Texas as a viable alternative to Delaware for incorporation is creating a trend, which is being called “Dexit.”

Consistent with Texas’s Dexit goals, on 14 May 2025, Texas Governor Greg Abbott signed a series of bills aimed at enhancing the state’s corporate legal framework and reinforcing its reputation as a “business-friendly” jurisdiction. The newly enacted legislation includes Senate Bill 29, which significantly alters shareholder litigation standards by, among other things:

• Codifying the business judgment rule by offering broader legal protections for corporate directors and officers; and
• Authorizing corporations to establish a minimum ownership threshold for shareholders seeking to initiate derivative lawsuits, which may not exceed 3% of the corporation’s outstanding shares.

Senate Bill 1058 supports the operation of the Texas Stock Exchange, among other exchanges, by excluding from an exchange’s revenue, for tax purposes, rebate payments made to a broker-dealer as part of a securities transaction. Indeed, House Joint Resolution 4 (H.J.R. 4), if approved by voters in November, would establish a constitutional amendment to ban certain taxes on stock exchange transactions.

Texas House Speaker Dustin Burrows stated that these legislative developments “will make Texas the most competitive state for stock exchange[s].” Representatives of each of the Texas Stock Exchange, which is preparing to launch in 2026, the NYSE and Nasdaq were at the bill signing ceremony.