Elon Musk's rocket company, SpaceX, has changed the location of its business incorporation from Delaware to Texas, the tech billionaire said Wednesday in a post on X.
After SpaceX, Will Elon Musk's Tesla Also Move its State of Incorporation?
In his post on his social media platform X, Elon Musk urged other companies still incorporated in Delaware to relocate to a different state.
"SpaceX has moved its state of incorporation from Delaware to Texas! If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible," Musk said.
The change in the location of the business incorporation of SpaceX was completed on Wednesday. This development comes a week after a Delaware judge voided Musk's $55 billion Tesla pay package.
Musk then announced that Tesla, which is headquartered in Austin, would hold a shareholder vote to transfer its state of incorporation to Texas from Delaware.
"The public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas," the Tesla CEO said on X after holding a poll where 87% of respondents voted "yes" for the electric carmaker's change of incorporation, Reuters reported.
However, legal experts told Reuters that changing Tesla's state of incorporation could come with challenges, such as investor lawsuits, particularly if it was seen as a maneuver to secure his pay package. Tesla was incorporated in Delaware in 2003.
Elon Musk's Neuralink Changes Location of Incorporation From Delaware to Nevada
Last week, Elon Musk's brain implant company, Neuralink, also changed the location of its business incorporation from Delaware to Nevada.
Musk also previously switched the incorporation of X from Delaware to Nevada when he changed the name of the social media company from Twitter. According to Reuters, the location of incorporation refers to the jurisdiction where a company is legally registered and recognized as a corporate entity.
It determines the laws and regulations under which the company operates, including taxation, corporate governance, and legal liabilities. Bloomberg reported that Nevada's corporate laws provide more protection for executives against investor lawsuits.
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