Form it in Texas: the start-up case for a Texas charter in 2026.

In the last piece I argued that capital, resources, and technology are converging in Texas and that the legal industry is not built for it. This one is narrower and more practical. If you are forming a company in 2026 — a software start-up in Austin, a brine developer in Mount Vernon, a roll-up in Fort Worth — where should the charter live? For most of my career the honest answer was Delaware, and the reasons were good ones. As of this fall, for a company that is headquartered in Texas, raising money in Texas, and selling to Texans, my default has flipped. Form it in Texas. Here is why, and here is how to do it without closing any doors.

What happened in October

On October 5 the Texas Stock Exchange opened its listings business with Energy Transfer, Sunoco, SunocoCorp, USA Compression Partners, and Dillard's transferring their primary listings from the NYSE. Texas Capital Bancshares followed on October 8, Origin Bancorp on October 13, and CECO Environmental on October 19 — eight primary-listing transfers in the first month, led by a midstream company worth roughly $73 billion, with Charles Schwab taking a secondary listing on October 1. None of these were initial public offerings. They were existing public companies deciding that the venue for their stock should be the state where their business is.

The quieter number is the one that matters for founders. Since 2024, seventeen public companies have moved their state of incorporation to Texas, including Tesla (May 2025), Coinbase (December 2025), Dell and ExxonMobil (both July 1, 2026), and eleven of them have adopted the governance provisions the Legislature enacted in 2025 under Senate Bill 29. Dillard's reincorporated in Texas in August 2025, a year before it moved its listing. A listing and a charter are separate decisions — Texas Capital's own shareholders approved the listing transfer but did not approve a reincorporation — but the two are plainly beginning to travel together.

What Delaware actually sold, and what Texas now sells

Delaware's product was never the tax rate. It was predictability: a specialized court, a deep body of decisions on the exact charter language venture investors use, and a legislature that revises its corporate statute every year. Any honest case for Texas has to answer that product on its own terms, so let me take the pieces in order.

The court. The Texas Business Court opened in September 2024. In 2025 the Legislature lowered its jurisdictional threshold from $10 million to $5 million for most commercial disputes, added intellectual-property, trade-secret, and arbitration-related claims, and confirmed that a company's governing documents can fix venue in the court for internal disputes. By early October 2026 the court had issued 134 written opinions, and it held its first bench trial last November. On October 2 the court dismissed a derivative suit against Coinbase's directors on Texas standing grounds — the first test of the post-reincorporation framework, decided in a written opinion within ten months of the company's arrival. Appeals go to a single statewide court, the Fifteenth Court of Appeals, so the law develops in one line rather than fourteen. It is not the Court of Chancery and it does not have fifty years of venture-charter precedent; no court but Chancery does. It is a specialist court that writes opinions, and the body of law is compounding quickly.

The statute. Senate Bill 29, effective May 2025, codified the business-judgment rule in Business Organizations Code §21.419: directors and officers are presumed to have acted in good faith, on an informed basis, and in the company's interest, and a plaintiff must plead and prove fraud, intentional misconduct, an ultra vires act, or a knowing violation of law to get past it. The rule applies automatically to listed companies and to any private Texas corporation that opts in through its certificate of formation or bylaws. The same bill let Texas entities adopt an exclusive forum in the Business Court and a jury waiver for internal claims, narrowed books-and-records demands to exclude emails and texts unless they effect corporate action, ended disclosure-only settlements as a basis for plaintiffs' fees, and allowed companies with 500 or more shareholders to require a 3 percent stake before a derivative suit can be filed. A companion bill, Senate Bill 1057, lets a Texas-headquartered or Texas-listed public company set ownership thresholds for shareholder proposals. Delaware answered in March 2025 with its own Senate Bill 21, a safe harbor for controlling-stockholder transactions that the Delaware Supreme Court upheld this February. That is a real improvement for Delaware companies with a controller. It is not an answer to a founder deciding where to start.

The cost. This is the smallest piece and I will keep it short. A Texas-headquartered Delaware start-up pays a Delaware franchise tax and registered agent, registers as a foreign entity in Texas, and files Texas franchise reports anyway. A Texas corporation files one annual report and owes no franchise tax until revenue passes roughly $2.5 million. For a pre-revenue company the difference is a few thousand dollars a year — not a reason to move, but not nothing, and it points the right way.

The investor objection, taken seriously

The strongest argument for Delaware in 2026 is not legal. It is that the venture industry's forms assume it. The NVCA model documents are Delaware documents; a lead investor's term sheet typically recites that the company is or will become a Delaware corporation; counsel on both sides can price a down round or a drag-along because they have seen Chancery decide the same clause. One Delaware practitioner wrote this spring that in thirty years of closings he had never seen a term sheet name Texas, and I believe him. In the 2025 proxy season, by Glass Lewis's count, eighteen companies proposed leaving Delaware; thirteen chose Nevada and two chose Texas. One tally put Delaware's share of 2025 IPOs at 62 percent, down from the 80-to-93 percent it held for a decade, with Nevada at 17 percent and Texas at 4. Texas is winning large operating companies with real Texas footprints. It has not yet won the venture default.

Here is why that does not change my advice for a Texas company. First, the objection is about a future priced round led by an out-of-state fund, and a private company with an aligned cap table can convert from Texas to Delaware — or back — with a board resolution, a shareholder consent, and a short plan of conversion. If a Series A lead in 2028 requires Delaware as a condition of a term sheet you want to sign, you will sign it, and the conversion will cost less than the legal fees on the round. Second, the investors a Texas energy, real-estate, or industrial company actually raises from — family offices, strategics, regional funds, the lenders and counterparties who already do business here — are not the ones insisting on Delaware; their lawyers, their lenders, and their disputes are already here. Third, the venture forms are catching up with the companies. Coinbase and Tesla are governed by Texas bylaws today; the drafting problems have been solved in public filings anyone can read, and the standard financing documents adapt to a Texas corporation without changing a single economic term.

So the honest formulation is this: start in Texas, draft so that a Delaware conversion is a one-week exercise, and make the investor who wants Delaware ask for it and explain why. Most will not.

Which companies this is clearest for

The case is strongest for the companies this firm works with most. An entity that will own Texas minerals, brine leases, or real estate; that will take Texas bank debt; that will contract with Texas operators, utilities, and agencies; and whose disputes will be about Texas property and Texas regulators has no reason to carry a second state's law into every agreement. The same is true for a founder-controlled company that intends to stay founder-controlled: the codified business-judgment rule and the derivative-suit threshold are precisely the protections a controller wants, and they are available by opting in on day one. And it is true for any company that can imagine a listing — on TXSE or anywhere — because the readiness work that an exchange will eventually ask for is the same Texas governance record you would be building anyway.

The case is weakest for a company whose business plan is a Sand Hill Road seed round in six months. Even then, I would form in Texas and let the lead investor decide; the conversion is cheap and the default should not be set by a fund you have not met.

The playbook

If you form a Texas corporation this year, do five things in the formation documents rather than later. Opt in to the §21.419 business-judgment presumption. Fix exclusive venue for internal claims in the Business Court, with a Dallas or Harris County district court as fallback, and include the jury waiver. Reserve the 3 percent derivative threshold so it is in place before you ever have 500 holders. Authorize preferred stock in a form that tracks the standard venture documents, so a future round is a filing rather than a rewrite. And put every one of those choices on a maintained, attorney-certified record — the cap table, the consents, the filings calendar — because the single most expensive thing in a financing or a sale is reconstructing decisions nobody wrote down. If you are a Delaware company headquartered here and weighing a move, the conversion is a few documents; the work, again, is the condition of the record you bring with you.

That record is what Windward Helm was built to keep, and a Texas formation with those provisions is one of our fixed-fee packages. But the point of this article is not the package. It is that the default has changed. Delaware earned a century as the answer to "where do we incorporate," and it may yet earn the next one for companies whose capital lives in California and New York. For a company whose capital, assets, and customers live here, the burden of proof has shifted, and Texas now carries it comfortably.

Scott Beckmen is the Managing Partner of Windward Counsel, PC, a business law firm in Flower Mound, Texas. He has practiced since 2008 and has founded, co-owned, and served as chief legal officer of operating companies. This article is the author's perspective and general information as of its date, not legal advice about any company's choice of domicile; the right answer depends on your investors, assets, and plans. Attorney advertising. Not certified by the Texas Board of Legal Specialization.

This article is general information about developments in Texas and federal law as of its publication date, not legal advice about any specific tract, lease, project, or offering. Laws and rules change; talk to counsel about your situation before acting. Attorney advertising.