Significant changes to the Delaware General Corporate Law, which became effective on Aug. 1, will not only impact Canadian companies dealing with or targeting Delaware corporations, but could – if history is any indication – ultimately make their way into Canada.
"Delaware is a leading corporate jurisdiction, and what they do there could be instructive about the way we end up doing things here," says Jeremy Fraiberg of Osler Hoskin & Harcourt LLP in Toronto.
The changes relate to exclusive forum provisions and to fee shifting. They authorize the inclusion of a forum selection clause in the certificate of incorporate or bylaws. That clause may designate the Delaware courts as the exclusive forum in which to bring "internal" corporate claims. Although companies may not exclude the jurisdiction of the Delaware courts, it's not clear whether they can stipulate an additional forum.
Lexpert contributor Julius Melnitzer reports on Delaware corporate reform at www.lexpert.ca/globe.
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