I recently came across another publicly traded Delaware corporation with plans to reincorporate in Nevada. Interestingly, this corporation, Sonoma Pharmaceuticals, Inc., originally began as a California corporation and then reincorporated in Delaware. According to the company's proxy statement filed with the Securities and Exchange Commission on July 1, the company has several reasons for the move:

• Cost. The company states that it paid $200,000 in Delaware franchise taxes in the last year and expects that it would be obligated to pay the same amount this year. It expects to pay less than $1,000 in annual fees as a Nevada corporation.
   
• Stability and Predictability. According to the company:

"Though Delaware corporate law has recently been amended to, among other things, increase protections for officers of a corporation, we believe Nevada is more advantageous than Delaware because Nevada has pursued a statute-focused approach that does not depend upon judicial supplementation and revision, and is intended to be stable, predictable and more efficient, whereas much of Delaware corporate law still consists of judicial decisions that migrate and develop over time."

• Management Liability. According to the company:

"Delaware law permits a corporation to adopt provisions limiting or eliminating the liability of a director or an officer to a company and its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the liability does not arise from certain proscribed conduct, including breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law. By contrast, Nevada law permits a broader exclusion of liability of both officers and directors to the Company and its stockholders, providing for an exclusion of all monetary damages for breach of fiduciary duty unless they arise from acts or omissions which involve intentional misconduct, fraud or a knowing violation of law. The reincorporation will result in the elimination of any liability of an officer or director for a breach of the duty of loyalty unless arising from intentional misconduct, fraud or a knowing violation of law."

Once, The World Rushed In, Now It Seems To Be Rushing Out

Delaware is not the only state to witness departures. A few days ago, Elon Musk announced that he would be relocating the headquarters of X Corp. and Space X from California to Texas. Unlike the reincorporations that Delaware is experiences, Musk's moves involve changes in physical location. Potentially, these moves would affect not only the companies' employees, but also landlords, suppliers and professionals providing services to those companies.