2026 Choice, Governance, and Acquisition of Entities

“DEXIT,” in the context of entities formed under Delaware law redomiciling to another state, typically refers to a transaction in which a company exits Delaware as its state of formation by redomiciling in another state. The redomiciling is typically accomplished by either (i) a statutory “conversion” from an entity formed and governed under the laws of Delaware to one formed and governed by the laws of another state by filing articles of conversion with applicable secretaries of state or (ii) a statutory “merger” of the entity into a newly formed entity in the destination state. In either case the result is that the company’s internal affairs are no longer governed by Delaware entity law and the entity has become governed by the laws of the destination state without any transfer of assets having occurred. Texas is often selected as the new domicile for the entity, particularly where the entity has significant operations in Texas. The underlying DEXIT transaction is commonly described in filings with the Securities and Exchange Commission (“SEC”) as a “reincorporation” or “redomiciling” from Delaware to Texas or another destination state. Companies typically will implement the move by filing articles of conversion or merger after the requisite governing jurisdiction law approvals by the entity’s directors and owners and filings with the secretaries of state of Texas and Delaware or by merging a Delaware corporation with or into a wholly-owned subsidiary formed under the Texas Business Organizations Code (the “TBOC”), with the surviving entity governed by the TBOC, often with a one-for- one share conversion and continuity of the business and its governing persons and employees. Texas is a frequently considered DEXIT destination because it is considered to be a business-friendly state because of its new Business Court, recently amended TBOC and favorable state taxes. Recent amendments to the TBOC that are viewed as making Texas a desirable home were worked on by the Codification Committee of the Business Law Section of the State Bar of Texas and the Texas Business Law Foundation, a Texas nonprofit corporation (the “TBLF”) whose members are largely Texas entities. The TBOC amendments are often cited favorably in corporate DEXIT announcements. Amendments to the TBOC in 2025 make it more difficult to sue directors of companies incorporated in Texas and make it more challenging for shareholders to file stockholder proposals against Texas companies. Redomiciling a company to Texas is critical to entity governance and owner rights, but may not be as significant to others as moving its headquarters or operations to Texas. While it brings prestige to the state, redomiciling a corporation does by itself not always bring significant economic benefits. Texas is seeking to attract public company stock listings on the new Texas Stock Exchange in Dallas. Both Nasdaq and the New York Stock Exchange have recently launched Texas listing venues in Dallas.

y contract. This paper aims to equip practitioners with the tools to keep their clients out of avoidable or protracted litigation. For the transactional lawyer, that means drafting provisions that work as intended without creating unintended exposure. For the litigator, it means spotting indemnity issues early—whether asserting a claim or defense. This paper examines the components of an indemnity clause, how courts construe such provisions, and recurring drafting pitfalls.

Every M&A transaction involves a fundamental tension: the seller believes the business is worth more than the buyer is willing to pay. This valuation gap is not simply the product of greed or bad faith; it reflects genuine differences in how each party assesses the future. Sellers are intimately familiar with their business, believe in its trajectory, and have often devoted years—or decades—to building it. Buyers, dealing with insufficient or unreliable information and bearing the financial risk of the acquisition, discount uncertain future earnings and apply conservative multiples. Where the gap is wide, transactions fail. Potential deals that might otherwise create value for both parties collapse because the parties cannot agree on price. The earn-out provision exists, in large part, to bridge this divide. By linking a portion of the purchase price to the post-closing performance of the acquired business, an earn-out allows the parties to share risk, defer the resolution of valuation disputes into the future, and— when structured properly—align the incentives of seller and buyer during the critical post-closing integration period.

Under the Texas Rules of Professional Conduct (TRPC), attorneys “should” stay “abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology[.]”

This is a form for a LLM Membership Purchase Agreement.

Many lawyers approach intellectual property (IP) due diligence the way they approach a routine inspection: necessary, box-checking, unlikely to produce anything truly surprising. That assumption is wrong, and it is expensive. IP issues are among the most common causes of post-closing disputes, purchase price adjustments, and, in the cases that do not make it to closing, deal collapses. The issues that cause the most damage are rarely exotic. They do not require a deep understanding of patent or trademark law. They are, more often than not, simple problems that nobody thought to look for: a software developer who was never asked to sign an assignment agreement, a founder whose code predates the company’s formation, a license that quietly dies the moment the acquisition closes, a trademark that lapsed because nobody was watching. Each of these problems is avoidable. Each of them surfaces, regularly, in due diligence, or worse, after closing. Each of these problems should be identified during the due diligence phase; however, this would require more than a “routine inspection.” This paper, written for deal lawyers who are increasingly expected to understand the IP of a transaction without necessarily being IP specialists themselves, discusses why IP due diligence should be more than a “routine inspection.” Due diligence in IP primarily focuses on four main areas: (1) the target company’s ownership in IP it has developed or acquired, (2) the target company’s rights to use IP owned by third parties, (3) the transferability of the licensed rights, and (4) the IP rights that the target company has granted to third parties. Such due diligence seems simple enough that some lawyers put little thought into it; however, this is a mistake and costly issues can be avoided if IP due diligence is given proper respect.

Amendments to the Texas Business Organizations Code in the 2025 Legislative session codified standards with respect to fiduciary duties and liabilities applicable to publicly held Texas for-profit corporations, limited liability companies, and limited partnerships, and present new opportunities (and, in some instances, challenges) in drafting the governing documents of privately held Texas for-profit corporations, limited liability companies, and general and limited partnerships with respect to fiduciary duties and liabilities. Understanding the differences in, and ramifications of, the statutory provisions addressing the duties and liabilities of governing persons and other managerial officials in the various forms of business entities, as well as the manner and extent to which the governing documents may impact those duties and liabilities, is critical when drafting or reviewing governing documents.

Prior law provided for the partial exclusion of gain on the sale of qualified small business stock (QSBS) held for more than five years. For stock acquired after September 27, 2010, the exclusion was 100 %; for stock acquired in earlier periods, the exclusion is 50% or 75%, depending on the acquisition date. Gain excluded under Section 1202 is not treated as a preference item for alternative minimum tax (AMT) purposes for post-2010 acquisitions

As businesses and workers are increasingly moving toward digital goods and services, the state and local tax (SALT) landscape has been changing, including several states imposing sales tax on the sale of digital goods and services. Digital goods and services require significant amounts of data storage and processing power, which have continued to create issues regarding state and local taxation and related exemptions. The Texas Legislature has decided to reevaluate existing SALT exemptions and strategies for managing data center growth. Citizens in Texas have voiced concerns about the significant resources required to generate sufficient electricity and water to sustain increasingly massive data centers in an already drought-ridden and grid- strained state. Other states have been expanding their taxation regimes to identify new ways to tax these emerging markets and/or proposed decreasing the tax incentives associated with data centers.