A Shareholder’s Guide to Blowing up 100 Years of Delaware Corporate Law: Intellectual Property and Corporate Governance After Delaware Senate Bill No. 313

Authors

Avery C. Hill, University of Georgia School of Law

Abstract

This note examines the intersection between shareholders agreements and intellectual property ownership in Delaware corporations after Delaware Senate Bill No. 313. Delaware corporate governance law has created extensive statutory and case law balancing the competing interests of corporate actors. The board of directors maintains an exclusive right to manage the affairs of a corporation, unless otherwise provided in the certificate of incorporation. Delaware law defers to director’s management authority through the business judgement rule, but fiduciary duties govern a director’s responsibly to shareholders. Shareholders maintain rights such as voting for the board of directors, receiving distributions, and selling shares, but shareholders are unable to manage the internal affairs of the corporation.

Despite this widespread corporate framework, the Delaware Legislature passed Delaware Senate Bill No. 313 in the wake of W. Palm Beach Firefighters' Pension Fund v. Moelis & Co.. The bill allows a board to severally limit their management authority through shareholders agreements – private contractual agreements between a shareholder and the board. This change is not limited to changes in the corporate approval process, but alters the fundamental contractual, property, and statutory rights of parties within a corporation.

This note uses intellectual property to examine this shift because intangible assets are now the most significant asset of both startups and large, publicly traded companies. Previously, shareholder control over corporate intellectual property assets was limited to voting for members of the board of directors. Now, shareholders can obtain direct control over a company’s intellectual property through private contractual agreements.

Recommended Citation

Avery C. Hill, A Shareholder’s Guide to Blowing up 100 Years of Delaware Corporate Law: Intellectual Property and Corporate Governance After Delaware Senate Bill No. 313, 33 J. Intell. Prop. L. 263 (2026).
Available at: https://digitalcommons.law.uga.edu/jipl/vol33/iss1/9