Elon Musk announces moving SpaceX incorporation to Texas following Delaware ruling on pay package

TEXAS: Tesla CEO Elon Musk announced on Wednesday (local time) that SpaceX has moved its state of incorporation from Delaware to Texas.

"SpaceX has moved its state of incorporation from Delaware to Texas! If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible," Elon Musk posted on X.

Meanwhile, a Wednesday filing to the Texas Secretary of State showed that SpaceX wants to move its business incorporation location from Delaware to Texas.

According to CNN, the move by the Elon Musk-owned company comes after a Delaware state judge struck down Musk's 2018 Tesla pay package, siding with a shareholder who had challenged it as excessive.

Notably, Delaware is traditionally where many of the United States' biggest businesses are incorporated for legal and tax purposes. It is seen as a desirable place to seek approval for mergers and litigate disputes, and doesn't levy sales tax or tax on profits from intellectual property.

The Delaware court's ruling could potentially wipe out more than USD 51 billion of Musk's assets, barring any outcomes from an appeal. In the aftermath, Musk said he would move his business incorporations out of the state.

Prior to this, Musk's brain implant company, Neuralink, also moved out of Delaware and changed its incorporation to Nevada.

"Never incorporate your company in the state of Delaware," Musk posted on X in January. "I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters."

After the pay package ruling, Musk said he is seeking shareholder approval to incorporate Tesla, another company that he leads, in Texas, CNN reported.

Musk had previously put up a poll on X asking if Tesla (TSLA) should move its registration from Delaware to Texas, where it is already headquartered. Hours later, the Tesla CEO wrote that the "public vote is unequivocally in favor of Texas."

The poll results showed Texas had won the backing of more than 87 per cent of about 1.1 million votes.