Neuralink Corp., the brain implant company founded by Elon Musk, has made a significant move by changing its business incorporation location from Delaware to Nevada. This decision comes as Musk aims to sever ties with Delaware, a state where he has faced legal challenges in the past. The relocation was finalized on Thursday, as confirmed by the office of the Nevada secretary of state and a notice sent to Neuralink shareholders.
One of the recent setbacks Musk faced in Delaware was the rejection of his $55 billion pay package for Tesla Inc., which occurred just last week. In response to this ruling, Musk took to X, the social network he owns, to advise other founders against incorporating their businesses in Delaware. This move by Neuralink to shift its incorporation to Nevada is seen as a strategic step to distance itself from a state that has proven to be unfavorable to Musk.
The notice sent to shareholders outlined that their outstanding shares in the Delaware corporation would now be incorporated into the outstanding shares of the Nevada corporation. However, Neuralink lawyer Philip Mao declined to comment on the matter, leaving further details undisclosed.
Neuralink has been making headlines recently for its groundbreaking technology. Musk announced on Twitter that the company had successfully implanted a device in a human patient for the first time. The aim of Neuralink’s technology is to assist individuals with traumatic injuries in operating computers using only their thoughts. Musk envisions that the device will eventually grant people “control of your phone or computer, and through them almost any device, just by thinking.”
This is not the first time Musk has chosen to reincorporate one of his businesses outside of Delaware. He previously moved the incorporation of X, formerly known as Twitter, from Delaware to Nevada. The corporate laws in Nevada provide executives with greater protection against investor lawsuits, making it an attractive choice for Musk.
While Tesla, which is headquartered in Austin, Texas, was incorporated in Delaware back in 2003, Musk has expressed his intention to shift its incorporation to Texas. However, such a move would require a shareholder vote. It seems that Musk is determined to distance himself from Delaware due to his history of legal disputes in the state.
Delaware is renowned as the incorporation capital of the United States, hosting over 70% of Fortune 500 companies. Its chancery court judges are recognized as experts in business law and are known for handling high-profile merger-and-acquisition disputes efficiently. Even foreign companies often choose Delaware as the jurisdiction for resolving corporate disputes.
One notable legal battle Musk faced in Delaware was a lawsuit challenging his $2.6 billion acquisition of SolarCity, a renewable-power provider. The judge ruled in Musk’s favor, stating that he did not improperly force fellow directors to accept an overpriced buyout of SolarCity. However, in a subsequent attempt to back out of his bid to purchase Twitter, Musk faced repeated setbacks in pretrial rulings by Judge Kathaleen St. Jude McCormick, who would later rule against his 2018 pay plan.
As Neuralink moves its business incorporation to Nevada, it remains to be seen whether this will be Musk’s final relocation from Delaware. Nevertheless, this decision reflects his determination to navigate legal challenges more favorably and protect his ventures from potential lawsuits. With Neuralink’s groundbreaking technology and Musk’s visionary goals, the company’s move to Nevada marks another chapter in the ongoing saga of Elon Musk’s ventures.