Texas Forum Bylaw Clauses—Delaware Chancery Court Provides Practical Takeaways for Corporations Moving to Texas

Corporations reincorporating in Texas to take advantage of the Texas Business Court now have new case law support. The Delaware Court of Chancery recently held that a Texas forum bylaw adopted by a company moving to Texas required litigation of certain internal matters arising prior to reincorporation. No. 2024-0631-BWD (Del. Ch. April 13, 2026). 

The decision provides practical takeaways for migrating companies in similar situations. Such companies should promptly amend forum selection clauses in their bylaws upon reincorporation, follow corporate approval formalities carefully, and provide immediate notice to shareholders of the changes. 

Case background

The case in question arose after a corporation changed its state of incorporation from Delaware to Texas and then adopted bylaws selecting Texas as the exclusive forum for specified internal corporate claims. 

In a derivative litigation filed in Delaware, stockholder plaintiffs challenged enforcement of that bylaw, arguing in substance that they had already filed suit and should be able to continue pursuing fiduciary duty claims in the previously-available Delaware forum. The Court of Chancery rejected that challenge and enforced the Texas forum provision. In doing so, the court treated the bylaw as a presumptively valid forum-selection clause and applied the familiar rule that such clauses ordinarily should be enforced unless the challenger shows enforcement would be unreasonable, unjust, or the product of fraud or overreaching.

Enforcement of the amended bylaw's forum clause

The opinion is useful because it did not treat the filing of suit as creating a vested right to litigate internal claims in a particular forum. Instead, the court relied on the settled principle that stockholders are bound by valid bylaw amendments adopted under the corporation’s governing framework, including later-adopted forum provisions.

Several facts were helpful to the corporation in invoking the new bylaw. Among others, the Texas forum change had been publicly disclosed before the shareholder lawsuits were filed, reducing any claim of unfair surprise, and the litigation had not yet materially progressed on the merits when the bylaw became operative. The court also drew support from the long-recognized view that bylaws function as part of the contractual arrangement among the corporation and its stockholders, which strengthens the case for enforcing procedural provisions such as forum-selection clauses.

Companies seeking to reincorporate in Texas should review the blueprint from this case when considering amendments to their own bylaws, and consider taking the following actions:

• Amend now rather than after any pending cases have substantially developed; timing was important in the recent decision.
• Draft forum clauses broadly but precisely, covering internal entity claims, derivative actions, fiduciary-duty claims, and related internal-affairs disputes.
• Follow adoption mechanics exactly under the charter, bylaws, and applicable corporate law, because enforceability starts with valid adoption.
• Disclose the amendment promptly to blunt later arguments in derivative litigation about surprise, gamesmanship, or inequity.
• Decide whether to select Texas venues generally or one or more specific Texas courts with jurisdiction, which new Section 2.115(b) of the Texas Business Organizations Code, discussed below, now expressly allows.[1]

Recent revision to Texas forum statute supporting exclusive forum clause amendments

Texas has notably made the process of mandating exclusive forum for internal affairs more straightforward. As amended by Senate Bill 29 in 2025, Section 2.115(b) of the Texas Business Organizations Code provides that a domestic entity’s governing documents may require that internal entity claims be brought only in a court in Texas and may specify one or more courts in Texas with jurisdiction as the exclusive forum and venue for those claims. That statutory text gives Texas corporations an express basis to channel derivative and other internal-governance disputes into Texas courts, including the Texas Business Court where jurisdiction exists. For many companies, that reduces uncertainty over whether a Texas-exclusive forum clause is merely impliedly valid or affirmatively authorized by statute.