Each year the Delaware legislature, guided by drafting committees of the Delaware State Bar Association, improves and updates the various entity law codes to ensure that the laws governing Delaware's business organizations remain state of the art and that issues that have arisen during the year are addressed by appropriate legislative action.   The 2023 amendments to the Delaware General Corporation Law (the “DGCL”), Senate Bill 114, as amended by Senate Amendment 1 (as so amended, “SB 114”), provide guidance for Delaware corporations in dealing with treasury stock, the issuance of stock options or other rights, the validation of defective corporate acts, notice of action taken by written consent under Section 228, the availability of appraisal rights for certain transactions, and procedures (including appraisal rights) applicable to certain extraordinary transactions. SB 114 was passed by both houses of the Delaware legislature and was signed into law on July 17, 2023.  An additional piece of legislation, Senate Bill 110, approves an increase of $20 to the courthouse municipality fee collected at the time of every corporate and limited liability company filing, making this fee $40 for each document filed.
 
            A summary of the significant changes to the DGCL follows:

            Treasury Shares.    The 2023 DGCL Amendments add language to Section 153 clarifying that the consideration received by a corporation in a disposition of treasury shares may be less than the aggregate par value of the shares and may consist of the same types of consideration that may be paid on an initial issuance.
 
            Treasury shares are shares of corporate stock that, following their issuance, have been redeemed, repurchased or otherwise reacquired by the corporation, but have not been retired.  Because shares held in a corporation’s treasury are issued but not outstanding, they are not subject to the same consideration requirements that apply to an initial issuance.  Initially, issued stock must be issued for consideration that equals or exceeds the aggregate par value (if the shares have par value) and consists of some combination of cash, tangible or intangible property and/or any other benefit to the corporation, having a value determined by or pursuant to a resolution of the board authorizing the issuance.  In 2022, Section 152 was amended to confirm that the board could delegate the authority to issue stock, and to determine the consideration therefore, to a person or another body, subject to certain parameters.  In conjunction, the 2022 amendments modified DGCL Section 153 to replace language indicating that treasury stock could be disposed of by the corporation for such consideration as the board of directors may determine with new language stating that treasury stock may be disposed of “in the same manner that shares of stock are issued pursuant to § 152.”  The 2023 amendment is intended to negate any implication that the 2022 amendment required a purchaser of treasury shares to pay consideration that equals or exceeds their par value.  

            SB 114 also amends DGCL Section 160 to clarify that nothing in that section is intended to limit the right of a corporation to resell treasury shares following a repurchase or redemption unless the shares are, or are required under the terms of the certificate of incorporation to be, retired. 

            Rights and Options Respecting Stock.  Just as a corporation’s board of directors (or a committee) may delegate to agents or other bodies the authority to issue capital stock (subject to certain established parameters), DGCL Section 157 permits the board or a committee to delegate the authority to issue rights and options with respect to stock.  The 2023 DGCL amendments modify Section 157(b) to clarify certain matters relating to the authorization by board of directors (or a committee) of stock options or other rights