Articles of association review in Delaware, USA

An articles of association review in Delaware, USA is not, strictly speaking, a review of articles of association at all. Delaware corporations are constituted by a certificate of incorporation and governed day to day by bylaws, and the first task of this work is translating what a client means by "the articles" into the two Delaware documents that actually carry legal weight. Doing business in Delaware, USA on the strength of a certificate and bylaws that have not been read against the transaction in front of the board is a common and avoidable source of delay.

A US holding company is raising a new class of preferred stock and the term sheet assumes the certificate of incorporation already authorises it. The board asks whether the bylaws' quorum and voting provisions still work once the new class carries its own voting rights, and nobody in the group has looked at the certificate since the entity was formed.

This page sets out what changes in Delaware, USA compared with the generic version of this review, what filing consequence follows from a change to either document, and where the boundary of this firm's advisory role sits under Delaware, USA company law.

What changes in an articles of association review in Delaware, USA

Delaware does not require a company's bylaws to be filed on the public record. The certificate of incorporation, and any certificate of amendment, become part of the state's corporate registry; the bylaws stay inside the company, held nowhere but the minute book. That single fact reshapes what an articles of association review means once the client is doing business in Delaware, USA rather than in a jurisdiction where the constitution is a single filed instrument.

The mechanics common to this review across jurisdictions are set out in the practice's articles of association review page; what follows is what is specific to Delaware, USA. The review runs in two passes. The first tests the certificate of incorporation against what is actually filed and publicly visible: the authorised share structure, any series already designated, and any provision restricting a merger, an asset sale, or a change of control. The second tests the bylaws against Delaware, USA company law as it applies to matters the certificate is silent on: quorum, notice, the mechanics of a board resolution, indemnification, and how vacancies on the board are filled.

Where the certificate and the bylaws disagree, the certificate controls, and a bylaw provision inconsistent with it is not enforceable merely because it is more convenient. A group used to a single set of articles carrying both functions, as in many offshore or English-law constitutions, often assumes the Delaware bylaws hold the same status as filed articles elsewhere. A jurisdiction where the entire constitution is filed and public, such as the version of this review for the Dubai International Financial Centre, presents the opposite problem: everything is visible, including provisions a board might have preferred to keep out of view.

The local requirement or test that drives the work

The test that drives this work in Delaware, USA is not a filing deadline; it is whether a specific decision the board is about to take is actually authorised by the documents as they stand. A board resolution approving a new financing round, a change of registered agent, or an amendment to the certificate is only as good as the quorum and voting mechanics it was passed under, and those mechanics live in the bylaws rather than in the certificate. How a board resolution is properly called and recorded in Delaware, USA is addressed separately in the board meeting protocol for Delaware, USA; this review assumes that protocol is followed and tests the documents it operates under, not the minutes themselves.

The most common trigger is director appointment. Specifically, whether the director appointment terms set out in the bylaws still match who is entitled to appoint a director once a new class of stock exists. A Delaware corporation's bylaws typically set out how a director is appointed, how a vacancy is filled between annual meetings, and whether the board or the stockholders hold that power. A group that amends its certificate to create a new class of stock without checking whether that class carries its own right to appoint a director frequently discovers the gap only when the new investor asks to exercise it.

Once a certificate of amendment removing that appointment right is filed and accepted by the state, reverting to the prior wording is not a matter of correcting a clerical error. The remedy of restoring the deleted right ceases to be available, and putting it back requires a fresh amendment carried under whatever vote threshold the current, amended certificate now sets.

A change to who can appoint a director inside a Delaware certificate is easy to make and hard to unwind once it is filed. If a financing round or a governance change is about to touch the certificate or the bylaws, the appointment terms need testing before the resolution is passed, not after.

Review your appointment terms. Write to info@hreithlaw.com with the jurisdiction and the structure.

The filing, register or forum consequence

Filing consequence is where the two documents diverge sharply. An amendment to the certificate of incorporation takes effect once accepted by the state's corporate registry, and from that moment it is what a lender, an acquirer, or the state itself is entitled to rely on. Correcting a mistake in a filed certificate is not a matter of quietly reissuing it: the correction has to be filed too, and the record then shows both the original error and the correction, permanently.

The bylaws follow a different path because there is no filing step. A board resolution adopting or amending the bylaws is effective the moment it is validly passed and recorded in the minute book, unless the certificate itself requires stockholder approval for that specific change. That difference is precisely why a review has to check, clause by clause, which document is actually being changed before the board votes. The forum for a later dispute over a bylaw amendment differs from the forum for a dispute over whether the certificate was properly amended, because only one of the two events left a public trace.

A board resolution ratifying a defective appointment after the fact can still fix the internal record, but only up to the point a third party has already extended credit or taken security against a capital structure stated in the filed certificate. Once that reliance exists, the remedy of unwinding it closes off, whatever the board later resolves among itself.

What this service does not include in Delaware, USA

This review does not include acting as, supplying, sourcing or arranging a director, an officer, a registered agent, or a nominee stockholder for a Delaware corporation, and it does not include any activity for which a trust or corporate service provider licence is required. Delaware law does not itself make acting as a director, or arranging for another person to do so, a licensed activity 01, but the boundary this firm works to is set once, across every jurisdiction it advises in, and it does not move because a particular state happens not to license the activity.

What the client receives instead is the requirement mapped against the actual documents: which provision of the certificate or the bylaws governs the decision in front of the board, what vote or filing it requires, and what is exposed if that sequence is skipped. Where director appointment terms are the issue, the deliverable is the appointment clause reviewed and marked up against what the board actually intends, not a person put forward to fill the seat. Any stockholders' agreement that claims to override either document raises exactly the conflict addressed in this comparison of shareholders' agreements against articles, and the same hierarchy question arises in Delaware, USA even though the vocabulary differs.

Before instructing this review, a board or a general counsel should have in hand:

• The current certificate of incorporation as filed, including every certificate of amendment
• The bylaws currently in force and the minute book entries adopting or amending them
• Any stockholders' agreement or side letter that claims to override either document
• The specific decision the board is about to take, stated as a single sentence

Where a Delaware corporation has grown through several rounds of financing, the appointment terms current directors were actually appointed under are often scattered across certificates, bylaw amendments and board resolutions that were never reconciled. That gap tends to surface exactly when a new investor or acquirer asks who can remove a director and how.

Review your appointment terms. Write to info@hreithlaw.com with the jurisdiction and the structure.

Frequently asked questions

What happens if the certificate and bylaws are never checked against each other?

The certificate and the bylaws usually keep working quietly until a specific event tests them, such as a financing round, a new director, or a merger. At that point an inconsistency that has sat unnoticed for years can stall the transaction until it is resolved, and resolving it under time pressure costs more attention than checking it in advance would have.

How often does this review need repeating?

There is no fixed statutory interval for a Delaware corporation to review these documents. The trigger is not a calendar date; it is any event that changes the capital structure, the board, or a stockholder's rights, and the review should happen before that event is documented, not after. How the output of this review should actually be used once it lands on a board's desk is set out in this note on reviewing the output of an articles of association review.

Does the review change for a foreign-owned Delaware company?

The documents themselves do not change because the parent is foreign. What changes is the number of people whose consent a filed amendment or a board resolution actually binds, and whether a foreign parent's own governance rules impose an extra layer of approval before the Delaware board can act.

What does the review require from the client in practice?

It requires the certificate of incorporation as filed, including every amendment, and the bylaws currently in force with the minute book entries that adopted them. Without both documents side by side, a reviewer cannot tell which one actually governs the point in question.

Who inside the company is actually responsible for this?

Responsibility sits with the board, not with whoever happens to hold the title of secretary or registered agent. Treating a director's appointment or a bylaw amendment as a formality that someone else will handle is the single most common reason this review gets requested too late.

Johanna Reinholt, Partner. Specialisation: constitutional documents and cross-border governance structures. Johanna advises boards on constitutional documents across common-law and civil-law jurisdictions, with a focus on where a certificate, articles or bylaws actually diverge from what a board assumes they say. She works closely with the firm's substance and disputes practices where a constitutional defect turns into a live governance dispute.