How to amend certificate of incorporation in Delaware

Board resolution under DGCL § 242

The board must adopt a resolution declaring the advisability of the amendment and either calling a stockholder meeting or, where § 228 allows, soliciting written consents. The resolution states the proposed amendment verbatim. Under § 242(b)(1), the amendment must then be approved by stockholders at the required threshold.

Stockholder approval threshold under § 242(b)

The default Delaware threshold is a majority of the outstanding stock entitled to vote. Note: this is the share of total outstanding shares, not the share of votes cast. A stockholder who does not vote is effectively voting "no." The certificate of incorporation may set a higher threshold (supermajority); it cannot set a lower one. Under § 242(b)(2), if the amendment affects a class differently, that class must approve separately by the same threshold.

Written consent under § 228

Stockholder approval may be by written consent under DGCL § 228, with the same threshold as a meeting would require (majority of outstanding voting shares) unless the certificate of incorporation prohibits written consent. Written consent is widely used in private companies; less common in publicly traded ones (where § 228 may be disabled by the certificate).

Certificate of amendment filing under § 103

The certificate of amendment is signed by an authorized officer, filed with the Delaware Division of Corporations, and accompanied by the filing fee. The amendment becomes effective on the filing date or a specified later date. Under § 103(d), the amendment may have a delayed effective date up to 90 days after filing.

Appraisal rights and class-vote analysis

Appraisal rights under DGCL § 262 are limited and most amendments do not trigger them. The most common amendment-triggered appraisal scenario is a reverse stock split that cashes out fractional shares. Class voting under § 242(b)(2) requires careful analysis: if the amendment affects the rights, preferences, or privileges of a class differently from other classes, that class votes as a separate class.

Procedure

The amendment procedure as it applies in Delaware, in seven steps:

1. Confirm the certificate of incorporation provision to amend

   Identify the provision being amended (corporate name, authorized capital, class structure, voting rights, indemnification, exclusive forum, etc.). Review the existing certificate and any prior amendments to confirm the precise text being modified. Confirm whether the amendment affects any class differently from others (triggering § 242(b)(2) class voting).

2. Draft the amendment in clean replacement form

   Draft the amendment as the new text of the affected provision, not as redline. Include the article and section being amended. Multiple amendments may be combined in a single certificate of amendment. The drafting must remain consistent with the rest of the certificate.

3. Pass the board resolution under DGCL § 242(b)(1)

   The board adopts a resolution declaring the amendment advisable, recommending it to stockholders, and either calling a special meeting or authorizing written-consent solicitation. The resolution should reproduce the amendment text verbatim.

4. Obtain stockholder approval at the § 242 threshold

   Stockholder approval requires a majority of the outstanding stock entitled to vote (default threshold). If the certificate of incorporation specifies a higher threshold (supermajority), that controls. If the amendment affects a class differently, obtain a separate class vote at the same threshold. Approval may be at a stockholder meeting or by written consent under § 228.

5. File the certificate of amendment with the Delaware Division of Corporations

   The certificate is signed by an authorized officer, accompanied by the filing fee, and submitted to the Delaware Division of Corporations. The amendment becomes effective on the filing date unless a later effective date (up to 90 days) is specified under § 103(d).

6. Record the amendment in the minute book

   Place the filed certificate of amendment (with the Delaware filing receipt), the board resolution, the stockholder approval (meeting minutes or written consents), and any class-vote documentation in the minute book. Update the master certificate of incorporation document to reflect the amendment.

7. Notify counterparties and update downstream records

   Notify counterparties to material contracts that reference the certificate (lenders, investors with voting agreements, key suppliers). If the amendment affects authorized capital, update the share register, cap table, and any outstanding option grants. Update the Delaware franchise tax filing if authorized shares changed.

Common mistakes

Common Delaware-specific failure points in amending the certificate of incorporation:

• Calculating the threshold as a majority of votes cast rather than majority of outstanding shares
• Missing the class-vote requirement under § 242(b)(2) when amendments affect a class differently
• Filing the certificate of amendment without resolving an underlying defect (consider § 204 ratification first if the prior corporate action being amended was itself defective)
• Failing to update downstream records (share register, cap table, option pool) when authorized capital is amended