3.2.1.2 State level

As explained above, each state has a corporate law for companies registered in it. And unlike European countries, corporate statutes in the US usually do not distinguish between publicly held and closely held corporations. All corporations, whether they are large or small, are in principle subject to the same set of rules in the corporate statutes.1 Among the states, Delaware, famous for its enabling and flexible rules, poses itself as a prominent jurisdiction in corporate law. So besides referring to provisions in the RMBCA and the ALI principles, studies in this chapter also examine provisions in the Delaware General Corporate Statute as well as significant cases judged by the Chancery Court and the Supreme Court. For the convenience of the case study, a brief overview of the court system in Delaware is presented here.

The Delaware Judiciary consists of the Supreme Court, Court of Chancery, Superior Court, Family Court, Court of Common Pleas, Justice of the Peace Court, and related judicial agencies. The structure within this system resembles a pyramid. 2 At the top is the Supreme Court which receives appeals directly from the Court of Chancery, Superior Court, and Family Court. At the base of the pyramid are the Justice of the Peace Court and the Alderman's Courts. See the diagram inserted below. Corporate issues are heard by the Court of Chancery and appeals from the Court of Chancery may be taken to the Supreme Court.3

The diagram is from: http://courts.delaware.gov/Courts/?index.htm