Corporate Shareholder Agreement Governance-Override Requirements in Delaware

At a glance

Requirements one by one

Delaware makes the corporation a contracting party

Section 141(a) ordinarily places the corporation's business and affairs under the direction of its board, except as otherwise provided in the General Corporation Law or the certificate of incorporation. Section 122(18) then gives the corporation a specific power, notwithstanding that board-management default, to contract with one or more current or prospective stockholders or beneficial owners in that capacity.

“Notwithstanding § 141(a) of this title, [the corporation may] make contracts with 1 or more current or prospective stockholders (or 1 or more beneficial owners of stock), in its or their capacity as such.”

This is not an all-current-stockholder agreement route. The section states no stockholder-unanimity, class-vote, signature, incorporator, subscriber, or no-shares substitute. It does require minimum consideration determined by the board, which may include inducing a stockholder or beneficial owner to act or refrain from acting (8 Del. C. § 122(18)).

The contract may regulate corporate action within stated limits

The corporation may restrict or prohibit itself from taking specified actions, require approval or consent before it acts, or covenant that the corporation or specified people or bodies will act or refrain from acting. The approval or covenant actors may include the board and current or future directors, stockholders, or beneficial owners.

The statute does not treat board authority alone as defeating a restriction, prohibition, or covenant. But it sets a different outer boundary:

“No provision of such contract shall be enforceable against the corporation to the extent such contract provision is contrary to the certificate of incorporation or would be contrary to the laws of this State ... if included in the certificate of incorporation.”

The comparison to the certificate is an enforceability limit, not a requirement that the contract itself appear in the certificate. Section 122(18) also states no articles, bylaws, separate-filing, corporate-knowledge, or express-writing route for this contract.

The statute supplies contract remedies, not purchaser rescission

For every Section 122(18) contract, the corporation is subject to remedies available under the law governing the contract, including remedies for failure to perform or comply with its agreements. The section does not create a certificate legend, uncertificated-share statement, certificate recall, purchaser-knowledge rule, rescission right, or purchase-based limitations period.

“The corporation shall be subject to the remedies available under the law governing the contract, including for any failure to perform or comply with its agreements under such contract.”

The contract's own terms and otherwise applicable law therefore matter for amendment, revocation, extension, successors, duration, breach, and remedy questions that Section 122(18) does not answer.

The 2024 enactment reaches earlier contracts

Section 122(18) took effect on August 1, 2024. The enacting act applies the new rule to corporation contracts made on, before, or after that date, but excludes any civil action or proceeding completed or pending on or before the effective date (84 Del. Laws ch. 309, § 6).

The current section states no default or maximum term, renewal rule, new-holder termination event, or public-corporation cutoff. It also states no shift of director-law liability to the contract counterparty, release of directors, or special protection from stockholder personal liability.

What trips people up

Delaware's route does not require every current stockholder to join. It is a contract made by the corporation with one or more eligible current or prospective stockholders or beneficial owners, supported by board-determined minimum consideration.

“Notwithstanding § 141(a)” is not a blank check. A contract provision remains unenforceable against the corporation to the extent it conflicts with the certificate or fails the statute's Delaware-law test for a provision placed in the certificate.

The retroactivity clause has a litigation exception. The 2024 amendment reaches earlier contracts, but it does not apply to or affect a civil action or proceeding completed or pending on August 1, 2024.

Common questions

Must all Delaware stockholders sign the contract?

No such rule appears in Section 122(18). The corporation may contract with one or more current or prospective stockholders or beneficial owners.

Must the contract be placed in the certificate of incorporation?

Section 122(18) does not require that. The certificate instead supplies an enforceability boundary: a conflicting contract provision is not enforceable against the corporation to the stated extent.

Does the statute require a certificate legend for this contract?

No. Section 122(18) states no share-certificate or uncertificated-share notice rule for the corporation contract.

Does the route end when the corporation becomes public?

Section 122(18) states no public-company termination event. Public-company, securities, exchange-listing, fiduciary, and contract questions outside the section still require separate analysis.

Statutes and sources

• 8 Del. C. § 122(18) — eligible contract parties, board-determined minimum consideration, permitted restrictions, approvals and covenants, certificate-and-law limits, and contract remedies — https://delcode.delaware.gov/title8/c001/sc02/index.html#122 (accessed 2026-08-28)
• 8 Del. C. § 141(a) — ordinary board-management rule and chapter or certificate exceptions — https://delcode.delaware.gov/title8/c001/sc04/index.html#141 (accessed 2026-08-28)
• 84 Del. Laws ch. 309, § 6 — August 1, 2024 effective date, application to earlier and later contracts, and pending/completed civil-matter exception — https://legis.delaware.gov/SessionLaws?volume=84&chapter=309 (accessed 2026-08-28)