Delaware has passed a major distributed ledger milestone as Governer John Carey has signed legislation passed by the Delaware General Assembly that will let Delaware corporations store business records on distributed ledgers.
"This innovative legislation will allow Delaware companies to finally toss the stacks of paper stock ledgers collecting dust on shelves and will provide a secure and immutable electronic record of share activity that eliminates the opportunity for bookkeeping errors and costly ownership disputes," wrote John Legaré Williams, president of The Williams Law Firm, wrote in the Delaware Business Times. "With the current paper-based system, tracking stock ownership in a corporation as it grows and changes has been a nightmare for many companies. It is a challenge to reconstruct the stockholders at any given point in time, including the exact number of shares held and any restrictions or agreements that apply to those shares, which impacts shareholder voting."
The new Delaware legislation—the first of its kind anywhere—will allow existing corporations to convert their paper-based shares to distributed ledger shares, while new corporations will use electronic records from the outset and never hold paper records, he noted. "Corporate records will be easy to track and verify, allowing corporations to save significant time and money and to avoid costly litigation."