Delaware is widely recognized as the leading state for business incorporation, due largely to its comprehensive and well-established legal framework. Texas, however, was the first mover in one important area: divisive mergers. Divisive mergers are a statutory mechanism that allow businesses to divide into multiple entities and allocate assets and liabilities among them without, among other benefits, triggering contractual restrictions on assignment. They can facilitate restructurings, acquisitions, divestitures, or allocation of assets or liabilities, but must be approached carefully to avoid potential fraudulent claims and third-party challenges.

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