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Friday, May 29, 2020

Not in Missouri anymore: Royals move legal home to Delaware

The Kansas City Royals of Delaware.

The Kansas City Royals have moved—not actually, but legally.

The Royals changed their legal home from Missouri to Delaware last fall during the process of the team’s sale from David Glass to a group headed by John Sherman. The switch was mentioned Monday in a filing with the 9th Circuit U.S. Court of Appeals by Major League Baseball’s law firm in its defense of a lawsuit by minor leaguers claiming they are not being paid minimum wage.

Kansas City Royals Baseball Corp., a Missouri corporation, had been a defendant in the suit, which was filed in 2014. That company filed a certificate of conversion with the Missouri secretary of state on Nov. 19 to convert to Kansas City Royals Baseball Club Inc., a Delaware corporation. Then the newly named corporation converted to Kansas City Royals Baseball Club LLC, a Delaware limited liability company.

RoyalsRetro (AG#1F) Posted: May 29, 2020 at 12:25 PM | 7 comment(s) Login to Bookmark
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   1. A triple short of the cycle Posted: May 29, 2020 at 03:36 PM (#5954390)
Kansas City Royals of Delaware has an okay ring to it. KC of D, for short?
   2. Fernigal McGunnigle Posted: May 29, 2020 at 03:55 PM (#5954395)
TFA might say this, but the Wilmington Blue Rocks have been a Royals farm team since they moved to Delaware in 1993. Their "players of note" list at Wikipedia is a who's who of Royals, uh, royalty over the last 27 years, from Moose Tacos to Jimmy Gobbles. Not that the Royals have any reason to "move" to Delaware other than to dodge taxes, but unlike every other MLB team they have a direct link to the state.
   3. Pasta-diving Jeter (jmac66) Posted: May 29, 2020 at 04:00 PM (#5954396)
That used to be quite common in sports--when I was growing up,(in the fiddies and 60s) the Cleveland Browns were officially incorporated in Delaware
   4. The elusive Robert Denby Posted: May 29, 2020 at 08:16 PM (#5954437)
So now I can run by the Royals business office after visiting a screen door factory.
   5. Steve Parris, Je t'aime Posted: May 30, 2020 at 10:36 AM (#5954479)
Not that the Royals have any reason to "move" to Delaware other than to dodge taxes, but unlike every other MLB team they have a direct link to the state.

If it was just about taxes the Royals could incorporate in Wyoming, where unlike Delaware there is no corp income tax. Companies incorporate in Delaware because the corporate law leans towards supporting businesses and has been well developed for decades.
   6. Ned Garvin: Male Prostitute Posted: May 30, 2020 at 02:09 PM (#5954503)
It seems like if your company is based out of Delaware, but operates in Missouri, that you just might be involved with interstate commerce...

I know this does not relate to the actual decision, but if I was a minor leaguer losing my job right now, I would be thinking hard about finding a way to challenge the anti-trust decision.
   7. Zach Posted: May 30, 2020 at 09:30 PM (#5954553)
The Royals aren't laying any minor leaguers off this year, so don't plan any road trips to Wilmington.

#5 has it right: a lot of the literature on corporations just flat out says you want to be a Delaware C corporation.

For example:

A very important preliminary question is how you should set up your company. This isn’t a hard question. You should set up as a Delaware C corporation. That is the right answer. You incorporate to achieve separation of your personal affairs and company affairs. You want to create a structure where you can let other people in, sell equity, etc. And incorporating can give you a lot more legitimacy. A business group called “Larry Page and Friends” might work today. It would not have worked in 1997. Give yourself the basic structure you’ll need.


Over 50% of C corporations get incorporated in Delaware. There are many reasons for this. Delaware business law is clear and wellunderstood. Its chancery courts are fast and predictable. The judges are pretty good. And there’s some signaling too; everybody sort of does it, and most everybody thinks it’s a good thing to do. You can just take it on faith that you want to be a Delaware C corporation.

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