[citation needed] The internal affairs doctrine ensures that such issues as voting rights of shareholders, distributions of dividends and corporate property, and the fiduciary obligations of management are all determined in accordance with the law of the state in which the company is incorporated.
Because of this, and the fact that the internal affairs doctrine has been used by courts to allow application of the lex incorporationis, this has created a competitive market for incorporations among the states.
Several states have taken advantage of this situation by becoming corporate havens, particularly Delaware and Nevada.
A few states, like California, narrowly apply the internal affairs doctrine.
[4] California broadly applies the public policy exception to the internal affairs doctrine, meaning that it will not defer to the law of the state of incorporation whenever that law contradicts its own domestic regulatory schemes that were intended to serve broad public interests as distinguished from the "more narrow interests of a corporation's shareholders".