New Mexico Jury Instruction - 1.9.5.1 Corporation As Alter Ego Of Stockholder

• Category: Federal - Jury Instructions
• State: Multi-State
• Control #: US-11CF-1-9-5-1
• Format: Word; Rich Text

Description

This form contains sample jury instructions, to be used across the United States. These questions are to be used only as a model, and should be altered to more perfectly fit your own cause of action needs.

New Mexico Jury Instruction — 1.9.5.1 Corporation As Alter Ego Of Stockholder: Detailed Description and Types In legal proceedings involving corporations and stockholders, the New Mexico Jury Instruction — 1.9.5.1 Corporation As Alter Ego Of Stockholder is a crucial instruction provided to the jury. This instruction focuses on the concept of piercing the corporate veil, which allows for the possibility of holding individual stockholders personally liable for the debts or actions of the corporation. Under certain circumstances, a claimant may argue that a corporation is merely the alter ego of a stockholder or a closely-held group of stockholders. This means that the corporation and the stockholder(s) are so intertwined that they essentially operate as one entity, thereby negating the separate legal identity of the corporation. If successful, the corporate veil can be pierced, exposing the stockholder(s) to personal liability. This jury instruction is designed to guide the jury in assessing whether it is appropriate to disregard the corporate entity and hold the stockholder(s) personally liable. The instruction provides relevant legal criteria to consider, including: 1. Control: Whether the stockholder(s) exercise total domination and control over the corporation, utilizing it as a mere instrumentality or their personal business vehicle. 2. Formalities: Whether the stockholder(s) fail to observe corporate formalities such as holding regular meetings, keeping adequate records, or adhering to proper corporate governance practices. 3. Capitalization: Whether the corporation is adequately capitalized, considering its intended business activities and potential liabilities. 4. Confusion of assets: Whether there is a commingling of personal and corporate assets, making it impossible to distinguish between them. 5. Fraud or injustice: Whether the maintenance of the corporate structure would promote fraud or permit injustice, or whether it is necessary to achieve an equitable result. Additionally, variations or types of this instruction may exist depending on the specific circumstances of the case. For example: 1. Corporation As Alter Ego Of Individual Stockholder: This instruction focuses on piercing the corporate veil to hold an individual stockholder personally liable for corporate obligations. 2. Corporation As Alter Ego Of Group of Stockholders: This instruction deals with situations where a group of closely-held stockholders collectively function as the alter ego of the corporation, justifying personal liability. It is vital for the jury to carefully consider the evidence presented and weigh the factors outlined in the jury instruction to determine whether the corporation should be treated as the alter ego of the stockholder(s). This decision carries significant legal and financial consequences, making a comprehensive understanding of the instruction and its types essential for informed decision-making.