Clark Nevada Jury Instruction — 1.9.5.1 Corporation As Alter Ego Of Stockholder is a legal concept used in corporate law to determine when a corporation can be treated as the "alter ego" of a stockholder or shareholder. This instruction is applied in cases where the corporate veil is pierced, meaning that the court can disregard the legal distinction between the corporation and its owner, holding the owner personally liable for the corporation's obligations. In such cases, the court examines various factors to determine if the corporation is merely a front or alter ego of the stockholder. These factors may include: 1. Unity of interest and ownership: The court evaluates if the stockholder exercises complete domination and control over the corporation, using it as their personal instrumentality. If the stockholder treats the corporation's assets as their own or fails to maintain adequate corporate formalities, the court may consider piercing the corporate veil. 2. Inadequate capitalization: If the corporation is formed with insufficient capital to cover its potential liabilities, which is often referred to as undercapitalization, it raises suspicions of the stockholder's intent to avoid personal liability. The court may consider piercing the corporate veil to prevent unjust outcomes. 3. Failure to observe corporate formalities: If the stockholder fails to follow basic corporate formalities, such as holding regular director and shareholder meetings, keeping accurate financial records, or adhering to corporate bylaws, it suggests that the corporation is merely an extension of the stockholder's personal affairs. 4. Fraudulent conduct: If the corporation is used to perpetuate fraud, illegal activities, or to shield assets from creditors, the court may disregard the corporate form and directly hold the stockholder accountable. Different types or variations of Clark Nevada Jury Instruction — 1.9.5.1 Corporation As Alter Ego Of Stockholder may exist depending on the jurisdiction or specific circumstances of the case. Some additional instructions might include: 1. Alter Ego Liability for Contractual Obligations: This instruction addresses situations where a stockholder enters into a contract on behalf of a corporation but does not fulfill the terms, leading to potential personal liability. 2. Alter Ego Liability for Tortious Acts: In cases where a stockholder uses a corporation as a shield to avoid responsibility for their own wrongful acts, this instruction considers piercing the corporate veil and holding the stockholder directly liable for the tortious conduct. It's important to consult legal professionals for accurate instructions relevant to specific jurisdictions and cases, as the application of alter ego liability can vary.