pjc-family-2024-lib

PJC 205.3

D ISREGARDING C ORPORATE F ORM

COMMENT When to use. The foregoing series of questions should be used if a party claims that the corporate form should be disregarded on the basis of alter ego or because the corporation has been used as part of a basically unfair device to achieve an inequitable result. Not for corporations with third-party owners or to affect creditors’ claims. These questions and instructions are written only for situations involving closely held corporations owned entirely by the spouses. They are not designed for use in situations in which any third party owns an interest, whether that ownership interest is nominal or significant, nor are they intended to affect the interests of creditors or other persons with security interests in corporate property. The variety of situations possible when persons other than the spouses may assert a claim is too great to be comprehensively covered in this book. Include these additional instructions. The foregoing questions should be accompanied by the instruction in PJC 205.1 (mere tool or business conduit (alter ego)), the instruction in PJC 205.2 (other unfair device), or both. Applicable portions of the instructions in PJC 202.1 (separate and community property) through PJC 202.10 (agreement to convert separate property to community property) should be included in the charge. If only one asset is in issue. If the characterization of only one corporate asset is in issue, the description of the asset should be substituted for the phrase each of the fol lowing assets in Questions 2 and 3. In such a case, the phrase “for each asset” should be omitted from the second sentence of the third paragraph in Question 2, and the word the should be substituted for the word an in the third and fifth sentences of that paragraph. If both parties assert separate-property claims. Questions 2 and 4 are written for situations in which only one of the parties asserts a claim that the corporation or its assets constitute that party’s separate property. If both parties assert separate-property claims, the questions, instructions, and answer blanks can be appropriately modified; see PJC 202.12 (separate property—both parties claiming separate interests).

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