Under our free-enterprise economic system, the law permits – even encourages – people to form corporations as a way to attract stockholder investments. Stockholders can invest their money in corporate enterprises without risking individual liability for corporate acts and transactions. In return, society gets the benefit of jobs and other commercial activity that corporate businesses create. So, in most cases, the status of a corporation as a separate legal entity apart from its owners or stockholders must be respected and preserved.
But this rule is not absolute, and you can disregard the separate status of a corporation when a stockholder uses the corporation as a mere tool for the purpose of evading or violating a statutory or other legal duty, or for accomplishing some fraud or other illegal purpose.
To decide whether to treat [Corporation] as the alter ego of [Stockholder], you should consider:
(b) whether the corporation kept books and records, held regular director meetings, and observed other corporate legal formalities;
(c) whether the corporate funds were comingled with the stockholder’s funds;
(d) the activity or inactivity of others as officers or directors in the corporation’s business affairs; and
(e) any other factors the evidence disclosed tending to show that the corporation was or was not operated as an entity separate from its owner.
