QUESTION

Is the nominated c corp president of a Nevada corp lliable for debts or product liability of the company?

Asked on Oct 03rd, 2011 on Corporate Law - Nevada
More details to this question:
N/A
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1 ANSWER

R. Christopher Reade
Under Chapter 78 of the Nevada Revised Statutes, an officer is not liable for the debts or liabilities of a corporation solely based upon his or her officer position.   Under NRS 78.130, the secretary or other officer of a private corporation was held to only hold the authority delegated to him by the bylaws and board of directors of the corporation and is not solely by reason of that office personally liable for debts of the corporation. Berman v. Riverside Casino Corp., 247 F. Supp. 243 (D. Nev. 1964), aff'd 354 F.2d 43 (9th Cir. 1965).  More specifically NRS 78.747 provides:  NRS 78.747  Liability of stockholder, director or officer for debt or liability of corporation.             1.  Except as otherwise provided by specific statute, no stockholder, director or officer of a corporation is individually liable for a debt or liability of the corporation, unless the stockholder, director or officer acts as the alter ego of the corporation.             2.  A stockholder, director or officer acts as the alter ego of a corporation if:                   (a) The corporation is influenced and governed by the stockholder, director or officer;                   (b) There is such unity of interest and ownership that the corporation and the stockholder, director or officer are inseparable from each other; and                   (c) Adherence to the corporate fiction of a separate entity would sanction fraud or promote a manifest injustice.            3.  The question of whether a stockholder, director or officer acts as the alter ego of a corporation must be determined by the court as a matter of law. However being an officer of a corporation does not in and of itself absolve a person of for his or her individual acts and liabilities. For example, officers and directors have been held personally liable where they transferred assets to shareholders instead of creditors. See Nevada Land & Mortgage Co. v. Lamb, 90 Nev. 247, 524 P.2d 326 (1974)
Answered on Nov 16th, 2011 at 11:34 PM

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