N.C.P.I.—Civil 807.54

The (state number) issue reads:

"Was (name corporation) a closely held corporation?"

On this issue the burden of proof is on the plaintiff. This means

that the plaintiff must prove, by the greater weight of the evidence, that

(name corporation) was organized by its shareholders to take advantage

of the benefits of incorporation while conducting themselves more like

partners for the purposes of internal governance.2 Corporations typically

benefit their shareholders by conferring limited liability, perpetual

existence and easy transferability of ownership interests. In closely held

corporations, the shareholders seek these same benefits, but as among

themselves they are more like partners who act on important matters by

consensus or by unanimous or near unanimous agreement.

In deciding whether (name corporation) was closely held, you may

consider

[whether the shares of (name corporation) are owned by a limited

number of people]

[whether the shareholders have other relationships outside of

(name corporation), such as family ties]

[whether the shareholders originally founded or organized (name

corporation)]

[whether the shareholders provided for partner-like rules of

governance in a written shareholders' agreement]

[whether the shareholders have by course of dealing, course of

performance or other regularly observed custom or behavior conducted

themselves in a partnership-like manner]

[whether the shareholders, prior to incorporation, owned and

operated the business of (name corporation) as a [partnership] [name

similar entity, e.g., limited liability company]]

[whether the shareholders held themselves out to third parties or

to the public to be more like partners than shareholders (such as in a

business plan)]

[whether the percentage ownership of shares is relatively uniform

among the shareholders]

[whether the shareholders have availed themselves of statutory

procedures that dispense with standard corporate governance (such as

dispensing with a board of directors)3]

[whether the internal governance of (name corporation) has by

custom or practice been conducted informally without adherence to

standard corporate procedures]

[state other factors as supported by the evidence].

Finally, as to the (state number) issue on which the plaintiff has

the burden of proof, if you find by the greater weight of the evidence that

(name corporation) was a closely held corporation, then it would be your

duty to answer this issue "Yes" in favor of the plaintiff.

If, on the other hand, you fail to so find, then it would be your duty

to answer this issue "No" in favor of the defendant.