Scrabble tiles spelling LAWYER which a company needs to represent it in courtIf you watch enough television or movies, you've probably seen some dramatic court scenes where someone accused of a crime declares that they will represent themself, fight for justice and prove their innocence. In our court systems, it's your right as an individual to represent yourself. Depending on the type of case, you may also be entitled to an attorney as a right under the law (usually in criminal cases). But what about your business? Can you represent your business in Court if you are the owner? The short answer is no.

Companies Need to be Represented by an Attorney

As a general rule, companies need to be represented by an attorney. While a company has the power to file a lawsuit or defend itself, an attorney needs to represent the company. Even though a company is a "person" under laws, at the end of the day, it is a "person" created by the corporation laws of the state where it is incorporated. The people who work at the company are the ones who make up the company, but to allow them to represent the company if they are not an attorney would be an unauthorized practice of law.

There are exceptions to this rule though,

  • One exception to this rule is where your company is a sole proprietorship. In this case, you have likely not filed with your state and incorporated as a separate legal entity. You are actually the company and thus you can represent yourself and the company.
  • Another exception is if you are the owner of a company and are also a licensed attorney in the court where the company needs a lawyer.

For most companies, hiring an attorney can be a significant expense. One of the primary considerations for the company is whether it makes sense to hire an attorney to file/defend a lawsuit or if it makes more economic sense to work out a resolution with the other party. While this is an important decision that your company should not take lightly, do not wait too long to make this decision. Whether it is the statute of limitations (how much time you have to bring a lawsuit) or the time to answer a lawsuit, there are likely time limits by which you need to make this decision. So whether you are going to hire a lawyer or not, you should still speak to one so you can determine what's best for you.

Owners Can Represent Themselves

There is one common way that a business owner can end up representing themselves and that's when they are sued in their individual capacity (this usually means that your name is in the caption of the lawsuit). If you've signed a personal guarantee for an obligation of the business, you'll often be involved in the lawsuit based upon that document as well. For owners who are not attorneys, you are able to represent yourself in connection with that claim. But, if you are already hiring an attorney to represent the company, then it's often best to have the attorney represent you and the business to ensure that you are properly protected in court.

Next Steps

If your business needs to bring a lawsuit or has been served with a lawsuit, let's set up a Legal Strategy Session to discuss the best options for you and your business.

Andrew Ayers
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I work with business and estate planning clients to craft legal solutions to protect their legacies.
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