Many people nowadays have legal entities like corporations and limited liability companies. With the Internet, forming such entities is much simpler now than it was years ago when a lawyer was required for even the most basic of transactions. If you have formed a legal entity yourself, one situation you might encounter is what to do if your entity gets sued or otherwise finds itself in court. An individual generally has the right to represent themselves in court subject to obvious limitations, such as if the individual is a minor, has dementia, etc.
However, a legal entity — such as a corporation or a limited liability company — generally cannot represent itself in court and must be represented by an attorney. There is no California statute that says this, but it is instead the result of many courts in California holding so over the last 40 or so years. The case I always cite to is the 1978 California Supreme Court case of Merco Construction Engineers v. Municipal Court. The cite, for the lawyers in the audience, is: 21 Cal. 3d 725.
This rule of “entities must hire an attorney” applies even though your particular corporation or limited liability company is just you. The rule also applies even if the case your entity is involved in is super simple, completely frivolous, etc.
California statutes provide for two exceptions to this rule that a legal entity cannot represent itself in court and must hire an attorney:
- First, a legal entity may be represented by a non-lawyer in a small claims court action. This is under Code of Civil Procedure section 116.540(b). Under Code of Civil Procedure section 116.530, attorneys in California generally cannot represent clients in small claims court actions.
- Second, a non-lawyer can appear for a legal entity at a debtor’s exam under Code of Civil Procedure section 708.150(d).
Forming a legal entity has become simpler and cheaper over the last several years. It is something that can confer benefits of many different kinds to your business, but it does occasionally impose costs as well.