Unauthorized Practice of Law by a Corporation, LLC, or S-Corp
When a corporation, LLC, or S-Corp is involved in a lawsuit, can an agent appear in court on the corporation’s behalf? The answer in North Carolina is no. North Carolina General Statute § 84-5 provides that a corporation cannot practice law in North Carolina. Although agents may negotiate with parties on behalf of the corporation, they cannot take that next step and represent the corporation in the ensuing litigation,. A corporate officer cannot even show up in court to request an extension or avoid a default judgment or summary judgment. I have seen many corporate officers receive a summons or a notice, they show up prepared, and they are not allowed to present their case. They cannot even speak at a court hearing. Only a duly licensed attorney may make an appearance on behalf of the corporation in court. If your corporation or LLC needs assistance with a court appearance, call the Raleigh civil litigation attorneys of Maginnis Law PLLC at (919) 526-0450.
The North Carolina Court of Appeals draws a clear line between allowing a corporation to make mere appearances in negotiations and other matters, and permitting a corporation to practice law. Since corporations can only act through its agents, they may negotiate with an opposing party and make appearances on behalf of the corporation in an out-of-court capacity. However, a corporation must be represented by a duly admitted and licensed attorney and cannot proceed pro se in court appearances. This is true in both District and Superior court and applies equally to all corporate entities including corporations, LLCs, and S-Corps. There is an exception in that a corporation does not need to be represented by an attorney in the Small Claims Division of North Carolina’s court system. However, to avoid the unauthorized practice of law, an attorney must be hired on behalf of the corporation in any other court proceedings.
The Raleigh Civil Lawyers of Maginnis Law PLLC regularly represents business entities throughout the triangle, including Raleigh, Durham, Chapel Hill, Cary, Apex, Knightdale, Morrisville, and Garner. Our firm offers a variety of billing arrangements such as hourly, retainer, and flat rate. To speak with one of our attorneys, contact the firm at (919) 526-0450, or send a confidential email inquiry using our contact page.