Whether your entity is filing a claim or defending a claim, your entity is required to retain counsel. Although, you own the company or corporation, your ownership status does not permit you to represent the entity in court. Certainly, like an attorney, you could become licensed and represent your company, corporation, or partnership, but your status as an owner does not give you the authority to practice law and represent your entity in a legal proceeding unless the amount in dispute is $2,500 or less and the entity’s stock is held by 5 or fewer shareholders (see Vir. Code Ann § 16.1-81.1).
Vir. Code Ann. § 16.1-88.03(A) makes it clear that a non-natural entity, like an LLC, corporation, or partnership, may (1) file a claim (2) request judgment, or (3) present facts in General District Court without an attorney, but section § 16.1-88.03(B) makes it clear that an attorney is required to litigate the claim. Specifically, § 16.1-88.03(B) states:
“Nothing in this section shall allow a nonlawyer to file a bill of particulars or grounds of defense or to argue motions, issue a subpoena, rule to show cause, or capias; file or interrogate at debtor interrogatories; or to file, issue or argue any other paper, pleading or proceeding not set forth in subsection A.”
In other words, while a non-natural entity is not required to retain counsel for all aspects of the legal proceeding in General District Court,* only an attorney is permitted to conduct the subsequent litigation that will certainly follow the filing or claim.
For example, an LLC owner could file a warrant in debt (civil claim for money) against a party that owes the LLC money, but the next step is often filing a bill of particulars (reasons why the opposing party owes money), which the LLC owner is not permitted to file.
Additionally, there is an ethical consideration prohibiting the Court from allowing a nonlawyer to litigate a case in court on behalf of an LLC, corporation, or partnership, which parallels § 16.1-88.03. Specifically, Unauthorized Practice Rule 1-101 of the Virginia State Bar Professional Guidelines. Rule 1-101, Practice Before Tribunals, states: “A non-lawyer, with or without compensation, shall not represent the interest of another before a tribunal, otherwise than in the presentation of facts, figures or factual conclusions, as distinguished from legal conclusions…”
Rule 1-101 is elaborated by Unauthorized Practice Consideration 1-3, which states: “A corporation (other than a duly registered law corporation) does not have the same right of appearance before a tribunal as an individual and may not be represented before a tribunal by its officers, employees or agents who are not duly authorized or licensed to practice law in Virginia. A corporation can be represented only by a lawyer before a tribunal, with respect to matters involving legal conclusions, examination of witnesses or preparation of briefs or pleadings.”
If an LLC, corporation, or partnership owner tries to represent the entity in an impermissible fashion, the owner may technically be charged, prosecuted, and found guilty of a Class 1 misdemeanor for violating Vir. Code Ann. § 54.1-3904:
“Any person who practices law without being authorized or licensed shall be guilty of a Class 1 misdemeanor…”
Additionally, and more likely, if you attempt to appear in Court without counsel, the judge may rule that the entity is not present and enter an unfavorable ruling against your entity.
If your LLC, corporation, or partnership has a legal matter, please contact Steven Krieger Law, PLLC for a consultation. The earlier you discuss the matter with an attorney the better.
* This discussion is limited to General District Court because the simplified filing process, including form filings, allows parties to attempt to litigate without retaining an attorney. Circuit Court does not accept form petitions or filings and the amount at stake is often very significant, so parties do not want the risk associated with representing themselves.