Do corporations appearing in court in North Carolina have to appear through an attorney?
Operating a business as a corporation, including an LLC (limited liability company) or PLLC, or as a partnership, has many advantages in North Carolina, including limiting the liability of business owners. However, there are some disadvantages to operating a business as a corporation (as opposed to a sole proprietorship). One is that in North Carolina a corporation cannot represent itself, through its employees and non-attorney owners, in a judicial proceeding, such as a proceeding in District or Superior Court; a corporation must appear through a licensed attorney in a trial or other court proceeding.
The practice of law in North Carolina is governed by statute. The practice of law includes performing any legal service for another person, firm, or corporation, with or without compensation, preparing court documents, assisting in legal work, and advising another person, firm, or corporation of their legal rights. (NC Gen. Stat. § 84-2.1) One statute specifically provides that a non-lawyer may not “appear as counsel or counsel in any action or proceeding before any judicial body, including the North Carolina Industrial Commission or the Public Service Commission”. .” One case held that a corporation cannot even request a continuance of a court date, because this constitutes the practice of law.
Federal courts have generally applied the same rule, requiring a corporation to appear through a licensed attorney. The rule also applies to nonprofit corporations and partnerships. Some federal proceedings are exempt from this rule, such as proceedings before the Social Security Administration, the Internal Revenue Service, and the US Citizenship and Immigration Services (USCIS).
The main case on this issue in North Carolina is found at 155 NC App. 205, 573 SE2d 547 (2002). In this case, the plaintiff sued the defendant, which was a corporation. The corporation had one shareholder, who was also the president, chief executive officer, and chairman of the board. This owner filed an answer and a counterclaim, and apparently appeared in court to argue one or more motions. The plaintiff sought to vacate the answer on the grounds that the owner could not file the answer for his corporation. The presiding judge contacted the North Carolina State Bar Association (which regulates licensed attorneys in North Carolina and also investigates the unauthorized practice of law), who informed the judge that the owner could represent your corporation in court. The case later went to the North Carolina Court of Appeals, which held that it was a mistake. The court wrote, “in North Carolina, a corporation must be represented by duly admitted and licensed counsel and may not proceed pro se unless it does so in accordance with [limited] exceptions”.
One of those exceptions is that the employee of a corporation may represent the corporation in small claims court. 86 NC application. 469 (1987). The reasoning for this case is suspect, but this exception is still recognized.
It is not entirely clear whether a corporation can represent itself in an administrative proceeding before the Office of Administrative Hearings (OAH), or before a licensing board or agency. North Carolina General Statute 84-2.1 states that the following constitutes the practice of law: “preparing and filing petitions for use in any court, including administrative tribunals and other judicial or quasi-judicial bodies, or assisting by advice, counsel or otherwise in any legal work”. The State Bar has said, apparently relying on this statute, that “appearing in court or before any judicial or quasi-judicial body on behalf of another” constitutes the practice of law.
Therefore, it would seem that a company must appear through a lawyer in administrative proceedings. The term “quasi-judicial” generally means “denoting or relating to powers and functions similar to those of a judge, such as those exercised by an arbitrator or an administrative tribunal.” Additionally, North Carolina case law states: “A ‘contested case’ is a quasi-judicial administrative proceeding to resolve the rights, duties, or privileges of a person involved in a dispute with an administrative agency.” 358 NC 649, 657 (2004).
On the other hand, one case held that a corporation may represent itself in an administrative hearing unless a specific rule or statute says otherwise. 187 NC Application. 227, 653 SE2d. 11 (2007). Therefore, it is difficult to summarize this precise issue and predict how courts will rule in specific administrative contexts.
Therefore, a corporation appearing in North Carolina District or Superior Court, or before a Board or the Office of Administrative Hearings, must retain an attorney to represent it or, at a minimum, retain an attorney. for advice if legal advice is required. When an attorney is required, the absence of an attorney will mean that the corporation is unable to assert its rights and cannot defend itself.