Operating a business as a corporation, including an LLC (limited liability corporation) or PLLC, or as a partnership, has many advantages in North Carolina, including limiting the liability of business owners. However, there are some downsides to operating a business as a corporation (as opposed to sole proprietorship). One of them is that in North Carolina a corporation cannot represent itself, through its employees and owners who are not attorneys, in a judicial proceeding, such as a proceeding in District or Superior Court; a corporation must appear through a licensed attorney in a lawsuit 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 on their legal rights. (NC Gen. Stat. § 84-2.1) A statute specifically states that a person who is not an attorney may not “appear as an attorney or counsel before the law in any action or proceeding before any judicial body, including the Carolina Industrial Commission of the Norte or the Public Utilities Commission. “One case held that a corporation cannot even request an extension 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 partnerships and corporations. Some federal procedures are exempt from this rule, such as procedures before the Social Security Administration, the Internal Revenue Service, and the US Citizenship and Immigration Services (USCIS).

The lead case on this issue in North Carolina is found in 155 NC App. 205, 573 SE2d 547 (2002). In this case, the plaintiff sued the defendant, who was a corporation. The corporation had one shareholder, who was also the president, chief executive officer, and chairman of the board. This owner filed a response and a counterclaim, and apparently appeared in court to argue one or more motions. The plaintiff tried to strike out the answer on the grounds that the owner could not file the answer for his corporation. The presiding judge contacted the North Carolina Bar Association (which regulates licensed attorneys in North Carolina and also investigates unauthorized practice of law), who informed the judge that the landlord could represent your company 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 a duly admitted and licensed attorney and cannot proceed pro se unless it does so in accordance with [limited] exceptions “.

One of those exceptions is that the employee of a corporation can represent the corporation in small claims court. 86 NC App. 469 (1987). The reasoning in 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 Board or licensing 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 courts and other judicial or quasi-judicial bodies, or assisting through advice, counsel or otherwise in any legal work. ” The State Bar has said, apparently on the basis of 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 seems 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, an administrative court.” Additionally, North Carolina jurisprudence states that “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 can 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 issue specifically and predict how courts will fail in specific administrative contexts.

A corporation appearing before a Superior or District Court in North Carolina, or appearing before a Board or the Office of Administrative Hearings, must therefore retain an attorney to represent it or, at a minimum, retain an attorney to advise on whether legal counsel is required. When an attorney is required, the absence of an attorney will mean that the corporation cannot enforce its rights and cannot defend itself.