A few years back, a candidate for President caught some flak when he said “companies are people.” Ignoring the context in which he made that statement, he was right. A corporation or limited liability company cannot do anything on its own, but can only act through its officers and agents. See, for instance, Nekoosa-Edwards Paper Co. v. News Pub. Co., 174 Wis. 107, 182 N.W. 919, 923 (1921) (a case that determined that a corporation could not plead the fifth and withhold records, even if doing so implicated the corporate officers). When a corporation or LLC is the party in litigation, its officers, members and employees are the ones who will have to provide the documents and testify. However, that does not extend to bringing or defending the company in court.
Wisconsin Companies In Litigation Must Be Represented by an Attorney in Court
When it’s litigation, with the exception of Small Claims, Wisconsin law requires that corporations or LLCs be represented by an attorney. Wisconsin Statute §757.30 prohibits anyone without a law license from practicing law, the violation of which carries a fine of $50 – $500, or a year in jail, plus the risk of a contempt of court finding. In Jadair Inc. v. United States Fire Ins., 209 Wis. 2d 187, 562 NW 2d 401 (1997), the Wisconsin Supreme Court said “only lawyers can appear on behalf of, or perform legal service for, corporations in legal proceedings before Wisconsin courts.”
While some may suggest that this law is about protecting the lawyers “turf,” it’s more about protecting the public from inadequate or unethical representation by those untrained in legal procedure and who are not insured against malpractice. This leaves the unwary, unrepresented party in the hands of someone untrained to navigate the litigation process, with no recourse if and when the case is botched. The Court in Jadair ruled that a non-lawyer signing a Notice of Appeal violated sec. 757.30, and voided the appeal.
(The rule does not apply to individuals, who may represent themselves in court, but appearing on behalf of someone else or an entity in an action or proceeding is considered the practice of law.)
Except for Small Claims Court
There is an exception for Small Claims court, which has a limit of $5,000 – $10,000 (depending on the type of case), and is the forum for evictions and replevins (which means the return of property). The usual rules of evidence do not apply in Small Claims, and the damage from not pursuing or defending a case properly is limited. But if the case is in Civil Court, a licensed attorney must sign the pleadings, conduct the discovery and represent the company at the trial and through any appeals.
Retain an Attorney
Don’t make this mistake. If you are a shareholder in a corporation, or member of an LLC, and you either want to bring a lawsuit, or your company is sued, retain a business law attorney immediately. This is especially critical if the company is the one being sued, because an answer has to be filed within a certain number of days after it is served, or default judgment will likely be entered against it. It can take a little time to find the right attorney and have her or him get up to speed on the case, so don’t delay. Call the attorneys at Bartelt Grob, S.C. to discuss your case.