Tuesday, November 28, 2006

Corporations and Small Claims Court in California

Question: Our corporation is suing a former client (another corporation) for non-payment of services. Does one of our corporate officers have to show up in small claims as plaintiff or can our business manager represent us - as she knows the full particulars of the actions.

Answer: A corporate officer should attend with the business manager and then ask permission from the judge for the business manager to speak on behalf of the corporation. It is the best way to make sure the case is not continued.

Under most circumstances, Code of Civil Procedure § 116.540 limits who can appear on behalf of a corporation in small claims court. That person appearing must be a "regular employee, or a duly appointed or elected officer or director, who is employed, appointed, or elected for purposes other than solely representing the corporation in small claims court." Your business manager could technically appear on behalf of the corporation. However, most small claims matters are heard volunteer attorneys who are appointed as "temporary" or "pro tem" judges and they are sometimes not familiar with the provisions of this code section.

Sending a corporate officer is not totally necessary, but it can lend credibility to the proceedings. It is common practice for a business to send a credit manager, but all it takes is the inconvenience of one dismissed case to see that the better practice is to also send a corporate officer.

About the Author
Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

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