- QUESTION: Is a corporate entity required to have an attorney representing that corporate entity in a court proceeding?
- QUESTION: I have a breach of contract claim against a corporation in Pennsylvania and I would like to include the president of the corporation as an individual defendant, even though he signed the contract on behalf of the corporation (not individually). Will the court allow me to pierce the corporation to hold the president personally liable?
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QUESTION: Is a corporate entity required to have an attorney representing that corporate entity in a court proceeding?
ANSWER: As a general matter, a corporate entity may not appear in court unless that corporate entity is represented by an attorney. A corporate entity may not represent itself in any court of common pleas in Pennsylvania or in any appellate court in Pennsylvania. Under Pennsylvania law, the purpose behind that rule is that a corporate entity that accepts the advantages of being a corporate entity must also be held to certain responsibilities, including retaining counsel to sue on the corporate entity's behalf or defend the corporate entity in court.
A limited exception to this rule is in proceedings before magisterial district judges. In those proceedings, a corporate entity may be represented by an attorney, but may also be represented by a partner, officer, employee, or authorized agent that has personal knowledge of the subject matter of the litigation and appropriate written authorization to appear as the corporate entity's representative. Such written authorization must be filed with the court.
QUESTION: I have a breach of contract claim against a corporation in Pennsylvania and I would like to include the president of the corporation as an individual defendant, even though he signed the contract on behalf of the corporation (not individually). Will the court allow me to pierce the corporation to hold the president personally liable?
ANSWER: Generally, no. Corporations are recognized as independent legal entities. The corporate form protects individual officers from personal liability unless specific, unusual circumstances call for an exception. What you are referring to is the concept of "piercing the corporate veil." The courts disfavor piercing the corporate veil, and it is difficult to accomplish. The corporate veil may be pierced if the principals disregard the corporate form—for example, by undercapitalization, failure to adhere to corporate formalities, substantial intermingling of corporate and personal affairs or use of the corporate form to perpetuate a fraud (remember Bernie Madoff). If you can show that one of these exceptions applies, you may be able to pierce the corporate veil to hold the president individually liable.
