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Problem

Small businesses are not permitted to represent themselves in court, but are not large enough to afford overpriced lawyers

1,804 Views / Posted by Aaron Greenspan

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Even though the law does not specifically forbid it, local rules in effect in most (if not all) federal court districts mean that small businesses such as my own are caught between not filing legitimate claims, and not being able to afford the cost of expensive lawyers. Yet I'm perfectly capable of representing my company's own interests, if only I were allowed to.

In cases where S corporations are not permitted to represent themselves, the shareholders are being taxed for their company's earnings, but they cannot represent the company's interests. It's a modern day form of taxation without representation, and it does not make any sense.

The policy of treating companies different than persons is further hypocritical given that corporations are treated effectively the same as persons in so many other contexts.
Supporter: Aaron Greenspan
Opponents: None
Section

Laws and Regulations, United States Code
28 U.S.C. § 1654: Title 28, Part V, Chapter 111, Section 1654

§1654. Appearance personally or by counsel

In all courts of the United States the parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct causes therein.

Source

(June 25, 1948, ch. 646, 62 Stat. 944; May 24, 1949, ch. 139, §91, 63 Stat. 103.)

Historical Revision Notes

1948 Act

Based on title 28, U.S.C., 1940 ed., §394 (Mar. 3, 1911, ch. 231, §272, 36 Stat. 1164). Words “as, by the rules of the said courts respectively, are permitted to manage and conduct causes therein,” after “counsel,” were omitted as surplusage. The revised section and section 2071 of this title effect no change in the procedure of the Tax Court before which certain accountants may be admitted as counsel for litigants under Rule 2 of the Tax Court. Changes were made in phraseology.

1949 Act

This section restores in section 1654 of title 28, U.S.C., language of the original law.

Amendments

1949—Act May 24, 1949, inserted “as, by the rules of such courts, respectively, are permitted to manage and conduct causes therein”.

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Solution Override the district local rules with a small change to legislation that will allow businesses to be represented pro se by their shareholders or directors if desired.
The courts generally frown upon pro se representation by companies because, they argue, the quality of legal discourse would decline without professional representation. Yet individuals are allowed to represent themselves, and the courts clearly seem to be able to handle that. The solution to the problem of low-quality legal discourse is by making the legal system more accessible and forgiving, not limiting legal recourse to only the most wealthy corporations in the country.
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