In Florida, if a business entity, such as a Florida LLC, Florida Corporation, or other Florida company is sued in a lawsuit, the owners, managers, or directors are required by law to hire an attorney to represent the business entity.
The reason for this is because when a person represents themselves in court, known as acting “pro se,” they are not practicing law because they are representing themselves. However, since the business is considered a separate entity from the owner(s) of the business, the owner of a company cannot represent that company because it would be considered an unlicensed practice of law, even if he is the only owner, manager, and employee in the entire company.
Companies in Florida are sued for many different reasons, both legitimate and not, but if your company is sued in Florida and you do not hire a Florida attorney to represent you, the Plaintiff in the civil action may receive a default judgment against your company for failing to respond.
A court will grant the default judgment against a business entity because if the owner of a business entity were to respond to a Complaint or Summons on behalf of the company without hiring an attorney to represent the company, they would be guilty of the unlicensed practice of law, which is a third degree felony.
This Final Default Judgment could result in several different scenarios, from a judgment lien being placed against your company, to garnishment of company assets, or even worse. In some scenarios, the Plaintiff may be able to “pierce the corporate veil” and recover your personal assets as payment for the judgment.
If your Florida LLC or Florida corporation has been sued, then you need to contact an attorney IMMEDIATELY, as failure to respond by the deadline could also result in a default judgment being granted against you and/or your company.
If your company has been involved in a business dispute that you feel may result in litigation, then it is also important to contact an attorney. An experienced litigation and business law attorney may be able to take steps, such as pre-litigation negotiations, pre-litigation review of documents, and more, that could eliminate the need for a lengthy and costly court proceeding, or at the very least, be prepared for when the action is initiated by the opposing party.
