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Limit Increased For Non-Attorney Representation of Closely Held Business Entities in Colorado Litigation

Jun 24, 2013

By Reed Morris

Colorado business owners should be aware that corporate entities including LLCs generally require attorney representation when the company is bringing or defending actions in court or before an administrative body. Recognizing the costs to small businesses in litigation, the Colorado General Assembly provided a narrow exception to this rule in 1991 allowing non-attorney officers of closely held businesses to represent their company in court without an attorney if the matter did not exceed $10,000 in controversy.

This spring, Governor John Hickenlooper signed House Bill 13-1052 into law [.pdf] increasing the limit for officer representation to $15,000 beginning on the bill’s effective date. The threshold of $15,000 is equal to the jurisdictional limit for matters that may be heard in Colorado county courts, allowing companies wishing to pursue such matters without legal counsel the ability to fully utilize the county court system. The county courts generally provide a more efficient and less onerous process compared to the district court. This is mainly accomplished though limiting pretrial litigation and discovery. If a matter is under $7,500, Colorado small claims courts provide businesses with an even more streamlined forum to seek judicial relief.

Closely held business entities are defined in Colo. Rev. Stat. §13-1-127(1)(a) as entities “with no more than three owners.” A non-attorney corporate officer may proceed in court or administrative hearing after providing satisfactory evidence of authority to appear on behalf of the closely held entity. 

Business owners considering representing their company in court should still consult an attorney relating to the law, procedures, and presentation of their case in court. Even though Colorado law allows non-attorney officers to represent their closely held company, this exception to the rule does not mean that standards of law and practice will be relaxed. Proceeding to court with or without an attorney is not a decision to be taken lightly. Limited and carefully defined attorney representation for your company may make business sense depending on the complexity and stakes of the case.

 

Mallon & Lonnquist, LLC, is a business and real estate law firm. Reed F. Morris is a Colorado business and real estate litigation attorney with Mallon & Lonnquist, based in Denver, Colorado. Reed regularly represents businesses and individuals in disputes from pre-filing through trial and can be reached at rmorris@mallon-lonnquist.com.  



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