If an LLC cannot sue in small claims court but I don’t want the ability to do so, what are my options?
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If an LLC cannot sue in small claims court but I don’t want the ability to do so, what are my options?
I have some properties that I would like to place in LLCs but I do not wish to give up the ability to utilize the small claims court as a means to deal with eviction, or collect for unpaid rents or for damage. Could I for instance include language in the lease that assigns the obligations of the tenant’s (i.e. rent) under the lease to me personally under various conditions (i.e. that the LLC is not able to utilize small claims court)?
Asked on June 6, 2015 under Business Law, Montana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
No, you can't assign the obligations to you if the LLC can't sue because that would be correctly seen by the courts as a transparent attempt to allow you, a non-lawyer, to represent an LLC in court and would be disallowed. Having an LLC (as opposed to a dba) gives you considerable advantages: limited liability, an easier and less-prone-to-being-disallowed way to deduct business expenses, etc. If the trade-off is having to have an attorney and appear in other courts than small claims, it's well worth it.
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