How does a title examiner craft her Commitment when a corporation holds title?
For example: let’s say our property is vested in Newtitle, Inc., a Michigan corporation.
There are two things the examiner should verify from the start:
- Does the corporation exist?, and
- Is the corporation in good standing?
A corporation is born via its Articles of Incorporation. The Articles of Incorporation reveal the proper name of the entity, as well as the date the entity was created.
The records should reveal that such corporation is in good standing. A good standing indicates that the State of Michigan has no issues with that particular entity. If the records indicate that a corporation is not in good standing, the examiner should require the corporation fix the issue and regain good standing, prior to closing.
In Michigan, the examiner should visit the LARA website to gather information on the corporate seller. The LARA site will typically reveal all the necessary information, eliminating the need to ask for the articles of incorporation or certificate of good standing in the title Commitment itself. On the other hand, if the search yields no result, the examiner must require submission of the articles and certificate of good standing.
The LARA site contains all the information relevant to Newtitle, Inc. What’s next?
The examiner must require submission of the Corporate Resolution. The resolution is a simple document issued by the board of directors indicating that the board has met, has agreed to the sale of the land, and has appointed a party to sign and bind the corporation.
In summary, the title examiner must review, or attain, the articles of incorporation, verify corporate standing, and call for and review the corporate resolution. The resolution should reveal that the party signing the purchase agreement, on behalf of the corporation, is a proper party.