Corporations

Corporations: Overview

When insuring a transaction involving a corporation as purchaser, seller, or borrower it must be determined that the corporation legally exists and is in good standing. This information may be acquired through the Department of the Secretary of State in the state of incorporation. For new corporations acquiring title to real property on or about the date of incorporation, it is necessary to verify that incorporation occurred prior to the conveyance for, if incorporation has not occurred, the conveyance would be void due to lack of a proper grantee (legal entity).

 

In addition, the articles of incorporation and bylaws should be reviewed and it should be verified that the bylaws do not prohibit the specified type of transaction (i.e., conveyance or encumbrance). It is also necessary to obtain a certified copy of the corporate resolution authorizing the sale or mortgage. Specific state laws should be reviewed as to which corporate officers may execute deeds and mortgages/deeds of trust (i.e., CEO, President, and Vice President). If someone other than a statutorily approved corporate officer is signing, such person must be approved by the corporation through its resolution. Where the corporate seal is required, a handwritten, typed, or imprinted scroll or seal is acceptable, depending on applicable state law.