Introduction
Most Michigan condominium associations are nonprofit corporations formed under the Michigan Nonprofit Corporation Act, MCL 450.2101 et seq. (the “Nonprofit Corporation Act”), and often fail to realize they’ve fallen out of good standing with the State of Michigan. The Nonprofit Corporation Act requires all nonprofit corporations to file an annual report by October 1st each year. Under the Nonprofit Corporation Act, specifically MCL 450.2922, if a condominium association fails to file an annual report for 2 years after the due date, the corporation may be automatically dissolved by LARA. Loss of good standing may prevent the condominium association from initiating or sustaining litigation, enforcing contracts, filing liens, or taking other collection actions, and may also create issues with lenders, insurers, auditors, and title companies. It also increases risks during refinancing or major capital projects. This article explains how to verify your condominium association’s corporate status with the Michigan Department of Licensing and Regulatory Affairs (“LARA”) and how to restore it if necessary.
How to Use the MiBusiness Registry Portal to Determine the Corporate Status of Your Condominium Association
Under the Nonprofit Corporation Act, a condominium association may incorporate, and most Michigan condominium associations elect nonprofit corporate status, although incorporation is not mandatory. Once incorporated, however, under MCL 450.2121(1)(a), the association must comply with the Nonprofit Corporation Act’s reporting and filing requirements, except as otherwise provided in the Act or by other law. Under MCL 450.2911, nonprofit corporations must file annual reports with the State of Michigan, as outlined in that section. Failure to comply will likely result in financial penalties and loss of good standing. If the delinquency persists, automatic dissolution may occur.
Step 1: Review Filing History
A condominium association board of directors should begin a check of its corporate status by reviewing the association’s filing history via the MiBusiness Registry Portal’s Business Search, available at https://mibusinessregistry.lara.state.mi.us/search/business, to determine:
- Whether the condominium association is active or dissolved
- Which annual reports, if any, are delinquent
- Estimated fees and penalties owed
A MiLogin for Business account is required to file documents (though not to conduct searches). Each user must maintain their own account, and shared credentials are prohibited.
Step 2: Submit Annual Reports
- Log in to the MiBusiness Registry Portal using a MiLogin for Business account
- Search for the condominium association
- Request access to its records. For existing entities on the Portal, search for the entity, then click its name to open the detail view. In the detail view, click the “Request Access” icon, enter the entity’s ID number and initial filing date (both available in the detail view), and refresh the page once access is granted. The “File Annual Report” button will then appear in the detail view.
- File delinquent annual reports one year at a time, starting with the oldest due report, following the prompts in the Portal. Reports must be filed in chronological order, and only one report may be submitted at a time. Each filing must be reviewed and accepted by LARA before the next report can be submitted. Upon acceptance, LARA will send an email to the condominium association’s resident agent at the email address on file.
What are the Consequences of Loss of Good Standing or Automatic Dissolution for a Condominium Association?
Under MCL 450.2801(1)(f), a nonprofit corporation may be dissolved automatically under MCL 450.2922 for failure to file an annual report or pay the annual filing fee. Under MCL 450.2922(1), if a domestic nonprofit corporation neglects or refuses to file its annual reports or pay required filing fees and penalties for two consecutive years, it is automatically dissolved 60 days after the two-year period expires. Michigan case law treats a dissolved corporation as if it were deceased, which impairs its capacity to act: “At common law, upon dissolution of a corporation, ‘…a dissolved corporation is a dead person, so much so that, in the absence of statute and revival, even pending actions by or against it would abate.’” Gilliam v Hi–Temp Prod, Inc, 260 Mich App 98, 112, 677 NW2d 856 (2003), quoting US Truck Co v Pennsylvania Surety Corp, 259 Mich 422, 426; 243 NW 311 (1932). Many condominium associations are unaware that this dissolution can occur by operation of law.
A condominium association that falls out of good standing could encounter serious legal and practical issues. These include being unable to start or sustain legal actions, enforce contracts, or pursue liens or collections, and facing complications with lenders, insurers, auditors, and title companies. It also increases risks during refinancing or large capital projects. Although the condominium still exists under the Michigan Condominium Act, MCL 559.101 et seq., the corporation’s noncompliance can significantly hinder the association’s ability to operate as a legal entity.
How to Reinstate a Condominium Association That Has Been Automatically Dissolved
Michigan law, however, provides a clear statutory mechanism for reinstatement. Under MCL 450.2925(1), a domestic nonprofit corporation that has been automatically dissolved may renew its corporate existence by:
- Filing delinquent annual reports for the last five years, or any lesser number required via the MiBusiness Registry Portal
- Paying the required filing fees for each delinquent year
- Paying a $5.00 penalty per delinquent report
According to LARA, the current filing fee for each prior-year nonprofit annual report is $25.00. If renewal is submitted on or after October 1, the current year’s annual report must also be filed, along with an additional $25.00 fee.
Legal Protections Provided to Condominium Associations That Become Active After Automatic Dissolution
Upon filing all required reports and paying the applicable fees and penalties, the corporation’s existence is renewed by operation of law. Importantly, MCL 450.2925(2) provides that:
“The rights of a corporation that complies with this section are the same as if a dissolution or revocation had not occurred, and all contracts entered into and other rights acquired during the interval are valid and enforceable.”
The Michigan Court of Appeals has applied MCL 450.2925(2) to uphold the authority of a homeowners association retroactively during the period of dissolution. For example, in Hawthorne Ridge Homeowners Ass’n v Yan Wang, unpublished per curiam opinion of the Michigan Court of Appeals, issued Dec 26, 2017 (Docket No. 336077), p 3, the Court held that a homeowners association’s reinstatement under MCL 450.2925 restored its legal authority as though dissolution had never occurred, validating enforcement actions taken during the dissolution period:
Wang and Chen next argue that the trial court erred by granting summary disposition because the Association lacked legal authority to force them to change the exterior paint color. In support, they assert that at the time they repainted their house the Association did not exist because it had been administratively dissolved by the State of Michigan. The Association does not dispute that it was administratively dissolved in 2011. However, it presented evidence suggesting that it was reinstated in September 2015 under MCL 450.2925(1), which provides that a corporation that was dissolved may “renew its corporate existence or its certificate of authority by filing the annual reports under section 911 for the last 5 years …” and by “paying the annual filing fees for all the years for which they were not paid, together with a penalty of $5.00 for each delinquent report.” MCL 450.2925(2) further provides that “[t]he rights of a corporation that complies with this section are the same as if a dissolution or revocation has not taken place, and all contracts entered into and other rights acquired during the interval are valid and enforceable.” Consequently, the Association’s legal authority covered the period when Wang and Chen repainted their house without first obtaining prior approval to change the exterior color.
The Court’s reasoning in Hawthorne Ridge reflects a consistent interpretation of MCL 450.2925(2) as a curative statute, intended to protect the continuity of corporate governance and enforcement authority notwithstanding an administrative lapse. By operation of the statute, reinstatement is not merely prospective; rather, it restores the corporation’s rights and powers retroactively, as though the dissolution had never occurred. This statutory fiction eliminates any temporal gap in authority and prevents parties from avoiding otherwise valid obligations on the basis of a technical defect in corporate status.
Applied in the condominium association context, this principle is particularly significant. Condominium associations routinely engage in ongoing governance functions, such as bylaws enforcement, architectural review, and maintenance obligations that cannot practically be suspended without undermining the community’s regulatory framework. MCL 450.2925(2) ensures that these functions remain legally effective upon reinstatement, even if challenged actions were taken during the period of dissolution.
Key Takeaways for Filing Annual Reports
To reduce risk and maintain compliance with LARA, a condominium association’s board of directors should:
- Verify corporate standing annually
- Calendar October 1st annual report deadlines under MCL 450.2911
- Retain copies of all filed reports
- Clearly assign responsibility for corporate filings among the board, management, and legal counsel
Routine review of corporate standing should be treated as a core governance obligation and an essential component of fiduciary oversight.
Hirzel Law, PLC regularly assists Michigan condominium associations with maintaining and restoring corporate good standing.
Our firm can assist by:
- Reviewing a condominium association’s LARA filing history and corporate status
- Identifying delinquent reports and estimating fees and penalties
- Coordinating statutory renewal and reinstatement filings
- Confirming restored good standing before litigation, refinancing, or contract execution
- Establishing compliance procedures to prevent future lapses
We frequently address these issues in connection with collections enforcement, litigation readiness, governance audits, lender inquiries, and transition matters, where corporate standing is often a threshold issue. Maintaining good standing with LARA is a foundational component of a Michigan condominium association’s legal health. Although Michigan law provides a clear statutory path to reinstatement following dissolution, proactive compliance remains the most effective strategy. Condominium associations that are uncertain about their corporate status or that anticipate litigation, financing, or significant contractual activity should address these issues early and seek legal guidance to avoid unnecessary complications.
