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October 27, 2014

COA: 30-yr limit in Summer Resort Owners Act trumped by MI General Corporation Act

The Michigan Court of Appeals in Hogg v. Four Lakes Association, Inc., No 316898, held that the 30-year limit on the existence of an entity created under the Summer Resort Owners Act is superseded by the Michigan General Corporation Act and thus may exist perpetually.
Hogg contested the existence of the Four Lakes Association, which provides basic infrastructure services such as road maintenance, snow removal, and water quality testing for a forested lake area near Brighton, Michigan.  Hogg requested the Court hold that the Association is not a valid entity because it was formed in 1968 under the Summer Resort Owners Act, and the Act provides that an entity may not exist more than 30 years. In return, Hogg asked the Court to disperse the Association's corporate funds to its members that paid dues to the entity.
The Court held that the Act's 30-year limit is superseded by the Michigna General Corporation Act, which provides that “every domestic corporation incorporated under any law of Michigan, may be perpetual or limited in term by its articles.”  Because the Association did not limit its life in its articles, and in fact provided that its term was perpetual, it remained a valid entity.

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