One of the more common areas of confusion that surrounds determining the legal name of debtors for input onto UCC Financing Statements involves the punctuation of business debtor names. Imagine a business that filled out their loan application as ABC Trucking Company, Inc. and has this version of their name printed on their letterhead and their business license, but their Articles of Incorporation list the name as A.B.C. Trucking Company, Inc. Most UCC filers understand that it is important to get the debtor name right on their UCC filings, but many are unsure if ABC Trucking Company, Inc. is the same as A.B.C. Trucking Company, Inc.
Proper punctuation of business debtor names is critical on UCC Financing Statements because a punctuation error could cause the name not to be found later as part of a UCC search effort. Most states have adopted a version of the International Association of Commercial Administrators’ Model Administrative Rules for UCC searching which disregards punctuation, but there are exceptions. A UCC document that cannot be found using the State’s Standard Search Logic owing to a punctuation error could be deemed seriously misleading and result in a loss of priority.
It is advisable to review a business entity’s formation documents and input your debtor name exactly as the name appears in the charter, including punctuation.
Please refer to our blog post, “Refer to Organizing Paperwork for Legal Name of a Business Debtor” to learn more about how to determine the legal name for a business debtor.